In these uncertain times leaders must make big decisions fast, write Andrea Alexander, Aaron De Smet and Leigh Weiss for McKinsey & Company.
The Covid-19 pandemic has caused what Andrea Alexander, Aaron De Smet and Leigh Weiss refer to as “a crisis of uncertainty”. You will be faced with a “potentially paralysing volume” of high-stakes decisions (“big bets”). You must make these decisions fast.
“Postponing decisions to wait for more information might make sense during business as usual,” write Alexander, De Smet and Weiss. “But when the environment is uncertain – and defined by urgency and imperfect information – waiting to decide is a decision in itself.”
In order to make good decisions quickly, follow these five principles.
1) Take a breath. As the saying goes, “More haste, less speed.” Rushing from one urgent task to the next without a pause will result in chaos and confusion. Research shows that pausing, even for less than a second, will allow you to focus on what is most important.
What is most important? What might we be missing? How are things likely to unfold and what can we do now that will pay off later?
2) Involve more people. Reject the “hierarchical model”. Clarify the decisions to be made and involve as many stakeholders as possible in the decision-making process. This will ensure buy-in and help avoid confusion.
Try the “fishbowl model”. Call a meeting – likely to be virtual in the current situation – with two decision-makers, multiple experts and two “empty seats” at the table. Invite multiple stakeholders to observe; these stakeholders can rotate into the empty seat should they have anything useful to contribute.
3) Make the critical small choices. In the current situation apparently small decisions could have big consequences. For example, Netflix’s decision, early in the coronavirus crisis, to switch to lower-resolution screening in some locations could have prevented the internet crashing further down the line.
Make a list of possible future scenarios and decisions you could potentially make today that could make a difference later. Involve multiple stakeholders in this process.
4) Set up a nerve centre. Defined by Alexander, De Smet and Weiss as “a network of cross-functional teams”,a “nerve centre” should be set up ASAP. Each of these teams should focus on a specific area, e.g. supply chain, customer engagement or financial stress-testing. “There is a central team that keeps everyone coordinated and ensures collaboration and transparency.”
5) Empower leaders with judgement and character. When choosing your decision makers, do not go for the “usual suspects”. Pick leaders that are curious, flexible and willing to make decisions in the interests of the company, not their own careers – even if these decisions make them unpopular.
GO BIG OR GO HOME
Be bold. “Unprecedented crises demand unprecedented actions,” write Alexander, De Smet and Weiss.