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- Herausgeber: John Wiley & Sons
- Kategorie: Ratgeber
- Sprache: Englisch
Discover the best approaches for making business decisions Today's business leaders have to face the facts--you can't separate leadership from decision making. The importance of making decisions, no matter how big or small, cannot be overstated. Decision Making For Dummies is a candid resource that helps leaders understand the impact of their choices, not only on business, but also on their credibility and reputation. Designed for managers, business owners, and anyone else who makes tough decisions on a daily basis, this guide helps you figure out if the decisions you're making are the right ones. In addition to helping you explore how to evaluate your choices, Decision Making For Dummies covers ways to receive support for decision making, delves into various decision-making styles, reviews the importance of sifting through data and information, and includes information on ways to engage others and make decisions collectively. Being in charge can be challenging, but with this guide, you don't have to go it alone. * Discusses the effects of decision making and outlines the considerations that must be made to gain trust and confidence * Demonstrates ways to communicate particularly sensitive decisions, and offers approaches for making bold decisions that challenge the status quo * Delves into the risks and benefits of certain decisions, and shows readers the best ways to evaluate choices * Outlines smart strategies for engaging others and drawing them into the decision-making process Crucial decisions need to be made every day in the business world, so there's no time to waste. Make Decision Making For Dummies your primary resource for learning to choose your actions wisely and confidently.
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Decision-Making For Dummies®
Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com
Copyright © 2014 by John Wiley & Sons, Inc., Hoboken, New Jersey
Published simultaneously in Canada
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Library of Congress Control Number: 2013956849
ISBN 978-1-118-83366-7 (pbk); ISBN 978-1-118-84749-7 (ebk); ISBN 978-1-118-84753-4 (ebk)
Manufactured in the United States of America
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Decision-Making For Dummies
Visit www.dummies.com/cheatsheet/decisionmaking to view this book's cheat sheet.
Table of Contents
Introduction
About This Book
Foolish Assumptions
Icons Used in This Book
Beyond the Book
Where to Go from Here
Part I: Getting Started with Decision-Making
Chapter 1: Big-Picture Pressures on Decision-Makers
Making Decisions in an Ever-Changing World
The ground shifting beneath your feet
Assessing what these changes mean to you
Embracing Uncertainty and Unpredictability
Increase integrity and truth-telling
Notice what is happening on the innovative edges
Don’t limit planning to an annual task
Make your decision-making process values-based
Cultivate learning and curiosity
Invest in your personal and professional growth
Raising the Integrity and Ethics of Business Decisions
Overcoming factors that lead to unethical decisions
Designing a healthy decision-making environment
Chapter 2: The Key Ingredients for Effective Decisions
Distinguishing the Different Kinds of Decisions
Strategic decisions
Tactical decisions
Operational and frontline decisions
Identifying the Different Decision-Making Styles
Recognizing the Workplace Environment and Culture as a Force
Mapping your company on the innovation curve
Accounting for company organizational structures
Assessing the health of the workplace
Developing the Decision-Maker: To Grow or Not?
Knowing thyself
Avoiding temptations that obstruct sound decisions
Chapter 3: Company Culture and Decision-Making
Recognizing the Importance of Company Culture
Paying attention to invisible forces
Assessing your company’s mindset
Spotting addictions in company culture
Creating High Performance Workplaces for Decision-Making
Paying attention to long- and short-term focus
Using smart design to speed up decision-making
Paying attention to working relationships
Assessing Risk and Its Impact on Decision-Making
Understanding how humans perceive risk
Working with risk in a complex world
Part II: Knowing and Growing Yourself as a Decision-Maker
Chapter 4: Growing Your Business by Growing Yourself
Connecting Personal Growth to Effective Decision-Making
Exploring vulnerability as a leadership quality
Having compassion for the ego
Tapping into emotions for effective decision-making
Recognizing How Beliefs Influence Decision-Making
Examining your beliefs: Do they limit your options?
Understanding how you perceive insight, intuition, and vision
Acknowledging hidden bias or prejudice
Gauging Personal Comfort with Conflict and Ambiguity
Using conflict to your advantage
Understanding classic responses to conflict
Chapter 5: Raising Self- and Organizational Awareness for Better Decisions
Understanding How You Make Decisions
Instinctual decision-making
Subconscious decision-making
Belief-based decision-making
Values-based decision-making
Values-driven decision-making
Comprehending the Value of a Deeper Intelligence
The link between your heart and your head in decision-making
Putting this knowledge to work
Reducing Stress to Make Better Decisions
Manager, manage thyself
Managing the manager
Practical ways to reduce stress in working relationships
Chapter 6: Learning from Mistakes and Unintended Consequences
Engaging in Reflective Learning
Identifying blind spots in the decision-making process
Learning from decision errors and disasters
Turning Hindsight into Foresight
Monitoring implementation and assessing risk
Foreseeing inadvertent effects of a decision
Listening to feedback from key suppliers and customers
Implementing other’s ideas wisely
Stopping to see the big picture
Overcoming persistent problems with procurement
Building Character and Credibility through Mistakes and Failure
Accepting personal responsibility
Separating good judgment from judging others
Communicating authentically
Reinventing your self-identity
Part III: Jumping In: The How-to of Decision-Making
Chapter 7: Understanding Intuitive Decision-Making
Getting the Lowdown on Intuition
Defining intuition
Unraveling myth from fact
Knowing how intuition differs from impulse and fear
Understanding the benefits of intuitive decision-making in business
Understanding How Intuition Works
Processing incoming data
Forming patterns from cues
Building Up Your Intuitive Powers
Identifying your intuitive strengths – the mechanics
Improving your intuitive intelligence
Uncovering procedures that interfere with intuition
Removing the risk of overwhelm
Balancing the Rational with the Intuitive
Chapter 8: Laying the Groundwork for All Decisions
Reviewing the Essentials for Sound Decisions
Identifying purpose
Seeing ahead: Clarifying the endpoint
Determining timing: Why now?
