Decision making is key to organisational success- how do leaders and managers make the right decisions?

management courses

We have all come across business articles regarding the top challenges facing leaders today. Some argue that keeping up with technology is the greatest challenge, others argue that globalisation creates the greatest challenge, but there can be nothing more demanding for the modern manager than the myriad of decisions they have to make daily, regardless of how many management courses you attend this is still a regular issue.

Various internet sources estimate that an adult makes about 35,000 decisions every day and child makes about 3,000.   This number may sound crazy, but in fact, we make 226.7 decisions each day on just food alone according to researchers at Cornell University (Wansink and Sobal, 2007).  As your level of responsibility increases, so does the number of choices you are faced with.

According to management consultant, Peter Drucker: “Whatever a manager does, he does through decision-making.” This clearly suggests that decision-making is necessary in planning, organising, directing, controlling and staffing, essentially making it the primary function of management.

Leaders make hundreds of decisions daily, ranging from the mundane to the complex, influencing the success of the business at every stage.

John Pearce, Chairman of Burberry, states: “The worst business decision you can make is no decision. The needs are not going to go away. Waiting is what’s gotten us in to the situation were in now.”

This clearly suggests that one of the greatest skills a leader can have is the ability to make effective business decisions. However, research demonstrates that despite the vast sums spent implementing decisions, organisations only realise the benefits half of the time.

The challenge then is how to make effective business decisions. Vroom and Yetton advocate that making effective decisions starts with the approach to be used itself. Some decisions are best taken by the manager alone, whereas others benefit from the input of a group.

The Vroom-Yetton model often found in management courses is designed to help you to identify the best decision-making approach and leadership style to take, based on your current situation. The framework poses seven ‘yes/no’ questions, which you need to answer to find the best decision-making process for your situation. Researchers have found that managers are more effective, and their teams more productive and satisfied, when they follow the model. The simplicity of Vroom-Yetton also means that anyone, from the boardroom to the factory floor, can use it.

Whether making the decision alone or with a group, there are many things that influence decision making, such as emotion and perceived personal and professional risks. When making the actual decision, it is important to mitigate the irrational and embrace the rational, so following a framework will assist decision makers to identify an objective outcome.

There are a number of tools and techniques that leaders can employ found in management courses, such as the 6 Cs, which requires decision makers to:

  • Construct a clear picture of precisely what must be decided.
  • Compile a list of requirements that must be met.
  • Collect information on alternatives that meet the requirements.
  • Compare alternatives that meet the requirements.
  • Consider the “what might go wrong” factor with each alternative.
  • Commit to a decision and follow through with it.