Additionally, since performance is gauged by the actions they take that have an impact on an organization’s performance, it could be stated that decision-making success is the measure that distinguishes good from bad management
How Decision Making Skills Separate Effective Leaders from the Others
Decision-making is so pervasive in management that making sound decisions marks the measure of success of a manager. Leaders understand the importance of decision-making to not only to their career but to the success of their organization.
How is it that some business initiatives get supported and not others? Or how is it that one organization changes direction or acquires a company in a related industry and others in the same industry do not?
Some leader or some group made a decision to take a specific course of action. It is through decision-making that those with authority coordinate, re-align, and re-direct the systems of their organization. They make observations and decide to take specific courses of action. With organizational performance in the balance, the soundness of the decision-making process becomes a key determinant of success.
How Bad Decisions can Haunt a Company
In looking at some significant decisions in the past, consider the following.
- Would Xerox have ever existed if Kodak decided in favor of acquiring Chester Carlson’s patent for electrostatic photograph?
- Would Microsoft have ever existed if IBM decided in favor of developing their own software for their PC?
- Would the large transportation companies have ever existed if the railroads considered themselves to be in the transportation and not the railroad business?
- Would the electronics industry be different today if the U.S. firms decided to invest in developing their inventions like the fax machine, the video recorder, and high definition television?
The Science of Good Decision-Making
In spite of this importance, business leaders spend very little time in efforts to improve their decision-making. Unlike scientists, they aren’t schooled in the science and art of decision-making. They assume it to be part of the sympathetic nervous system and similar to swallowing.
People can clarify this line of thought by considering past events in their lives. This history can be viewed as a series of events, with some being more significant or memorable than others, or it can be seen and understood as a story that includes many events woven together by underlying themes.
Which perspective provides greater understanding of experiences? Clearly, looking back on the past as a tapestry of interwoven threads affords a more meaningful understanding of what has been. It can also be extended to what will likely be if nothing changes. People who aren’t consciously aware of this dynamic and are unaware of past influencing factors create a future that is just an extension of the past.
Since leadership is about creating a future that is more than an extension of the past, sound decision-making is important for those wishing to lead.
The world is today is changing at a faster rate, is bigger in scope, and is more dynamically complex than in the past. The time from decision to effect is shorter now. Because change is occurring more frequently, the future reality is approaching quickly and decision-making effectiveness is more critical than ever before.
Paul Larson - Paul W. Larson is the founder and President of the Myrddin Group LLC and he brings over thirty years experience as a successful operations ...
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