The six elements of decision making for business leaders

BNET carried an interview with Carl Spetzler, CEO of the Strategic Decisions Group and Director of the Strategic Decision and Risk Management program at Stanford University. Spetzler is credited with developing a decision-making framework used by managers from leading MNCs for all types of decisions: strategic, typical and on-the-fly.

He lists six attributes of a good decision, which I reproduce below:

  • The right frame — making sure you’re solving the right problem in the first place.
  • Clarity about what you want. For example, are you trying to maximize shareholder value or just trying to stay alive and minimize damage?
  • Creative alternatives.
  • Gathering the right information, including information about uncertainty, which is essential if you want to choose the best alternative.
  • Reasoning, which includes what you know and what you don’t.
  • A commitment to make it happen, since a decision is no stronger than its weakest link.

The six elements are obviously closely related; however, I believe clarity about the desired outcome is probably the most important. I cannot overemphasize the importance of clear thinking as that will enable one to address the right issues, gather the right information, create the right solutions and take the most appropriate actions.

There are a few other points I take away from the interview.

  • Leaders fall on all six elements, ie. not fulfilling any one of the above could result in a poor decision.
  • It is important to become aware of one’s natural biases and habits to avoid those influencing decision making.
  • People often drag problems into their comfort zones instead of solving them.

This is where an experienced executive leadership coach plays such an important role. A good coach is incisive, acts like a powerful probe detecting problems not known or visible at the surface, serves as a guiding light providing clear visibility and catalyzes change and actions.

P.S: One point on which I which disagree slightly with Spetzler: he says that “Most people leave a lot of value on the table when they make intuitive decisions.” I don’t think that has to be the case always; with time and practice, good leaders sharpen their intuitive skills which they can tap into making great decisions. As mentioned in this article , intuition can be practised; mastering this ability can do wonders to business leaders.

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