Episode #20: Make Great Decisions

Getting the most out of your team

There are so many factors to making great decisions. Some of these factors are technical and analytical, but many are based on your leadership skill. In today’s episode, we deal with the fundamental question of how to get the most from your people, to enhance and improve your decision making capability.

I start this episode by asking the question, ‘Why all the fuss about diversity and inclusion?’ From there I go on to cover:

• How great leaders set an appropriate decision making culture

• Why it is so important to foster a culture where robust challenge is the norm

• Some key questions that will help you to reflect on your behaviour when faced with robust challenge

• The five ways to drive better decisions through your people - these are simple but powerful, and will make a huge difference to the quality of your team’s decisions if you have the patience and will to implement them

• What I believe the ‘perfect template’ for great decision making looks like

• Three 'traps for young players' that I see many leaders unwittingly fall into - there’s no reason to fall foul of these once you’re aware of them, so make sure you write these ones down and check in with yourself every now and then

MAKE GREAT DECISIONS: GETTING THE MOST OUT OF YOUR PEOPLE

Episode #20 Transcript

There are many factors to making great decisions - some of which are technical and analytical. But many are based on your own leadership skill. In this episode, we deal with the fundamental question of how to get the most from your people to enhance and improve your decision making capability.

Today we will:

• Ask the question: why all the fuss about diversity and inclusion?

• Talk about how great leaders set an appropriate decision making culture.

• Cover the five ways to drive better decisions through your people.

• Talk about a few of the traps for young players that I see many leaders fall into.

Let's get into it!

Causation vs. Correlation

When we talk about getting the most out of our people we can't do that without talking about diversity and inclusion. And why all the fuss about this? Malcolm Forbes, the publisher of Forbes Magazine, said, "Diversity is the art of thinking independently together." If we think about that, it simply means taking the best every individual has to offer to improve the overall result that we can achieve - and it actually does help you to achieve better results.

Research tells us that more diverse companies actually perform better in terms of their profitability. This is generally accepted as true - although it's probably opportune for me to remind you to beware of the important distinction between causation and correlation. I use this example in Episode 8 when I was debunking the myth that happy workers are productive workers. For example, a causal relationship is one like we have between altitude and temperature. It's causal because one actually causes the other by direct impact. The higher up you go in terms of altitude, the colder it gets in terms of temperature. That relationship is causal.

But there are non-causal relations that are simply correlations. Smoking and alcoholism are correlated, but one doesn't cause the other. Smoking doesn't cause you to be an alcoholic, and being an alcoholic doesn't cause you to smoke. But we find that quite often the two go together. We've just got to be careful to understand that distinction - so, the first question I ask myself is: what else is going on in those companies? Is it just the diversity?

Why would companies perform better?

The first thing - if we boil it all down - is that it's just going to be the sum of the cumulative actions that the company decides to take. If the cumulative actions are better than their competition, then we can assume that they're making better decisions on virtually everything.

How do they deliver better decisions? Well, there's some obvious things like accuracy, but speed is so important (I'm going to talk about speed decision-making a lot over the time we get to know each other). But when we think of it from the people perspective, we're talking about the ability to harness a broader range of opinions, knowledge, experience and perspective. We're talking about understanding issues more holistically because of this - and this helps us to also avoid groupthink and a 'yes man' culture.

Bringing perspectives from other industries and other experiences that people have can quite often give you an edge over organisations that don't have that. This is intuitively obvious, so we need to think about this when we're building teams to make sure that we have as diverse a team as possible.

Just stepping back a little from the diversity that individual people bring, there's also the diversity of the different functions that you have in your organisation. When making a major decision you may want to seek a legal opinion, and an opinion from finance, a commercial opinion, you may want to understand from HR what the people impacts are, and maybe a Chief Marketing Officer is going to tell you about the customer impacts. But you want to weigh in all of those differences as well, because they're going to give you a better view of the problem and enable a better holistic solution.

This is all great in theory, and if you say it fast enough it sounds easy. But, how do you actually create a culture inside your organisation that enables this to happen? I have to tell you, it does not happen of its own accord. There's nothing automatic or natural about the way these opinions are brought together to actually build a better decision.

what does an appropriate decision-making culture look like?