Assessing commitment: Your own and your colleagues
Calculating the risk and impact of doing nothing
Deciding Who Decides
Factoring in management style and working environment
The buck stops where? Authority and responsibility
Investigating Decision-Making Models
Relaying top-down decisions: The command-and-control style
Using consensus
Building a Team for Participatory Decision-Making
Chapter 9: The Nitty-Gritty: Walking through the Decision-Making Process
Clarifying the Purpose of the Decision
Identifying the reason for the decision
Taking a tactical or strategic approach
Taking the Blinders Off: Eliciting All Relevant Info
Doing your research
Gaining some distance to stay objective
Paying attention to different perspectives
Separating fact from speculation
Including feelings as information
Knowing when you have enough
Sifting and Sorting Data: Analysis
Conducting your analysis
Critically evaluating your data
Making assumptions intentionally . . . or not
Establishing and weighing criteria
Avoiding analysis paralysis
Generating Options
Avoiding the one-option only trap
Broadening the option pool by tapping into others’ creativity
Vetting your top options
Assessing Immediate and Future Risk
Identifying risks
Considering people’s response to risk
Mapping the Consequences: Knowing Who Is Affected and How
Making the Decision
Communicating the Decision Effectively
Implementing the Decision
Putting together your action plan
Deciding what is important: Metrics
Setting priorities
Learning from the implementation process
Decision-Making on Auto-Pilot: Intuition in Action
Grasping intuitive decision-making
Taking a closer look at intuition in different situations
Chapter 10: Tackling Various Types of Business Decisions
Visionary Decisions: Getting a Grip on Direction and Focus
Strategic Decisions: Moving from Here to There
Making high-level strategic decisions
Applying strategic thinking to lower-level goals
Adjusting your strategy as necessary
Operational Decisions: Seeking Out Efficiencies
Going to frontline employees for ideas
Making operational decisions: Things to think about
Financial Decisions: Raising and Protecting Your Cash Cow
Securing financing
Sustaining cash flow
Avoiding the five most common financial errors
Problem-Solving Decisions: Getting to the Root of Issues
Uncovering and addressing the root cause
Tackling problems creatively
Making Partnership and Joint Venture Decisions
Determining whether to pursue a joint venture or partnership
Chapter 11: Exploring the Decision-Making Tool Kit
Adopting an Approach That Gets Engagement and Results
Differentiating between authority and power
Powering up a more engaged workforce
Engaging in Formal Decision-Making Methods
Using negotiation to make mutually acceptable decisions
Seeking consensus
Using Participatory Decision-Making Tools
The Gradients of Agreement tool
Dot voting to gauge opinion and progress
Visualizing consequences, relationships, and ideas: Mind mapping
Chapter 12: Strengthening Relationships with Employees and Customers
Improving Well-Being at Work
From happy employees to loyal customers: Creating a ripple effect
R.J. Allen Construction, an example
Recognizing the Consumer as a Change Agent
Keeping an eye out for trends
Chatting up consumers
Reconnecting Business to Customer Service
Bridging the gap to connect to your customers
Getting inside the customer’s head: Empathy mapping
Using social media to obtain feedback
Focusing on what’s important to the customer
Promoting Communication with Customers and Employees
Establishing intention and value
Calculating the benefits of communication
Setting goals for your interactions
Delving into Information-Gathering Methods
Tools and techniques for formal consultation
Establishing informal information-gathering channels
Part IV: Making Decisions in Various Roles
Chapter 13: Becoming a More Effective Decision-Maker
Upping Your Game: Transitioning from Area-Specific to Strategic Decisions
Highlighting strategic decisions
Avoiding the perils of micromanaging
Moving from specializing in one area to working across functions
Displaying Character through Decision-Making
Mirror, mirror, on the wall: Taking a close look at yourself
Using defining moments to build character
Handling yourself when things go wrong
Improving Your Decision-Making by Becoming a Better Leader
Differentiating between leadership and authority
Using your power for good
Being a leader good enough to ask the tough questions
Creating Safe and Stable Workplaces
Adapting your management style
Taking steps to improve the quality of the working environment
Being the leader you expect to see in others
Chapter 14: Making Decisions as a Manager
Recognizing the Changing Role of Manager
Embracing your role as change agent
Adapting your management style
Choosing Your Leadership and Management Styles
Looking at leadership styles
Using authority effectively: Different styles for different situations
Dealing with unmet expectations
Chapter 15: Making Decisions as an Entrepreneur or Small Business Owner
Knowing What Makes You Tick
Identifying your entrepreneurial qualities
Gaining clarity on your values and philosophical foundations
From Flying by the Seat of Your Pants to Putting Systems in Place
Moving from multitasking to building a team
Deciding how work gets done
Staying aware of your decision-making process
Taking Steps When the Thrill is Gone
Step 1: Figuring out what you want
Step 2: Ascertaining where your business is
Key questions when you still can’t decide
Part V: Applying Decision-Making Skills to Specific Challenges
Chapter 16: Using Change to Achieve Personal Fulfillment
Reinventing Yourself after a Setback
Changing your mindset after a setback
Taking the first steps to a new future
Gaining Clarity on Your Passion, Purpose, and Direction
Using a vision board to gain clarity
Testing your commitment to a decision: Visualization
Going my way? Choosing your path
Strengthening Your Resiliency
Assessing the state of your personal spirit
Viewing your whole life as a lesson in leadership
Chapter 17: Facilitating Participatory Decision-Making Meetings
Clarifying Your Role in a Meeting
Distinguishing among facilitating, moderating, and chairing
Letting go of attachment to a specific outcome
Meeting Preparation Basics
Establishing the purpose of the meeting
Identifying reasons to meet
