3 Questions to Ask Before Making Important Decisions as a CEO
A CEO operates in a world of continuous change with constant demand for decision making. Since most decisions involve a forecast of the future uncertainty is a given. Being able to make decisions quickly (decisiveness) is a critical CEO skill. As a CEO successfully grows the business their decisiveness improves and they gain confidence in their decision making skills. Therein lies a danger and the cause of unexpected business failures. Overconfidence can lead to rapid fire decision making. Not making a decision can keep options open in an uncertain world. In other situations decisions can be made and easily reversed if necessary. Then there are the situations when an employee’s “need” for a decision from the CEO is in fact a lack of decisiveness or accountability on the employee’s part.
As you run your business and are faced with important decisions ask yourself these 3 questions:
- What are the consequences of delaying the decision?
- What are the consequences of making a bad decision?
- Am I the best person to make this particular decision?
Delaying a decision
If there are no significant negative consequences to delaying a decision, consider putting it out of your mind until it is necessary. This can allow other options to emerge, more information to be developed, and changes in circumstances to be factored in. Make sure you consider the impact on your team if you are considering delaying a decision. You don’t want a delay to cause them to go into “idle”.
Reversing a decision
Some decisions can be reversed without wasting too much resource if the mistake is recognized quickly. “Fail fast and fail soft” is the motto of beta testing (agile development). In this case think of failure not as a mistake but rather as a feedback loop in the decision making process.
Delegating decision making
Fortune 100 CEOs will tell you that with all the management talent in their organizations, the only decisions that reach their desks are ones involving problems nobody else could solve. However it is more accurate to say that the decisions that reach their desk are the ones nobody else wants to be accountable for.
Regardless of the size of your business, even your most talented employees will sometimes avoid making a difficult decision because of lack of decisiveness. This can be driven by fear of being held accountable, fear of being wrong, or any number of other factors. In some cases it is the psychological makeup of the employee that leads to indecisiveness but in many cases it can be a corporate culture that penalizes failure to the extent that employees become overly risk averse. This is one of the most important responsibilities of a CEO – developing people as individuals and developing the culture of the entire organization. Pushing decision making to the proper level and communicating why are powerful tools in carrying out these responsibilities.