How to make great decisions.
As a CEO or leader, your basic job role is to make the big decisions. Is there a way to optimise for effective decision-making?
Research suggests that we make around 35,000 conscious decisions per day. Many of these are small and seemingly insignificant, but it’s fair to say our overall life experience is the cumulative outcome of these decisions. If you’re in charge of a business, you can figuratively live or die by one decision.
As a CEO or founder, decisions take on a greater important and impact everyone around you. One bad call can be fatal, whether a misjudged order or an emotional response under pressure. History is littered with examples of great men & women making good decisions in sticky situations, and bad ones.
Everything is ultimately your fault. Everything! We must get comfortable with the fact that ultimate responsibility lies with the person in charge. A company’s revenue is directly correlated with the size and scale of the problem it solves, and therefore the CEOs pay reflects the decisions they make related to the problem. They are not getting paid not for their time or for their skills, but their decision-making prowess.
I believe decision-making comes down to 3 things we call SDS, for state, data & strategy.
State means your physical & emotional state of being. Data, means having the necessary information & context. And action relates to the actual doing. Let’s break down each one.
State is everything. How many decisions have you made in the past from a negative state of being, only to regret it later? Perhaps you were angry, sad or frightened? When I think about state, I think about it in 2 ways; immediate and long-term. Of course, taking ongoing action to foster an optimal state of being in the long-term will improve your ability to manage in the short term, but there are tools that can be called upon for when surprising situations and triggers show up.
There’s a few thins you can do to change your state in the short-term. It’s best to practice and see what works best for you. You may find you already know from experience.
Box breathing: Inhale for four counts, hold for four, exhale for four, hold for four. Repeat.
Progressive muscle relaxation: Tense and relax each muscle group from toes to head.
Cognitive reframing: Challenge negative thoughts with alternative perspectives.
Mindfulness meditation: Focus on your breath and observe thoughts without judgment.
Physical movement: Take a short walk or do simple exercises.
Physical stress: Use an ice bath, cold shower, or sauna to shift focus.
For long-term state management, which supports your ability to return to an optimal state in the short-term, I focus on incorporating a variety of the following into my daily & weekly routine:
Regular exercise: Aim for 30 minutes of moderate exercise most days.
Consistent mindfulness practice: Start with a few minutes daily and gradually increase.
Time management: Use tools like the Eisenhower Matrix to prioritize tasks.
Boundary setting: Establish clear work-life boundaries.
Build a support system: Connect regularly with supportive colleagues, friends, and family.
Prioritize self-care: Focus on diet, sleep, hobbies, and regular breaks.
Continuous learning: Invest in personal and professional development.
Regular check-ins: Schedule periodic self-assessments of stress levels and well-being.
Data is the relevant, contextual information you have available in order to make the best decision. There’s a delicate balance here between having enough data and taking action, but we need to feel confident in our decision based on the facts we can establish. Creating a system for obtaining and interpreting data quickly improves our ability to make good decisions.
Here’s how I approach it;
Conduct comprehensive research from multiple sources.
Explore a wide range of alternative options.
Engage diverse stakeholders for input.
Conduct scenario planning to assess potential outcomes.
Assess long-term implications beyond immediate results.
Iterate and refine options based on new information and feedback.
Strategy is how you go about actioning your decision. This is the culmination of a fortified state of mind & body, amassing sufficient data so as to make a decision you feel confident in, and then executing. When thinking of a strategy, I find the below model useful;
Define clear, measurable objectives aligned with overall goals.
Identify key drivers and potential barriers to success.
Develop a detailed action plan with assigned responsibilities and deadlines.
Allocate necessary resources and address capability gaps.
Communicate the strategy clearly to all stakeholders.
Implement the plan and monitor progress against defined objectives.
Adapt and iterate based on monitoring results and feedback.
Evaluate results and document lessons learned for future decision-making.
Ever hear people say “they do it as second nature?” Experience comes from repetition. You have to be in the arena, making decisions, to learn how to make good ones. Preparation can only get you so far, sometimes you have a split moment, and you’ll be required to go through the above process too quickly for the conscious mind. Subconscious response is the gradual repetition of conscious programming.
Decision fatigue is real. It means the energy lost on making basic decisions that yield little value. Make fewer decisions by streamlining your choices. Steve Jobs, for example, wore the same thing almost every day. The more energy you conserve by avoiding decisions that you deem unimportant, the better able you will be to make big decisions when it matters. For me, it’s a case of defining what’s important. Creating rules and systems to streamline decisions, or outsourcing the power to someone else.
Consistently good decisions = good outcomes.
For further reading on this, I would suggest “the slight edge” by Jeff Olsen, first given to me by my coach Oliver Hill (thank you sir)