Putting together a bare-bones plan
Choosing a formal or informal meeting structure
Putting Together a Meeting Plan for Complex or High-Stakes Decisions
Step 1: Stating the overall goal and metrics
Step 2: Putting together a framework for the meeting
Step 3: Assigning tasks in preparation for the meeting
Step 4: Structuring the meeting with a meeting plan
Running a Productive Meeting
Getting on the same page with an overview
Keeping the meeting on track: Dealing with group dynamics
Tools to Help You Facilitate and Manage Meetings
Structured round table: A tool for gathering perspectives
Visual and group collaboration tools for meetings
Chapter 18: Making Decisions about Partnerships and Joint Ventures
Understanding the Different Partnership Structures
Looking at partnerships
Examining joint ventures
Determining Mutual Benefit
Thinking through partnership potential
Mapping out gains and value in joint ventures
Assessing the fit
Finalizing the Agreement
Communicating Productively during the Venture
Focusing on trust
Using conflict to advantage
Testing Trust, Courage, and Cooperation When the Going Gets Tough
Chapter 19: Setting Ethical Standards
Defining Business Ethics
Looking at ethics in business
Falling from grace: Unethical business practices
Understanding Pressures That Lead to Unethical Decisions
External pressures: The changing nature of business
Internal pressures: Working conditions and relationships
Eliminating conditions that lead to ethics breaches
Setting Formal and Informal Standards
Developing a formal code of ethics
Establishing an informal code
Common Concerns: Dealing with Supply Chains and Health and Safety
Reducing workplace hazards
Bringing the supply chain up to ethical standards
Part VI: The Part of Tens
Chapter 20: Ten Tips for Decision-Making in Uncertain Situations
Check Assumptions
Stretch Out of Your Comfort Zone
Ask Profound Questions
Learn from the Past
Listen Deeply
Shift Perspectives
Move From Inertia to Action
Pay Attention to What Your Heart Tells You
Embrace the Unpredictable
Work with Risk Differently
Chapter 21: Ten Ways to Improve Decision-Making
Find Your Inner Calm
Know When to Follow Plans and When to Co-create
Keep Your Mind Nimble
Focus on the Mission
Innovate through Disruption
Tap into Your Intuition
Learn from Mistakes
Keep an Open Mind
Balance the Intuitive with the Rational
Pay Attention to the Workplace
Chapter 22: Ten Secrets behind Ethical Decision-Making
Employees Feel Respected and Happy
Relationships Are Built on Trust
The Focus Is on Collective Achievement
The Right Things are Rewarded
Minimum Compliance Isn’t Enough
Good Character is Important
Everyone Leads
Principles and Values Guide Action
Attention Is Given to Workplace Culture
Trust Is the Underlying Value
About the Author
Cheat Sheet
End User License Agreement
Guide
Table of Contents
Begin Reading
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Introduction
Take a look at any company’s results, and you see the effectiveness of its decision-making. One needs only to witness our global issues — such as diminishing biodiversity and lack of employee engagement — to recognize the consequences of past decisions. Expanding decision-making proficiency requires evolving deep perception together with higher awareness at a personal and organizational level. Without being able to see the big picture, decision-makers can’t leverage the invisible forces to achieve prosperity.
As the business environment has changed from being predictable to being uncertain and from being simple to being complex, a transformation is required in how decisions are made, both individually and within organizations. As it redefines its role in society, business must restore trust with its employees and its customers. Personally, professionally, and organizationally, it’s time to gain access to all your creative resources and intelligences so that you can make the decisions you need to, to prime your company for success in this ever-changing world.
In this book, in addition to insights into intuition — a key but often overlooked component of good decision-making — are thoughts and ideas from inspirational business owners, stories of innovative start-ups, and conventional and collaborative tools. Mostly you discover how you can participate in designing both a fresh, rejuvenated world of work and world at large.
About This Book
Day-to-day decision-makers wrestle with information overwhelm and priority setting in dynamic conditions. To top it off, humans are complex beings with lots of hidden and unnoticed biases. Decision-making is clearly both an art and a science.
In Decision-Making For Dummies, I provide both traditional and very innovative approaches to decision-making. I demystify some of the mysteries about intuition, bias, and rational decision-making, while showing you how to take a more intelligent approach to decision-making. For example, probably no other topic generates more diversity of opinion than decision-making, especially when it comes to the role of intuition. Top business schools teach rational decision-making despite research showing it’s not that effective and even though real-world entrepreneurs rely on their intuition backed up by data. You can discover how to use intuition to improve your capacity to perceive situations more accurately and make decisions in dynamic environments and to handle complexity and uncertainty with confidence.
The tools, skills, and perspectives in this book offer ways for decision-makers like you to evolve your decision-making. In so doing, you’ll gain greater confidence in who you are and what you bring to the decision-making process. And if you’re overly confident as a decision-maker, I hope you’ll gain some humility so that you can embrace diverse, seemingly opposing ideas, to become more flexible in your approach.
Nothing in this book is about either-or thinking, and the information I include serves each person differently. Not only will you find information that will help you address the particular decision-making challenges you face in the moment, but you’ll also find information that helps you grow as a decision-maker.
Like all For Dummies books, the material is organized in an easy-to-access structure. Sidebars and paragraphs that accompany a Technical Stuff icon offer tangential information that enriches but isn’t essential to understanding.
