As humans, we make decisions all day long, but in a leadership role, those decisions have strategic implications, ranging from who to hire to which projects to prioritize or where to make budget cuts. These roles are filled with responsibility and can become a source of stress. However, they also present an opportunity for growth. As a leader, you have the chance to shape your organization’s direction and inspire your team. There are many resources and tools to enhance your decision-making skills. When you become a confident decision-maker, you will not only see improvement in your organization, but you will also instill trust in your employees and guide your team members more effectively. Influential leaders’ decision-making relies on carefully balancing their instincts while analyzing the facts with the firm confidence needed to tackle tough decisions head-on.
How to Enhance Your Leadership Decision-Making Skills
Harvard Business School proposes a set of guidelines for honing your leadership decision-making skills. The first tip is to “Involve your Team.” Although the decision is yours, by including employees or team members in decisions, you gain new perspectives. If the decision is more personal, like dealing with another employee, consider turning to your organizational leaders for advice. Not only does this offer you fresh insights, but it can also lead to more “buy-in” from internal stakeholders. Including employees in decisions gives them a sense of ownership. This leads directly to a second tip: “Understand your Responsibilities to Stakeholders.” Consider four main stakeholder groups: customers, employees, investors, and society. Each group has value, and it is up to you and your team to make decisions that benefit your key stakeholders.
Many decisions you face will not have one magic answer to solve the problem. So, when facing a decision that is not so black and white, consider starting with your stakeholders and reviewing your responsibilities to each.
A third tip for effective decision making is to “Familiarize Yourself with Financial Statements.” As an organizational leader, many of your decisions have financial impact. Familiarizing yourself with financial reports gives you more confidence when making decisions. You should feel comfortable with three financial statements: the balance sheet, the income statement, and the cash flow statement. These three statements summarize your financial health; if you have a good idea of how your company is doing, you can better determine your departmental or team budget. Having a clear budget can help you make decisions; if one choice does not fit your budget, it is clear you need to go with the other one.
The last tip is to “Learn from other Leaders.” There are many practical TED talks and podcasts you can listen to for free, but if you want to get more personal, you could also network with others in your field or industry and look for people online. There are also several online or in-person training courses that you can take. You can learn a lot from sitting and listening to another great leader, whose experience and guidance can provide extra confidence when challenging situations arrive.
Data vs. Intuition
As a leader, there are times when you need to use data to make decisions and other times when you need to rely on intuition. How will you know when to use each? There is no magic formula to help you navigate this. Sometimes, data will give you only a fraction of the information about your decision. Sometimes, intuition alone will leave you vulnerable to blind spots and assumptions. So, how do you balance the two? In the world of business today, most decisions are data-driven.
According to Harvard Business School,
“In fact, a recent survey of more than 1,000 senior executives revealed that data-driven organizations are three times more likely to report significant improvements in decision making compared to other firms that leverage data less” (Farrell, 2023).
Although data are crucial when it comes to decisions, they do not give you a “one size fits all” solution for the problems you need to solve. Each issue is complex and different; since no two situations will ever be the same, this is where your intuition comes into play. Using intuition, you can gauge what is morally right, what will benefit most of your stakeholders, and which decision feels “right.” For example, a surgeon in a crisis would not rely solely on data. They know what to do and rely on their intuition to guide them in a crisis. Although your decision-making might not be this drastic, it is still an excellent example.
Now, how do we respond when the data look good, and it seems like the right decision, but we have a wrong gut feeling about it? The first thing to do is to stop and analyze your feelings. Cheryl Strauss Einhorn, author of “Emotions Aren’t the Enemy of Good Decision Making,” states, “Naming our feelings can help create a little space between our emotions and our actions” (Einhorn, 2022). This will allow us to acknowledge our feelings but not let our emotions take over in a situation. But by allowing ourselves to feel and acknowledge these feelings, we can arrive at situations with clear judgment to make the right decision. It is essential to use data and intuition, but do not let one or the other take control of the decision-making process. Find your balance between the two and make better decisions for you and your team.
Becoming A Confident Decision Maker
Our final advice for leadership decision-making is to make decisions with confidence. Why is making decisions confidently so important? When you make confident decisions, you can eliminate negative feelings after making decisions.
Indeed, the Career Guide gives a few reasons why confidence in decision-making is essential: First, employee satisfaction and engagement will increase, since how you make decisions affects your employees. As earlier discussed, including your employees in decision-making can increase engagement and give them a sense of ownership. Second, having a clear goal means knowing what you want and how to achieve it, so you can take action faster. Third, confident decision-making leads to better outcomes. Rather than focusing on quick decisions or fear-based decisions, you are informed and confident when making decisions, and the results will start to show.
A few changes in behavior can help you make decisions with confidence. The first one is “Don’t assume.” Do not assume you know everything; allow yourself to seek advice from others sooner. This will enable you to be accurately informed about the decision at hand and all the possible solutions. The second step is to suspend your judgment. Try to step into situations without a bias because your bias is not always reality. You must gain new perspectives or angles to develop a clear mind and see all the possible answers. The next tip is to create alternatives; there may be situations where your options will not solve your problem. So, brainstorm, use creativity, and think of new options that better fit your problem. Tip number four: remain objective. Before deciding, ensure you know all the facts and are well-informed about the situation to stay objective. The next tip is to release attachment; one outcome might have the perfect outcome where everyone is happy, but you cannot become attached. When confidently making decisions, you need to focus on the journey rather than the outcome (Indeed Editorial Team, 2022).
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Conclusion
In closing, confident decision-making is one of a leader’s most beneficial qualities. It does not just happen overnight; it takes practice and training to obtain this skill—and will likely include involving your team. Do not feel you must make all your decisions alone. Listen to your peers and employees; their perspectives can offer fresh perspectives and lead you to better choices. It also will increase employee buy-in and ownership during these situations. Understand your stakeholder responsibilities and the value each of them holds to you to make more thoughtful choices. Typically, executives must deal with financial decisions; you must stay informed about financial statements to help make the right decisions. Lastly, balancing data and your intuition both rely on each other. Knowledge and intuition will help you gain the confidence to make quick and decisive decisions. Remember, leadership is a journey of growth and adaptability. As you hone your decision-making skills, you’ll not only improve your organization’s overall performance but inspire others around you.
References
Cote, C. (2024, March 14). How to enhance your decision-making skills as a leader. Harvard Business School Online Business Insights. https://online.hbs.edu/blog/post/leadership-decision-making.
Einhorn, C.S. (2022, September 9). Emotions aren’t the enemy of good decision-making. Harvard Business Review. https://hbr.org/2022/09/emotions-arent-the-enemy-of-good-decision-making.
Farrell, M. (2023, January 6). Data and intuition: Good decisions need both. Harvard Business Publishing.www.harvardbusiness.org/data-and-intuition-good-decisions-need-both/.
Indeed Editorial Team. (2022, December 5). The importance of confident decision-making in the workplace. Indeed. https://www.indeed.com/career-advice/career-development/confident-decision-making.