Great leaders set an appropriate decision-making culture. People need to know, for a start, that robust challenge is expected and rewarded, not frowned upon and suppressed. You have to be able to challenge each other, and the people around you need to be able to challenge you as a decision-maker to bring out your best. This process necessarily has some tension, and some friction if you actually want to bring these different views to the table, debate them, and work through them together. Now, virtually every leader says that's what they create. But do they? How many people around you as leaders do you see doing this well? Fostering a culture where robust challenge is the norm, and people bring out their own viewpoints fearlessly because it's not personal, they know that it's for the benefit of the whole group.

Many leaders unwittingly kill this culture because they can't handle that robust challenge themselves. You don't want to be one of those leaders. Let's see if these things ring a bell:

• Do you know any leaders who get angry when someone offers something that they don't like?

• Have you ever seen a leader shut someone down in mid-sentence because their views don't accord with that person?

• Have you ever experienced another leader who's not listening actively - or in fact, not listening at all?

• Have you seen leaders put their view out first and make everyone else's views simply a formality? Or;

• Have you seen leaders demonstrating their own unwillingness to change their views even when new or better information comes to light?

These are things that so many leaders do - and they don't know they're doing it! They don't understand the impact it has on their team, but it certainly pushes people back to a place where they're not going to give you the full benefit of their views and perspectives. And that's going to sum up the demise of the decision-making process right there.

Five ways to drive better decisions through your people

I want to commence with a caveat here: don't ever mess with the accountability model. If you haven't listened to last week's episode, Execution for Results, you need to go and do that because that's how you drive accountability to get superior execution.

The object of the exercise is to leverage the breadth of expertise, experience and perspectives - where appropriate - from the people around you. Once you get the right people involved, how do you harness this power? Well, you need to set expectations for getting appropriate involvement from the right people who can add value. Then, you have to do five key thing:

1. For anyone to give you sensible input into a problem, or a decision you have to ensure that they have access to all the available information

You can't give someone bits and pieces of information and expect them to form a sensible view. So make sure that everyone in the loop has all the information that you have.

2. Draw out the views on what they see as important

You don't want 'yes men', and you don't want a 'yes man' culture. It adds absolutely no value. You've probably heard me say before that I say to my direct reports, “If you don't bring something unique and different to the table, if you think the same things that I think, then at least one of us is redundant - and it's probably not me.” As the leader you need to set the expectation that people's best is required and that they have to put their own view forward without fear or favour.

3. Allow debate and stimulate challenge

In fact, the only way this happens is if you are actively driving the room. So, if you're a decision-maker, and you're sitting with a group of people, you need to actually bring out their best. Ask them questions. If someone's being particularly quiet say, "Okay Nancy, what's your view on this?" Or, "Okay, we haven't yet heard from you Andrew. Do you have a perspective?"

Get people used to nailing their colours to the mast - basically saying, “This is what I think, this is what I believe, and this is how I think we should proceed.” If you can do that, you'll have a lot dissent, a lot of disagreement, but you'll also have much better information on the table with a much more holistic set of opinions and viewpoints.

4. Make the process pure

When I say make the process pure, what I mean is, debate happens in the room. Debate happens when debate is appropriate. It doesn't happen around the water cooler. And, once a decision is made, you need solidarity around that decision. It's not a democracy.

But, by the same token, you need people to all get behind and say, “I've given my opinion, I feel as though I've been listened to, and the decision is X. That's how we're going to move forward.” It's pretty common - and to an extent it's just human nature - for leaders to say, “If I don't agree with a decision, I'm going to white ant. I'm going to tell my team I don't agree with it.” The ramifications and repercussions of that are much bigger than you could possibly imagine: people lose faith in the actual system and the structure of the organisation, and that's not where you want to be.

5. Make sure that the decisions still rest with the accountable person

This is not decision-making by committee. It's not a democracy. The decision-maker has the decision rights. You have to make sure they have all the available information at their fingertips in order to make the best decision they possibly can.

HOW DO YOU MAKE GREAT DECISIONS?

What would the perfect template for great decisions made with the right level of consultation to bring out the value of the people you have around you look like?

Step #1: Know who needs to have input

Here's a little hint: it's not everyone. There is such a thing as over-collaboration. And because collaboration and inclusion have become so popular and so hackneyed these days we somehow get the sense that we have to include every single person in every conversation and every decision. That's just crap. It doesn't work like that. You need to know who needs to have input based on the value that they can bring. And that's the first decision, and the first step in harnessing the diversity that you have.

Step #2: Bring out the views of your people

As I said, this is easier said than done. You have to really work at making sure that people are putting their real views on the table, and that you're managing to get the value of the different perspectives and experiences they have.

