Companies make progress and optimize performance by taking timely decisions relating to many facets of growth. The process of decision making may involve phases such as internal consultations, data gathering among others.
Sometimes, the fear of making mistakes or wrong decisions hold back decision making and the leaders will chug along with the status quo path.
At the back end of all successful businesses and companies, there will be a bunch of smart decision-makers. Some of them will be using collaborative decision-making by taking all layers on board within a time frame. They know this method helps the organization to move forward than getting stuck in the status quo.
Decisive leaders weigh the costs of right and bad decisions plus no decisions. A crucial attribute of a successful leader is the ability to make time-sensitive and well-informed decisions.
They also seek out the appropriate information to make a good decision and seek an understanding of the knowledge held by colleagues, and leaders.
Need for decisive leadership
The hallmark of a successful enterprise is decisiveness in decision making. A decisive leader is also good for employees and the company in so many ways.
Such leaders will be accountable for their decisions. They will be confident and deliver messages with clarity and confidence and others will not have to second-guess their decisions. Once a decision is taken, they will not renege. However, decisiveness should not be misconstrued as a dictatorship.
A true leader is distinguished by the capacity to make up mind fast on problems and issues. On the other hand, those running after others’ opinions without developing their conclusions will present themselves as losers and indecisive captains.
Collaborative decision-making adds to cohesion in teams and seeks value, respect, and involvement of people. But the flipside will be the protracted process will undo many sound decisions.
Often “risk aversion” known by the lack of guts to move ahead with decisions lands leaders in “analysis paralysis” manifested in infinite data gathering, statistics peddling and indulging in surveys to defer hard decisions.
On many occasions, top-level management bury heads in the sand making companies struggle with blocked ideas and reforms.
A case study on delayed decision making
A case study on a lag in decision making will illustrate the case. A chemical company wanted to fire its CFO and bring a new face.
The CFO although technically good had a hammer-like approach with people and alienated people who worked with him. Finally, the Board of Directors asked the CEO to fire the CFO. After firing him, the CEO was least confident to hire a replacement CFO and the post remained vacant for long.
As a result, the company suffered from a lack of leadership and lost internal controls making the budgeting process a mess. The lack of decisions by the CEO led the Board of Directors to lose confidence in him and the entire organization faced many unpleasant results.
Meanwhile, a study has underscored the advantage of having women in top positions, including company boards. Data suggests boards with more female representation have a 53 percent higher return on equity, a 66 percent higher return on invested capital, and a 42 percent jump in sales. It may be the spirit of timely decision making with an empathetic approach.