I’ve also established a few conventions. First, I differentiate between the brain’s intelligence (its mental/intellectual fitness) and the heart’s intelligence, an idea common in eastern traditions, which holds that the heart’s intelligence is the path to innate knowledge. Second, I use the word intuition to denote your higher intelligence. It is not a mystical power; it is a powerful tool. In this book, I show you the science and the value of intuition.
Finally, you may note that some web addresses break across two lines of text. If you’re reading this book in print and want to visit one of these web pages, simply key in the web address exactly as it appears in the text, pretending as though the line break doesn’t exist. If you’re reading this as an e-book, you’ve got it easy — just click the web address to be taken directly to the web page.
Foolish Assumptions
The biggest assumption I made while I wrote this book is that you want to know how to become a better decision-maker. Some other assumptions I made include the following:
You’ve noticed that the results of current decisions come at a high cost, and you want to minimize the negative consequences of decisions.You recognize the value of self growth and may also yearn for something more than repeating the same cycles over and over.You’re either in business or you fervently care about the role business plays in society and in shaping the world we live in.You feel that your workplace is stymying your or your team’s ability to make good decisions, and you want strategies you can use to create an environment that promotes sound decision-making.Icons Used in This Book
Just like signposts on a road, For Dummies books use icons to point to certain kinds of information. Keep an eye open for these symbols.
This icon points to advice, words of wisdom, and tips that help you choose with greater discretion what is right for your situation.
This signal helps you know what to focus on. It highlights specific and important points to keep in mind.
This icon points out information that, although interesting and insightful, isn’t absolutely necessary to know to become a better decision-maker. Feel free to skip these bits.
Not surprisingly, this icon indicates potential pitfalls, unanticipated dynamics, or responses you might have to deal with during the decision-making process.
I use this icon to highlight the experiences of real companies. Some serve as inspiration; some as lessons in what not to do.
Beyond the Book
In addition to the material in the print or e-book you’re reading right now, this product also comes with some access-anywhere content on the web. Check out the free Cheat Sheet at www.dummies.com/cheatsheet/decisionmaking for advice on how to communicate a decision, pointers for sorting through a sea of data to get the information that can help you make a good decision, and more. In addition, I’ve provided lots of bonus material at http://www.dummies.com/extras/decisionmaking that goes beyond the content in both the print and e-books.
Where to Go from Here
The beauty about a For Dummies book is that it is completely intuitive. Head to the pages you need when you need them and trust your instincts to guide you. Take a look at the Table of Contents for general topics or the index for more specific content. Head to a chapter that appeals to you (maybe you’re curious how to communicate a decision you think will be unpopular), and then find a chapter that includes information you’re skeptical about (intuition and decision-making — aren’t those two things mutually exclusive?). Why take this approach? For two reasons: First, sticking to familiarity is the enemy of sound decision-making; this give you a chance to jolt your own thinking voluntarily. Second, whatever you read, you’ll find detailed information that you can apply to your decision-making today.
Apply what you read and see what happens. Becoming a better, more effective decision-maker starts one decision at a time, as does transforming your business to meet the needs of the new, interconnected world we all live in.
You can also find more information in a few other For Dummies business books, including Leading Business Change For Dummies, by Christina Tangora Schlachter and Terry Hildebrandt; Leadership For Dummies, by John Marrin; Emotional Intelligence For Dummies, by Steven Stein; and The Leadership Brain For Dummies, by Marilee Sprenger — all published by John Wiley & Sons, Inc. None of these books is required, but all offer supplemental tools, skills, and views that can promote your growth as a decision-maker.
Find me on LinkedIn (http://ca.linkedin.com/in/dawnahjones/) or register at http://www.frominsighttoaction.com/decision-making-for-dummies/ to gain access to decision-making support.
Part I
Getting Started with Decision-Making
Visit www.dummies.com for great Dummies content online.
In this part …
Find out how global and societal shifts are changing the way decisions are made, resulting in seemingly simple decisions being infinitely more complex than you may have previously thoughtDifferentiate between strategic, tactical, and operational decisionsImprove your decision-making by developing higher levels of personal and organizational awarenessLearn how workplace environment and company structure affect decisionsFoster an environment that leads to high-quality decisionsChapter 1
Big-Picture Pressures on Decision-Makers
In This Chapter
Identifying the forces putting pressure on decision-makers
Working in a complex, uncertain decision-making environment
Restoring ethical integrity to business
Designing business cultures to make better decisions
Decisions are being made all the time, every minute of every day, and most of them are made automatically, without much intentional thought. Subtle yet pervasive forces influence the accuracy of every decision. Most decision-makers aren’t aware of these forces, yet their impact has huge consequences on company fortunes and people’s lives. With each decision, small or big, that you and I make, we shape the experience of life and, more boldly, the design of the world.
In this chapter, I show you how big-picture pressures are forcing business decision-makers to engage in higher-order thinking, to see things from multiple perspectives, and to embrace rather than fear uncertainty and complexity. More importantly, you discover how adapting to these changes lets you become a leader who is purpose-driven — someone who leads by example, inspires confidence in his or her employees, and creates a working environment that is healthier and gets everyone working together toward success.
Making Decisions in an Ever-Changing World
Although believing that your situation or your company’s fortunes are beyond your control may be easier than facing the alternative, the truth is that experiences — yours or your company’s — are shaped by the moment-to-moment decisions. Unfortunately, in business, many of those decisions are made under duress because the fires you have to fight every day can distract you from seeing the situation from a different perspective. When you’re under pressure, routines — even inefficient ones — can feel like a lifeline.
To move forward, you need to step back from those routine patterns so that you can gain insight and see the opportunities you’ve been overlooking.
The ground shifting beneath your feet
Your beliefs guide what questions you ask when you assess a new situation and how you view the information you uncover. They also act as a filter for the ideas that inform your reality. In business and in life, dismissing what doesn’t fit is natural. But in the end, it also makes you resistant to change. After all, you can’t change what you can’t see.
