Effective Decision Making for Leaders

A global study conducted by McKinsey in 2019 found that just 20% of executives believe their organisations excel at decision-making.

The same study suggested that those who excel receive, on average, a 20% higher return on their investments. This statistic underscores the importance of effective decision-making in leadership.

This blog and video are designed to improve your ability to make timely and effective decisions.

Understanding Decision Fatigue

 

 

To start, it’s crucial to understand that we have a limited amount of cognitive bandwidth or mental firepower each day.

The more decisions we make, the less effective we become at making them. This phenomenon is known as decision fatigue or ego depletion.

One study published by the National Academy of Sciences investigated the factors that had an impact on whether or not a judge approves parole for prisone.

The research was conducted over a ten-month period and looked at 1,112 rulings.

The researchers found that a judge was much more likely to grant parole at the start of the day. As proceedings wore on and the judges became more fatigued, the chance of a favourable ruling for the prisoner dropped to zero.

But why was this the case?

As the judges became more fatigued, they felt less confident about making important decisions and erred on the side of caution.

So, how do we use this knowledge to our advantage?

Here are four practical tips to help you make better decisions.

 

#1. Reduce the Number of Decisions

 

The first tip is to reduce the number of decisions you make each day.

Notable figures like Mark Zuckerberg, Matilda Kahl, and Barack Obama are famous for wearing the same or very similar outfits every day.

Why? Because it reduces the number of decisions they need to make, preserving their mental brainpower for more critical decisions.

This is why you’ll rarely see me wearing anything besides blue T-shirts, blue polo shirts, or smart blue shirts.

 

#2. Plan Your Decisions

 

The second tactic is to plan your decisions.

Schedule your significant, strategic decisions when you are fresh. These might be different times of the day for different people, but plan these decisions when you know you have the maximum mental firepower available.

For most of us, this means avoiding making big decisions towards the end of the day.

 

#3. Delay Your Decisions

 

The third tip is to delay your decision-making.

We often think that making quick decisions is a valuable trait in leaders. However, our job as leaders is to make effective decisions, and quick decisions are rarely effective.

If you have an important decision to make and know your mental reserves are low, delay the decision.

There’s truth in the adage, “If you’ve got a problem, sleep on it.”Delaying a decision allows your brain’s Default Mode Network (more on that here) to process the challenge unconsciously.

 

#4. Delegate Decisions

 

The fourth tip is to delegate as many decisions as possible.

If a decision doesn’t require your expertise, experience, or approval – delegate it.

You can do this by using processes or tools like the Decision Tree that Susan Scott discusses in her book, Fierce Conversations.

 

Free PDF Download

 

Want to dive deeper into decision-making and improve it within your team or organisation?

Download my free PDF with the five decision-making strategies most commonly used by high-performing teams.

Click here to get the PDF Guide.

 

Photo by Jens Lelie on Unsplash