Making decisions

Here's the next part of our series on leadership skills...

There's an ongoing trend in organisations at the moment for decisions do be made further down the organisation where appropriate. As a leader, you’re going to need to take decisions, either alone or with others, so you’ll need to techniques in this section to ensure your decision is a strong one.

The Impact-Ability matrix
This is a particularly helpful tool to take the subjectiveness out of making decisions. It helps you to take an unbiased view by considering two elements:

  1. The impact your chosen path will have on the team, organisation or problem.
  2. How easy it will be to action the decision once made.

The matrix is a simple 4-box grid:

You plot your options on the grid according to the two axes, then you select the option(s) nearest to the top-right corner as your “good ideas” to take forward.

Identifying risks
So you’ve made your decision… except you haven’t tested it at all to check for problems.
A major consideration for many managers and leaders at the moment is management of risk. People, particularly senior leaders, what to know what could go wrong (and any actions to mitigate the risk) before taking any actions or making any investment in pursuing an idea.


There are 2 steps to working with risks:

  1. Identifying the risks
  2. Responding to the risks

Once you’ve thought through anything that could go wrong as a result of the decision you’ve made, you need to think about options to address those. Plot your risks on the grid by:

  • Probability:    Likelihood of the risk taking place
  • Impact:    How problematic if would be if it did take place

Then, use the appropriate response from the grid:

  • Transfer:    Transfer the risk to someone else, through using contractors or insuring.
  • Avoid:        Change your decision to avoid the risk being able to happen.
  • Mitigate:    Make changes to reduce the probability and impact.
  • Accept:    This is a low-importance risk – just keep an eye on it.

In real life, not every risk will be suitable for every response, so if the response shown by the grid isn’t appropriate for your particular risk, use one of the other approaches.

Looking for unexpected negatives
Finally, before finalising your decision, you should look for any unintended negative impacts from the decision you’re making. This is different from risks, as they’re known quantities which will definitely happen, rather than unpredictable events.

To do this, you should consider negatives in 4 areas:

  1. Employees
  2. Customers
  3. Suppliers
  4. Strategy

So there you go, you're now fully equipped to make decisions as a leader!

Location: Oxford, Royaume-Uni

Comments

Post a Comment

Popular posts from this blog

The NPSI styles: Realist

Image
Welcome back as we continue our journey through the different personality styles of the Navanter Personality Styles Instrument. If you missed the previous parts of this section, you can start here . Motivation: Achievement and control The Realist is an achiever – this person likes to have a goal, and will proactively work to achieve that goal through motivated working, and through moving problems aside as they are encountered. Achieving the goal is more important than how it is achieved, however, and there’s a danger that there may be casualties along the way. Words chosen: Verbs and directing words The Realist chooses words which encourage action – lots of verbs and instructions for people. The Realist prefers it when people don’t push back on instructions, as this can delay the objective being achieved. The Realist likes to get to the point quickly, and has little time for small talk. Words like “I need” rather than “I like” can be over-used. Tone of voice: Confide
Read more

Critical thinking - scanning the environment

Image
The first place to look for opportunities and problems is within the organisation. For this, you can use a STACK analysis to get a good understanding of the current situation in the business. Strategy Tolerance for risk & change Available resources Configuration Knowledge & skills A STACK analysis helps us to do a few things: Get a good understanding of the current state of the organisation and its readiness to implement change Understand how well-aligned the organisation is from the top, where strategy is developed, down to individual contributors Consider whether there are sufficient resources to take actions you need Identify whether the way the organisation is set up would be helpful to grasping opportunities or addressing problems Understand whether additional expertise might need to be brought in from outside. Once you’ve understood the internal situation in the organisation, it’s time to look at whats going on externally which could affect your strategy. For this
Read more

Understanding where problems (and opportunities) have come from

Image
If you can understand the conditions which caused a problem to develop or an opportunity to come along, then you’ll be able to think about how you can replicate those conditions (for opportunities), or change them (for problems). For example, if you realise that an opportunity presented itself which you were only able to take advantage of because of your proactive recruitment strategy, you’ll want to continue that strategy in the future. 5 Whys The 5 Whys technique encourages you to look not at superficial causes, but to look deeper for root causes. For example, imagine you’re waiting for a train and an announcement comes over the loudspeaker saying: “Your train is delayed due to the late arrival of a preceding service.” You likely find this frustrating because it’s not a real reason for the delay – you want to know why the preceding service was running late. The idea with 5 Whys is that you keep asking “why?” until it feels like a daft question. This is likely to be around 5 times. Th
Read more