Step #3: Consider all the information at your fingertips carefully and weigh it up according to the most critical factors

Of the fifty things in front of you, only three or four are going to be important. But you have to be able to identify those and let the rest of it go - this is another subject all in itself. Once you got all the information at hand and you know you're not going to get any more, it's time to make a decision. And it's time to make a decision quickly.

Don't sit around ruminating, wringing your hands, and wishing you had more information for weeks on end. Make a call. The way you make a call is to actually let people know really clearly that you're the accountable decision-maker and here's what you've decided to do. It goes something like this:

“Okay, thank you very much everyone for your input. It's been extremely valuable. I've heard what you all have to say and I've listened carefully to your input, and now I've decided that we're going to do X. And we're going to do it for these reasons.”

That gives you the opportunity to explain what the decision is, to make it very, very clear which direction you're heading and why you've decided to do that. Whether people find that a good, bad, or indifferent decision, they'll respect the fact that you've listened to them. If they feel heard they will know that they've had their input and they've been able to influence in some way. Clarity, decisiveness, and tempo decision making are priceless.

Traps for young players

There's three of these that I just want to drop on you:

1. Don't let the diverse inputs that come from a decision making process confuse you

We've spoken about this just briefly - sort out what's real and what's noise. You have to know what the most important bits of information that are in front of you are, because some - even thought they are very, very dear to one of the people that's giving you input - is virtually irrelevant to the decision you have to make. Being able to know that is quite difficult.

2. You need real judgement to work out how to weigh the appropriate advice and viewpoints from a diverse group

Now, it can be really tricky, and this is where your experience, temperament, and your quotients come into play - IQ, EQ, and AQ. If you’ve not seen the Leadership Level Up Masterclass, I talk a little bit about the three-legged stool of IQ, EQ, and AQ, and how they actually support your performance as a leader:

• IQ, of course, is intelligence

• EQ is your emotional intelligence; and

• AQ is adversity quotient - or, your resilience.

Sometimes you need all three of these when making a decision.

As a quick example, spare a thought for a CEO making a media statement in a crisis situation:

• They will generally have considered a range of advice from experts, from both within and outside their organisation.

• There will be a statement that they would like to make personally - but very often they can't.

• They'll have constraints that need to be balanced and adhered to from legal, risk, public relations, share holder relations, and obviously from a market disclosure position if it’s a listed company.

This is why quite often these statements seem to be dispassionate and sometimes even robotic. Very few leaders actually get the balance right (which we can all see in retrospect).

There have been some really memorable examples with Tony Hayward, the chief executive of BP at the time of the Deepwater Horizon disaster in the Gulf of Mexico. Or Deborah Thomas, the chief executive of Ardent Leisure when the Dreamworld disaster occurred in Australia in 2016. These are smart people, so it isn't easy.

But you don't want to be one of those leaders that completely gets it wrong. So, make sure that you use all the judgement you possibly have at your disposal - and use your mentors to make sure you get this right - because it isn't easy.

3. Don't ever cut across the accountability culture of your organisation

It has to be crystal clear who has the decision rights. If it isn't, you're just disempowering your people. Don't ever let your accountable decision-makers feel as though you've put them in a situation where you're after consensus or a decision by committee. They still need to know that they carry the can for the decision and for the eventual outcome that that generates.

In my experience, decision by committee is worse than a non-consultative decision because it lacks clarity. Decisions by committee is slow and by definition, they are sub-optimal. They don't allow solidarity post-decision because no one is really happy. So, make sure your accountability culture remains strong.

RESOURCES AND RELATED TOPICS:

• Ep. #11: Pale, Male and Stale - Listen Here

• Ep. #19: Execution for Results - Listen Here

• Ep. #31: Don’t Shoot the Messenger - Listen Here

• Ep. #53: Don’t Overdo Collaboration - Listen Here

• Ep. #80: Decision Fatigue - Listen Here

• Ep. 113: Unlocking Diversity - Listen Here

• Ep. #141: Mastering Risk - Listen Here

• Ep. #192: Avoiding Common Biases - Listen Here

• Ep. #216: High-Impact Decisions - Listen Here

• Ep. #217: Trusting Your Instincts - Listen Here

• Explore other podcast episode - Here

• Take our FREE Level Up Leadership Masterclass - Enrol Now

• Leadership Beyond the Theory - Learn More

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