In this section, I outline the big-picture trends impacting businesses today, explain how traditional beliefs about how business is done collide with today’s reality, and show you what it means to you as a decision-maker so that you can select which beliefs to keep and which to change.
The reliance on intelligence rather than force
The first big shift is the growing reliance on intelligence (engaging in a higher-order thinking) rather than force (surviving at any cost) when working with natural resources and human potential. According to the old mindset, resources are unlimited, and waste is considered acceptable, despite the inefficiencies. Because nature’s contribution to the economy is difficult to count, the best solution is to leave it out or dismiss it as an externality. The new mindset says that nature’s resources can’t be counted, but they do count.
The error of the old way of thinking is becoming more evident. One 1997 estimate calculated nature’s annual contribution to the economy at $33 USD trillion!
Companies that value nature’s contribution are far more profitable than those that do not. A fast-growing number of start-ups and private and semi-private companies in many sectors — even beyond the more obvious sectors like clean technology — readily grasp this concept and are growing rapidly. Global companies such as Novo Nordisk (http://www.novonordisk.com), Canon (http://www.canon.com), and Unilever (http://www.unilever.com) are examples. Non-profit B-Lab (http://www.bcorporation.net/what-are-b-corps/the-non-profit-behind-b-corps) has certified over 1,000 companies as B-Corps in 33 countries. B-Corps must pass rigorous social and environmental performance standards to provide consumers with transparent reporting. You’ll find those companies listed at http://www.bcorporation.net.
The rise of professional networks within and beyond a company’s borders
The second big shift affects how employees are viewed. Today, business performance is powered by professional networks that exist both within and beyond a company’s boundaries. These professional networks, which are engaged in achieving a shared goal, extend well beyond the control of internal management and, as a result, require a shift in management style. With technology as a major disruptor of how work gets done, work between colleagues around the globe can now easily take place collaboratively in a flash via a Google hangout, a Skype call, or a custom app on your mobile device.
The old belief that employees are replaceable and have to be constantly told what to do is giving way to the belief that people are knowledgeable and want to contribute their talent. The growing movement for creating great work environments — places that tap people’s potential and creativity, invite and honor their contributions, respect and value them as people, and count social and environmental health as essential — is a natural outcome of the understanding that good decisions and great work comes from engaged employees who work well together and feel good about their accomplishments. Ethical decisions are a natural result of a healthy workplace. Double bonus!
When workplace and management conditions make it difficult, if not impossible, for employees to contribute meaningfully, their talent is repressed as they are forced to fit into preconceived roles, a situation that creates stress-related illnesses that cost companies in the U.S. $300 billion annually. Unfortunately, workplaces have been slow to adjust, as employee disengagement statistics show. Yet as leadership skills become deeper and more universal (Chapter 13 tells you how to develop these skills), workplace health and — ultimately — workplace decisions will improve.
The changing perception of business’s role
The third big shift is the changing perception of business’s role. The traditional view has been that business’s sole purpose is to be an economic engine, to make money. The new perspective is that business is an integral part of society and a subset of the larger ecological system and that it can be a force for good. This purpose can be achieved when companies engage their employees in a higher purpose, one that goes beyond mere profit.
This shift has occurred largely due to the size of the issues demanding solutions, coupled with a deep yearning for meaning and purpose. Addressing these issues demands imagination, collaboration, and the highest level of inspired innovation ever achieved by humanity. In this climate, business as usual isn’t an option.
The old way of doing things promotes “either/or” thinking: either profit or doing good (service); either the environment or the economy. This kind of mindset limits companies’ capacity to spot opportunities to adapt to the emerging new realities. So don’t think in “either/or” terms. Instead, insert the word and: profit and doing good; the environment and the economy. See how this little tweak enables you to broaden your thinking?
Companies that recognize they are part of society and have, in addition to their money-making role, a responsibility to the environment, their communities, and so on, are more profitable. Their relationships with employees and customers is genuine and trustworthy; they look after the environment because it is the right and smart thing to do, and they find creative ways to embed social and environmental responsibility into profit-making endeavors. Their comfort with working in unpredictable, complex situations gives them the edge.
The rise of social media
A change in the way people communicate and access information brings us to the fourth big shift. Social media and mobile technology is changing how consumers and employees acquire information and make their career or consumer purchases. In short, current technology makes it extremely easy to get information quickly across political and geographic boundaries. The effect is to broaden perspective.
Before social media and modern technology, businesses followed a model in which they produced products (or services) and then coerced customers to buy. The goal was to do whatever it took to compete and win. Today, however, social media and global connectivity enable the consumer to quickly hold companies accountable for the consequences of their decisions.
In this way, consumers are now change agents. They select which companies to support, using apps, like Buycott (http://www.buycott.com), which allow them to buy products that reflect their principles, and they give their loyalty to companies whose ethics and values align with their own. (Buycott is pretty neat: To use the app, you scan a product, and the app tells you which company is behind the brand and cross references this information with causes you’ve identified as important.)
It’s not likely that social media or technology will save civilization, but business owners can use it as a tool to restore transparency and trust in business practices and decisions. You can use it to connect with your customers and employees, build and burnish your brand reputation, and promote customer service by providing meaningful customer interactions and responses to customer comments.
Businesses aren’t the only ones who need to be careful about the reach of social media. Aspiring employees need to be aware, too. Recruiters and prospective employers often take a look at Facebook pages to see who their applicants really are. Status reports announcing how you blew off an appointment because the sun was shining, as one person did, get you blacklisted by top recruiters.
The need of employees to do work that matters
The fifth big shift in the business environment is away from doing work solely to achieve financial security to doing work that matters. This shift challenges the old idea that employees are an asset not much different from other line items on the budget and will do what you tell them out of fear of losing their jobs.
