Decision Behaviour: The key to unlocking the modern business

While we marvel at the speed of technological advancement, the way leaders make business-critical choices has, by and large, stayed the same. Indeed, decision-making remains as much a behavioural science as an information science, often driven by factors that even the best information cannot solve.

There is a view that providing CEOs with better information and dozens of different options, often supported by complex and expensive technology, will make them more engaged whilst making significantly more and better decisions. While technically correct, experience has shown that the reality is often very different.

The challenge is behaviour. While non-emotional information can speak for itself, it is our behaviour as leaders that influences the way we digest data and drive decisions. In a world where leadership culture still influences the way an organisation behaves, it is not surprising to see that it is executive behaviour that ultimately dictates the way information is prepared and presented.

One of the key issues we see is the impact of ambition. Often leaders want information articulated in their own best interests, with plans and options to meet pre agreed targets and outcomes. And
when this is not the case, they push back, disengage, or ask for endless reworks. The challenge is that if our plans are based on the latest realistic view that does not meet this ambition, then the maturity of executive response is critical to drive the right conversation.

By extension, if you are going to create an environment where anecdotes and research holds equal weight for decisions, then the message being sent out is that it doesn’t make a difference how much effort those who want a CEO’s attention put in, as they think leaders will only listen to their closest and most trusted allies. In this environment, informal opinions can destroy information faster than any tool, system, or process. And if leaders do not respect the process that generates the information, or the resulting decisions, then the morale of those working hard to maintain complex solutions is also impacted.

Linked to this is the infrastructure for decision-making. It is as much about building formality in the way we engage as leaders as it is about the information we share. Understanding how and where we make key decisions, how we need to prepare information, and how we facilitate this for accuracy and relevance is as important as the actual information itself.

Inverting the pyramid of empowerment

More than ever, businesses must invert the pyramid of empowerment. CEOs should be working out how to allow others to make more decisions in a safe environment so that they, as leaders, can focus on only the most important calls. True empowerment is making one decision so that others can make their own decisions in safety. There is a subtle difference between that situation and what most people think they should do to empower others.

For instance, a parent can say that if their teenage child returns home by midnight, they can do what they want before that time. That is empowerment. The teen can make 100 decisions themself, so long as they respect the curfew. But if the parent starts to dictate that their child must take an Uber ride to McDonald’s and go out with certain friends, it establishes new control boundaries.

Ultimately, this approach is counter-productive and damaging in the long term. It limits the development of the child, who must be allowed to earn trust, build resilience, and make better decisions for themselves. And similarly, the parent will find it even harder to let go of that control and risk their teenager not nearly fulfilling their potential.

Using another topical example and one more relevant to a business setting, CEOs should make and communicate a catch all decision on how the company should use AI. A successful leader will be clear about the boundaries of an AI strategy. How should – and shouldn’t – AI be used, so the rest of the business can optimise operations?

If every decision beyond a certain level needs to be escalated up the leadership chain, then there will be bottlenecks, and progress – and momentum – will be halted.

Unnecessary bottlenecks

More than that, inadequate empowerment, so everyone feels they need to seek high-level approval for every tiny thing, fosters a culture of inefficiency. Just think about the people that copy their boss into emails, just as a kind of insurance policy. It’s a waste of time for everyone – which leader or manager wants a clogged-up inbox filled by lower level communications?

Bottlenecks will cause employee frustration to fester. That growing dissatisfaction will be targeted towards the person or people at the top who are, directly or indirectly, slowing everything down. At a time when the attraction and retention of top talent are paramount to business success and growth, this poor employee experience and lack of empowerment and autonomy will cause long-term issues.

Indeed, in 2023, businesses have to be agile to navigate around any obstacles that are in the way, planned or not. Delays will be costly in more ways than one. If events of the last three years have taught us anything, though, technology has allowed a move away from a command-and control leadership system.

Whichever approach is taken by a CEO boils down to trust. There is a big difference between believing you are the best person to make every decision and building mutual trust and respect with your people by letting them make decisions. By providing the right tools, boundaries, and authority, they will likely make good decisions most of the time. But if a CEO does not trust what is placed in front of them, then that uncertainty will permeate the organisation.

Insight and foresight

Alternatively, a CEO that offers clear leadership and delegates decisions will win the trust of those around them. They will appear strong compared to a CEO who looks vulnerable through their micromanagement and meddling.

Again, it comes back to behaviour as a CEO. If your behaviour is “understand and focus”, the organisation’s behaviour will be “prepare and present”. If you look everywhere and at everything, then the organisational behaviour will mirror that, so panicky people will be ready with all information before every meeting. There is nothing more destructive in an organisation than a CEO who
wants to double-check each little thing. It’s shocking and worrying how many leaders still spend their time overanalysing details irrelevant to the business’s future.

At Oliver Wight, we advise CEOs to look into the business’s future – one, two, or even three years ahead – to understand what needs to change to drive their strategy. Obsessing about delivering
results for the current quarter is not helpful and draws others into a myopic mindset and space.

The best CEOs will be able to delegate decisions well and focus on the future – not with a crystal ball, but in a curious way to manage today’s reality and work out what needs to happen for a better tomorrow. Then, using that insight and foresight, they will understand where the business needs to be, where it is now, and what needs to evolve to take it from one to the other.