Big Decisions

I've got big decisions to make.
But while I'm still thinking everything over...
I thought I'd take some advice from the experts.

How To Make A High-Stakes Decision
by Amy Gallo at Harvard Business Review.

Even the most decisive manager can be thrown into despair when faced with a high-stakes matter. We make decisions every day without noticing, but a career-making (or breaking) challenge requires thought and deliberation. It's unlikely that a single approach will serve you every time. However, there are key factors you should consider to ensure you reach a sound conclusion.

What the Experts Say
People respond to the pressure of big decisions in different ways. As Michael Roberto, the Trustee Professor of Management at Bryant University, said in his 2001 HBR article "What You Don't Know About Making Decisions", "all too often [decision-makers] rush to a conclusion or else dither endlessly and decide too late." Finding a middle ground is difficult, agrees Sydney Finkelstein, the Steven Roth Professor of Management at the Tuck School of Business at Dartmouth and co-author of "Why Good Leaders Make Bad Decisions." "When there's more at stake, you have to take more time [but] how much time really depends on the magnitude of the decision," he says. Whether you are inclined to take shortcuts or stall out sorting through options, what's most important is to be aware of the hazards that might befall you, and how to avoid them.

Involve others, but own the outcome

Big decisions shouldn't happen in a vacuum. "You have to have a team. You can't rely only on yourself," says Finkelstein. By consulting others, you expose yourself to differing opinions, which will help you to make a more informed choice, and you give yourself a better shot at winning buy-in from those who will be affected. At the same time, beware of the risks. "If you have a lot of people involved, almost always a small subset take control and make the decision," which can make the larger group's contribution negligible, Finkelstein says. Also, while important issues, such as changing the strategic direction of a group or hiring a new manager, typically require input from many sources, at the end of the day, one person needs to be accountable. Ultimately, "the leader has to decide," he explains. "I'm not a fan of consensus."

Trust — but challenge — your gut reaction
In some cases, your first instinct may be right, but it's probably not based on rational thought. It's important to question your initial reaction and test it once you've gathered more data. Also make sure to explain your reasoning to others "That's one of the risks when we make intuitive decisions, people don't understand our thought process. It's not like when we go through a big formal analysis where they can follow the steps. With intuition, it's this lightning bolt. They don't understand: How did you come to that conclusion?" says Roberto in Harvard ManageMentor's module on decision making.

Remain open
Another pitfall that Finkelstein identifies is pre-judgment: when you form an opinion early on in the process, based on preliminary information, and stick with it despite what you learn later. "The hallmark of pre-judgment is when you see someone who is referring to data or examples that support their point of view and disregarding data or examples that are inconsistent with it," he says. Take notice when you keep finding information that maintains your perspective, ask yourself whether there is a dissenting point of view that you need to seek out and consider. Be your own devil's advocate and diligently challenge your initial assumptions, or find a trusted colleague to do this for you.

Be wary of past experiences
Many people make big decisions by relating the current challenge to what they've done in the past. It can serve you well to make those connections, but there are drawbacks as well. Finkelstein says people tend to rely on their past experiences even when they're not relevant. Roberto concurs. "The problem is that when we reason by analogy, we focus on all the similarities, and we often ignore the differences between related situations. And the differences often are where the problems are, where the challenges are." Bring in previous incidents as a source of data, but question how pertinent and useful they truly are.

Recognize your bias
"The reality is we all walk into situations where we have bias," says Finkelstein. This bias may be toward things we have attachment to — people, places, divisions — or toward our own self-interest. "It's not news that self interest has a role in how we think but what I found in my research is that a lot of self-interest is subconscious. We don't even know we're doing it," says Finkelstein. You may lean toward an answer because it will be easier to implement or because it is the one that will earn you the most good will with your people. These are not good enough reasons. Focus on reaching the best solution by acknowledging your bias and then putting it aside.

Don't close the book
Even after accounting for the above challenges, your decision will not be perfect. It's rare to figure out an issue completely before moving ahead with a solution. But, that doesn't mean you are stuck. It's a good idea to monitor the situation closely and make adjustments as necessary. "After a few days, a week or a month, you reopen the decision and see where you're at," Finkelstein says.

Principles to Remember

Do:

• Own the decision but bring in others to better understand the various issues involved
• Recognize when you may be partial and ask a trusted peer to check your bias
• Regularly revisit decisions you've made to be sure they are still valid

Don't:

• Rely exclusively on your instinct — think through any initial reactions you have
• Ignore new information that comes in, especially if it challenges your current viewpoint
• Assume the issue is exactly like one you've handled in the past — look for similarities and differences