Instead, employees (and customers) today want to be agents for change. They’re no longer trapped in workplaces that don’t work; they can work anywhere and do rewarding work they love. They move jobs, change careers, and start their own businesses. Younger generations in particular easily adapt, inherently believing that they can accomplish any goal; they want a job that will enable them to be true to their values and to be able to, as one put it, “take my whole self to work.” Companies that acknowledge this shift seek to engage employees and remove built-in corporate cultural barriers that obstruct collaboration or innovation.
A 2013 survey conducted by Aspire, a company that provides executive coaching and development for women, found that 78 percent of female corporate professionals are not setting their sights on the boardroom; instead, they’re considering leaving their current positions to start their own companies.
Assessing what these changes mean to you
As the preceding sections make clear, the business decision-making environment has changed. Adhering to a “business as usual” model won’t get you the results it used to. If your company is to adapt to a new business climate, how you make decisions must change to reflect the new realities. Consider the following:
Making changes in the supervisory role: The role of managers is moving from a model in which the boss controls individual and team performance to a model in which the boss’s role is to enable and support teams that self-organize to achieve a shared goal. In this new world, bosses must display a higher level of leadership: You must know how and when to step back, you must stay curious and be able to foster curiosity and creativity in your employees, and you must be committed to removing procedures and processes that block teamwork.Changing the way you work with employees: Decision-makers must embrace a collaborative style of working with employees. Collaboration frees up knowledge and talent in a way that facilitates creativity and problem-solving. When presented with a goal or a problem, for example, collaborative teams aren’t hemmed in by a rigid process; instead, they can adapt and adjust, as necessary, to dynamic situations.Embracing a collaborative work style requires a change in mindset regarding your relationship with your employees and how power should be used. Rather than wielding power and control over your employees, you’ll work with them. You’ll also place more trust in yourself and others, based on a genuine conviction that people want to bring their best selves to life, and it’s your job to bring out the best in them. In doing so, you will also discover hidden talents and achieve personal fulfillment as well.
Improving the way you manage risk: Those making the switch away from traditional management roles are better able to manage risk exposure. Being aware that bigger forces are at work gives you the edge and ability to adjust.If you rely on a command-and-control management style, you can easily become complacent. After all, someone who thinks he’s in control usually doesn’t know when he’s lost it. Market trends and upstart companies with different approaches can fundamentally change the business environment and leave you and your company foundering.
A great resource for ways to integrate smart practices into every aspect of your company is the book Embedded Sustainability: The Next Big Competitive Advantage, by Chris Laszlo and Nadya Zhexembayeva (Stanford Business Books).
Embracing Uncertainty and Unpredictability
Humans tend to be apprehensive about — and some outright fear — uncertainty. Yet uncertainty is often the catalyst that lets you expand your leadership skills, broaden your business thinking, and improve your decision-making. Whether you embrace uncertainty or try to hide from it, one thing is for sure: The business decision-making environment has changed. It is more complex, unpredictable, and ambiguous than ever before. In this section, I share a few things you can do to make dealing with uncertainty easier.
The acronym VUCA encapsulates the new operating conditions for life and business: volatility, uncertainty, complexity, and ambiguity. Accepting this different reality gives you your edge. Rather than avoiding change, you can stretch into higher potential.
Increase integrity and truth-telling
Combine changing societal values with the connectivity made possible by social media, and consumers and customers are able to hold you and your company accountable in ways that were nearly impossible just 25 years ago. As a result, businesses must be honest, come clean when mistakes are made, and work to earn the trust of not only their customers but also the communities in which they do business.
Notice what is happening on the innovative edges
Being in business today means being on your toes all the time! If you’re feeling content and pretty secure, chances are you’re looking for threats in familiar places — and not where they truly exist. Innovative start-ups — not your traditional competitors — are the ones who can change the terrain overnight.
If you’re looking for innovative approaches to management or information on bossless organizations, check out the following:
The Self-Management Institute (www.self-managementinstitute.org): It has practical tools for running flat (that is, no management layers), self-organizing companies.Cocoon Projects in Italy (http://www.cocoonprojects.com): It has come up with an innovative way to account for value created by each contributor (there are no job interviews) and to calculate value-added among peers. Cofounder Stelio Verzera’s article, which describes Cocoon Projects’ philosophy, was awarded the Digital Freedom Award by the Management Innovation exchange (http://www.mixprize.org/hack/liquid-organizations-realizing-next-evolutionary-stage-anti-fragility?challenge=18606). To learn more about Liquid Organizations, see http://www.liquidorganization.info.Don’t limit planning to an annual task
Annual planning worked when business environments were more predictable. Today, committing to a year-long plan that ignores changing conditions in the meantime is a fairly high-risk strategy. If your decision-making process is based on old business beliefs, you’ll feel stressed out and under pressure right now. Unless your business beliefs have undergone a radical tune up in the last six months, you’re behind. One option, for example, is to adopt a Lean/Agile (software development) principled approach to change, which uses client/customer feedback and responds to changing circumstances.
Make your decision-making process values-based
Upgrade your decision-making process so that it is value-based. In this model, your company must be clear about what its values are and then make every decision in alignment with those values. Values used for decision-making aren’t the glossy ones from the poster pinned to the wall. They declare what is important enough to guide your decision-making and direct how things get done. To discover the difference between belief-based and values-based decision-making, head to Chapter 5.
