4 minutes
Decision Making
The importance of having decision makers in your senior leadership teams
The ability to make informed, timely decisions is a crucial skill for leaders in any sector. Decisions (or lack of) drive success or impede progress in organisations. If you’re a manager or leader, chances are that the transformational decisions lie with you. I’ve seen firsthand that effective SLT decision-making is pivotal in shaping successful business outcomes.
Why is it so important? Effective leadership hinges on decisions which align immediate goals and longer term visions. Throw in consideration of organisational values and it gets even more complex. It’s what leaders are paid to do. According to a study by McKinsey, top executives spend about 40% of their time making decisions. However, of those, only 28% are considered highly effective.
The importance of effective decision-making at leadership level:
- Strategic alignment. Leaders who excel in decision-making ensure that choices they make align with their organisation’s long-term goals. Such alignment maintains a strategic direction, which is crucial for sustainable growth.
- Enhanced problem solving. Good decisions help solve complex problems by breaking them down into manageable parts. This methodical approach not only addresses the issue at hand but also prevents potential problems from escalating.
- Resource optimisation. Executives who make wise decisions are better at allocating resources efficiently. This reduces waste and maximises the return on investment. company’s profitability. It helps businesses to grow.
- Risk management. By logically analysing potential outcomes and risks associated with each decision, executives can mitigate adverse effects and profit from opportunities.
So where else does decision-making help organisations prosper or push them to collapse? Put simply, it’s how employees at all levels make choices. Of course, this can be influenced to an extent through training and policy. And it can also be influenced through effective recruitment.
At the core of any business is its people. Therefore, it pays to have the right ones making decisions in your operation. Recruitment and retention decisions are considered some of the toughest decisions that leaders must make. According to LinkedIn’s Global Recruiting Trends report, 90% believe that a candidates’ fit with company culture is as important as their skills and experience. When the fit isn’t right it can lead to a raft of problems.
Additionally, effective decision-making leads to higher employee satisfaction and engagement levels. Forbes reports that highly engaged workplaces see 41% lower absenteeism and 59% less staff turnover, demonstrating the direct link between a leaders ability to make decisions and the fulfilment of their teams.
Dawna Jones draws on the work of Kenneth Brousseau in her book ‘Decision Making for Dummies’, citing 4 types of executive decision making that leaders should be aware of:
- Decisive decision-making requires little information from the leader. It’s usually when instant action is needed. This common type of decision-making doesn’t require the advice of others, with leaders tending to instead trust their instincts and experience.
- Hierarchic decision-making utilises all data available to come to a choice. This is often useful when speed isn’t necessarily essential. However, the single focus means that one person ultimately makes the decision without much input from others. And once made, it's final.
- Flexible decision-making is a more social, interactive, and responsive approach. It adopts numerous solutions to a problem. Once an executive makes this type of decision, they can always pivot to another option as new information becomes available.
- Integrative decision leaders use lots of data and multiple options to decide on a course of action. Choices made in this style are complex. This enables the decision-maker to adopt other solutions when necessary, as well as sourcing all available raw data and resources.
Most leaders will adopt different decision making methods depending on the situation and (of course) the impact that the decision will have. Therefore, it’s useful for your senior leadership team to understand the different types of decision-making and how their own roles, personalities and leadership styles will determine how effectively they can make decisions.
To respond to this, when recruiting at senior level, many organisations have introduced psychometric testing as part of the recruitment process. There are a vast amount of different profiling tools available for businesses to use, such as Thomas International used by our HR partners Breedon Consulting. Ultimately, though, answers will determine an individual’s ability to make decisions as well as traits such as communication styles and emotional intelligence.
Once the right leader is successfully appointed, investing in leadership development is crucial. Their ability to create a transparent and inclusive culture will go on to benefit the business further by welcoming diverse perspectives, leading to more comprehensive decision-making. CIPD’s research reveals that inclusive teams make better business decisions up to 87% of the time.
Effective decision-making is essential in successful leadership. Having the right leaders in your business, making the right decisions on behalf of the business is not only just critical to recruitment and retention – but to the success of the company as a whole. By combining data-driven insights with a deep understanding of people and culture, leaders can make decisions that not only meet immediate needs but also drive long-term success.
ER Recruitment works with its clients to enhance their leadership teams, leading to better decision-making when recruiting and retaining top talent. Find out how by speaking to our team.
