All the attributes of leadership contribute to a leader’s ability to encourage others to follow. A follower’s initial attraction to a leader may relate more to charisma and quality of vision that anything, but those characteristics will pale if they are not reinforced by effective decision making.

If you consider leader’s job to move people from one place to another, either physically like Moses leading the Israelites from the Land of the Pharaohs, or figuratively like the late Roberto Goizueta leading Coca Cola into the era of reinvigorated growth and profitability. In both cases, as with all leaders, it is decision-making that makes the critical difference. Moses decided to defy the Pharaoh’s repressive measures and in the process began the exodus from Egypt. Goizueta decided to abolish the structure that gave the bottler’s effective control of the corporation. By doing so, he opened the door for Coke to control its own destiny.

Moses and Goizueta’s decisions were marked by action and follow through. Both men decided to do something, did it, and followed through on the consequences of their actions. While the examples of Moses and Goizueta worked well in the long-run, each suffered short term setbacks. With Moses, it was continued resistance from the Pharaoh; and with Goizueta it was dyed-in-the-wool resistance from Coke’s finance committee headed by his former mentor, Robert Woodruff. Despite these obstacles, both Moses and Goizueta persevered and held fast to their decisions.

Decisions, it is often said, are not made in a vacuum. They are formed by context that is an amalgam of circumstance, experience, personality, and situation. Decisions emanate from context as much as they do from people. But it is up to the leader to use the context to create a need for decision-making. Effective leaders are adept at creating an urgency for decision. Andrew Grove, the long-serving CEO of Intel, demonstrates the power of the moment with his mantra, "only the paranoid survive." This adage means you’d better watch out for everyone because they are out to get you. While this insight may be detrimental to relationships, it is essential to competitive business practices. Grove weighs key decisions against the background of context—e.g., the market place, the competition, consumer trends. And by bringing his key advisors into the loop with him, he convinces them of the need to act and act boldly.

The ability to make effective decisions is rudimentary to leadership. But unlike character, which is formed by nature and experience, decision-making can be taught. What are the elements that go into effective decision-making? Here are seven points to consider

Decision-Loop

Determine purpose for the decision… Before a leader can decide, she must orient herself to the context of the organization. In other words, she must ask, why are we doing what we are doing? How does this decision fit into our organization’s values? Why are we considering making a decision now? Answers to those questions should be consistent to an organization’s mission and purpose. If they coincide, then the leader must use the values of the organization to help decision-making.

Reinforce alignment… Effective decisions within an organization must be within character—that is, they must be in alignment with the organization’s purpose for being. So, if the answers to business purpose are muddled and inconsistent with an organization’s values, then the leader has a problem. For example, if an air conditioning repair service finds that it is doing plumbing work, the boss must decide one of two things: either, return to air conditioning basics; or expand the business charter to include plumbing.

It is perfectly acceptable to change the purpose of the business, but that requires a decision. What is unacceptable is to decide not to decide—in other words, to continue the status quo. This lack of decision-making creates confusion in the minds of employees, vendors, and customers. Strategists stress the importance of alignment, making certain that people and purpose fit together.

Gather facts… Context shapes the decision-making process. But context depends upon perspective—who you are and where you stand within the organization. In other words, the company looks like a tightly humming operation to a CEO. To a front-line manager, the company seems a morass of conflicting goals, ill-defined objectives, and confused personnel. It is, therefore, the leader’s responsibility to ascertain the facts, the God’s honest truth. He can do it two ways: one, by walk around frequently—and physically. (The view from behind a desk can be rose-colored); two, rely upon data gathered by trusted sources. (In many cases, the more good sources the leader has, the better informed he will be.)

Solicit opinions… Good leaders learn to let others speak first. If a leader puts in the first word—other than to invite ideas—he by virtue of position may inhibit others from speaking out. The speak-first leader runs the risk of stifling creative suggestions, constructive or critical. Worse of all, a leader who ventures an opinion right away, either directly or indirectly, communicates that he does not value other people’s ideas. When followers no longer feel as contributors then they will begin to lose interest in the decision-making process, and ultimately lose enthusiasm for the organization itself.

Make the decision… Decide the big issues. Front line people can make many decisions. For example, customer service representatives should make customer service decisions that affect the well-being of the customer relationship. Likewise, many decisions affecting operations, logistics, and marketing, should be made by people who will live with their consequences. By contrast, decisions that affect organizational health must be made by the leader—the ultimate person in charge. When the "buck stops here" sign is on your desk, you must be the one to make the hard decision.

Abide by the consequences… Decisions have consequences; those consequences will become embedded in the fabric of an organization. If a physicians group decides it wants to contract with a hospital, the decision is far-reaching and will affect the growth opportunities of the practice. Yet, if the practice declines to affiliate with a hospital chain, the ramifications also will have an impact upon future growth. Regardless of what the decision is, the entire organization must learn to live with the results. It then becomes the leader’s responsibility to rally the troops around the decision and make it work to the benefit of all involved.

Learn to repeat the cycle… Just as decisions are determined by context, circumstances change. That change requires a re-thinking, a re-examination, a re-framing of past decisions. When such a situation occurs key decisions will have to be revisited. Leaders can agree to let original decisions stand, but they must periodically evaluate them in the light of current situations. For example, if a supermarket chain decides to open a video rental boutique, it must periodically look at the business that the boutique is generating to see if it warrants remaining. Likewise, if a company decides to outsource its benefits administration, it would be wise to consider the cost of those services over time to see if bringing such a service back in house. Change is a way of life, and therefore, leaders must continue look to re-evaluate the decisions affecting their situation.

The decision-making process described here applies to leadership decisions, those that affect the outcome and future of an organization. But the same rules apply to departmental and front-line decision making. The only difference is that the consequences affect fewer people. A customer service supervisor’s decision to refund a customer purchase may add up to twenty dollars for the company, but may actually be worth many thousands in good will. A manager’s decision to embark on a one million dollar new product venture is all-important to him, but may be of little consequence to a mega-billion enterprise. A president’s decision to open a factory in Asia may affect their entire company. Regardless of scale, decisions are choices with consequences.

Ultimately effective decisions are rooted in the character of the man. We can look to our Presidents and see evidence of their behavior in key decisions. John Kennedy pushed the world to the brink of nuclear war when he pressed the USSR to remove the nuclear missiles from Cuba. This decision echoed Kennedy’s firm resolve, but also echoes with the bravado he displayed in his reckless personal behavior. Richard Nixon illustrates his duality of character with two key decisions: his visionary journey to meet Mao Zedong in 1972, and his persistent lying about the Watergate cover-up.

Every leader has a duality—the inevitable pull between altruism and self-interest; it is part of human nature. The challenge, of course, is to enable the altruistic side to win more times that self-preservation. The struggles of William Jefferson Clinton are a contemporary case in point. President Clinton is bold on matters of foreign affairs and domestic race relations, but shallow and venal in his personal behavior with some female associates. History will be the ultimate judge of his effectiveness.

Effective decision-making can lead to effective leadership. It is a matter of applying critical thinking skills serve the benefit of the group rather than the self interest of the leader. Easy to state, but challenging—yet infinitely rewarding--to deliver.

© 1999 John Baldoni