Cultivate learning and curiosity
Organizations that cultivate learning and curiosity as core skills tend to exhibit these characteristics:
They’re flexible. Learning organizations aren’t fixed on concrete thinking, which is a sure-fire way to prevent better decision-making.They recognize that mistakes are part of the learning process. Instead of fear-based decision-making, in which judgments tend to center on what someone should have or could have done, the focus is forward-looking.They use curiosity to open doors to new ideas. Curiosity is a critical core skill in a complex decision-making environment because the complexities don’t show up until the problem you thought you’d solved returns with a vengeance! In companies that don’t embrace curiosity, employees and teams tend to dismiss inconsistencies, even though inconsistencies actually point to things that should be explored to find out what is happening.Invest in your personal and professional growth
You are the most important part of the equation. The difference between a successful business, one that can adapt to emerging new realities, and an unsuccessful one is your leadership. Do you want to have 12 years of experience, or 1 year of experience 12 times? The beauty of personal growth is that, when facing adverse conditions, you can become more creative.
Developing yourself as a decision-maker gives you increased capacity to regulate and use your emotions as information, to make better decisions under pressure, to understand how your intuition operates and to use it to your advantage, and to expand your thinking so that you can anticipate unintended consequences early on.
Raising the Integrity and Ethics of Business Decisions
Although many companies know their markets, care about their customers, and pay attention to doing what is right for all, a few companies have lost the public trust because of their reckless decision-making governed by self-interest. Often the difference between good companies and bad ones comes down to ethics, the moral code of conduct that underpins ethical decision-making.
The public has very little tolerance for unethical behavior: corporate decisions and actions that do more harm than good; that place self-interest over the interests of the communities in which they operate, the environment, or their employees; and that unfairly skew the distribution of wealth. Ultimately, running a company unethically leads to unhealthy workplaces, seriously compromised decision-making, lower profits, and failure.
Ethical companies, on the other hand — those that serve communities, care about their workers, care for the environment, and don’t succumb to narrow and short-sighted thinking — will ultimately supplant their unethical competitors. Restoring trust with employees, customers, and society as a whole starts with recognizing the wisdom behind using business as a force for good. In this section, I explain what ethical decision-making is and why it’s good for business. Chapter 19 delves into the topic in more detail.
Overcoming factors that lead to unethical decisions
Although some business decision-makers are unscrupulous, most don’t start out with the intention to make unethical decisions, but they make them nonetheless. So if the problem isn’t intent, what is it? As I explain in this section, unethical decisions can be a consequence of skewed or narrow thinking, on-the-job pressures, and other factors that you probably don’t realize set the stage for ethical transgressions. Read on to discover what factors often lead to unethical decisions and what you can do about them.
Having too narrow a focus
When the focus is too narrow, you pay more attention to the short term rather than the long term, or you’re more committed to meeting financial goals than delighting your customers.
Seeing the big picture is an integral part of making ethical decisions. When you step back, you gain new and wider perspective that can reveal patterns that you may not have noticed before. This broader perspective enables you to see connections between what before may have seemed to be unrelated entities and, as a result, consider the far-reaching implications of your decisions. You can also see familiar patterns that may indicate that your decision-making is going around in circles and not really producing the change or benefit you were hoping for.
Not linking your decisions to your values
Ethical decision-making is rooted in the capacity to anchor decision-making to your values. Doing so lets you know what’s important when things seem uncertain, and it gives you a standard by which to judge the outcome of the decisions you make. Values-based decision-making is different from decision-making based on beliefs or assumptions, a topic I discuss in more detail in Chapter 5.
Succumbing to workplace pressures
When intense pressure to achieve targets exists, people are tempted to take shortcuts that can compromise standards. To counter this, step back to discover the source of the pressure and identify where knee-jerk reactions to demands have hijacked a more intentional approach to decision-making. Also try to balance short-term thinking with long-term vision and goals. When you include the long term in your decision-making, you tend to make better decisions because you’re applying a broader perspective to the problem.
Making assumptions
When the information underpinning the decision is too limited, you find yourself making assumptions. To counter this tendency, engage customers and employees as active participants in your company’s decision-making. Doing so broadens the information available for decision-making. As a bonus, it also bolsters your company’s value because of the loyal and committed relationships you develop. In addition, making information available and transparent within the company reduces the inclination to make assumptions or act on speculation.
A great way to gain insight is to give airtime to employee ideas that don’t fit the norm. Gary Klein, author of Seeing What Others Don’t: The Remarkable Ways We Gain Insights (PublicAffairs), calls these outlier beliefs: They’re important beliefs that are not firmly supported by current thinking.
Using the wrong metrics to judge success
The criteria you use to evaluate success has a direct bearing on what you and your employees pay attention to. Yet as important as it is to measure the right things, many managers and companies unwittingly use metrics that measure the wrong things, are at odds with the company’s stated mission, and, in the worst cases, foster unethical behavior. If, for example, you reward employees only for making budget targets, they may postpone or avoid doing things like updating equipment for safety — a decision that could lead to injuries or death.
To determine whether the metrics you’ve put in place are creating an environment that promotes breaches of ethics, monitor the consequences of decisions. One way is to map key decisions so that you can see the results and consequences. By taking this step proactively, you’ll be able to correct a course of action before it’s too late. In Chapter 19, I share how to set ethical standards and create an environment that brings out the best in your employees.
Designing a healthy decision-making environment
If you look back on the best and worst decisions you’ve ever made, you’ll probably discover the same thing I did: People don’t make the best decisions in stressful circumstances. But stressful conditions happen all the time, you say.
There’s a difference between a stressful event that must be addressed or resolved (equipment breakdown on your production line is jeopardizing your being able to complete or ship a big order to an important customer, for example) and the stress caused by being in a work environment — often characterized by unreasonable workloads, unsupportive managers, excessively long work days, and so on — that puts employees on high alert 24/7 with no end in sight.
In this type of workplace environment, the stage is set for poor decision-making. Inherent to making good decisions is designing the workplace that supports better decision-making. This means converting unhealthy workplaces into healthy ones. Healthy decision-making environments have common characteristics. Here are a few of them:
They instill a sense of belonging and community among coworkers.The relationships are professional, and the company’s purpose is front and center.Shared values underpin what is important to the company and its employees, and these values anchor decision-making in both good and tough times.Leaders exist at every level, decision-making is decentralized, and decision-making processes are in place. Employees at every level take personal responsibility for making decisions and accepting the consequences.Communication is open and honest, even when the news isn’t good, and any issues are brought forward through informal and formal feedback loops so that adjustments can be made without delay.Learning — even learning from mistakes — is valued, which, in addition to strengthening the organization’s decision-making, makes it more adaptive and resilient in uncertain and changing conditions.Complexity and uncertainty are valued, and decision-making isn’t driven by the fear of losing control. Instead, decision-makers engage their and others’ creativity to actively respond to new challenges.A company with a healthy decision-making environment is the kind of company that creates value through its relationships with employees, customers, suppliers, and stakeholders. Rather than being too big to fail, it is too valuable to fail. In Chapter 2, I show you how to set up a company for effective decision-making. In Chapter 12, I show you how to strengthen internal and external relationships, and in Chapter 19 I explain how to upgrade your company’s culture to support ethical decision-making. Restoring trust and ethical integrity in business is the way in which your business can do business more intelligently and intuitively and become a force for good.
Chapter 2
The Key Ingredients for Effective Decisions
In This Chapter
Sorting out different kinds of decisions
Recognizing how you make decisions
Paying attention to the influence of workplace culture on decisions
Decision-making is rarely logical, despite assertions that it’s based on rational thinking. Different ideas don’t have a chance when they fail to fit into what decision-makers believe will or won’t work. Just ask anyone who has ever put together a perfectly good proposal on how to increase profitability only to have the proposal shot down. Nor can innovation take place when decision-makers are unaware of how thinking influences perspective or risk perception.
Knowing what is going on under the surface drives results and gives you a chance to improve and adjust. In this chapter, I introduce you to decision-making styles and discuss what the rational mind can’t see when it comes to risk perception. I also show you the three key elements that make decisions effective: a common language, the workplace culture, and your self-knowledge.
Distinguishing the Different Kinds of Decisions
The kinds of decisions you face fall anywhere on a spectrum from strategic to operational/frontline. If you’re a small business owner — until you add staff and distribute responsibility, that is — you make decisions across the full spectrum. If you’re in a medium-sized to large company, the kinds of decisions you face depend on how your organization distributes decision-making authority and responsibility: centralized at the top or decentralized through all levels, for example. In addition, the type of decisions you’re responsible for depends on your role in the company. In this section, I describe the different kinds of business decisions. Each kind of decision calls for a different kind of thinking and decision-making style.
Traditionally, big companies are organized hierarchically, with authority allocated at each level of management down to the front line. In theory, direction comes from the top and moves down through the company for implementation. The speed and complexity of the business environment challenges this way of assigning decision-making power because it is slow. Still, this is the prevalent organizational style; even medium-sized companies lean toward using the combination of hierarchy and authority. For that reason, in this section, I lay out ways that decisions are typically thought or talked about. Different organizational structures and sources may use different terminology.
Strategic decisions
Strategic decisions are executive-level decisions. Strategic decisions are made in every area, from IT (information technology), HR (human resources), finance, and CRM (customer relations), for example. Strategic decisions look ahead to the longer term and direct the company to its destiny. They tend to be high risk and high stakes. They are complex and rely on intuition supported by information based on analysis and experience. When you face a strategic decision, you may have time to consider options reinforced by the gathered information, or you may have moments to decide.
To make good strategic-level decisions, you need to be comfortable working with a lot of information and have the ability to see the interrelationships among the company and its employees, clients, suppliers, and the communities it reaches. You need to be collaborative, in touch with what is going on, open-minded, and flexible without being wishy-washy. You can read more about the decision-making process for strategic decisions in Chapter 10 and more about what you rely on as a decision-maker in Chapter 13.
Yahoo’s CEO Marissa Mayer created a strategic plan to foster the company’s renewal: Knowing that each was interrelated, Mayer focused on people, then product, then site traffic, and then revenue. She began by hiring great people and taking steps to stop talented Yahoo employees from going to other companies. She then bought companies to strengthen the Yahoo product, knowing that a strong product keeps employees, builds traffic, and generates revenue.
Tactical decisions
Tactical decisions translate strategic decisions into action. Tactical decisions are more straightforward and less complex than strategic-level decisions. When they are in alignment with your company’s core values or its overall mission, tactical decisions add even more value to the outcomes of the implementation. Conversely, if tactical decisions become detached from the company’s direction, you and your employees end up expending a lot of effort on tasks that don’t help the company achieve its goals or vision.
Tactical decisions fall in the scope of middle management. Middle managers are the proverbial meat in the sandwich; they make things happen. In vertically organized hierarchies, middle managers translate top-level decisions into goals that can be operationalized. You can read more about making decisions as a manager in Chapter 14.
Operational and frontline decisions
Operational and frontline decisions are made daily. Many operational decisions are guided by company procedures and processes, which help new employees get up to speed and serve as a backdrop for more experienced employees, who, having mastered the current procedures and processes, can detect and rapidly collate additional information, like cues, patterns, and sensory data, that aren’t covered by the procedures. Take mechanics, for example: A master mechanic is able to apply procedures and specifications to fix a problem, and his accumulated experiences (and intuition) strengthen his troubleshooting abilities. Detecting subtleties is an intuitive intelligence. The effect is faster and more accurate diagnosis or assessment of a particular situation.
