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Why leaders make poor decisions

All leaders make poor decisions from time to time. Usually, they are relatively small and insignificant. However, writing for CEO.com, Jack Zenger and Joseph Folkman discuss the bad decisions leaders make that have a “titanic impact”.

So what’s to blame for these bad calls? The authors comment: “Two knee-jerk rationalisations for poor decision making are that we were under severe time pressure or that we didn’t have access to all the important information (unless we are explaining this decision to our boss and then it is often someone else’s fault).”

However, to get to grips with the root cause of bad calls, Zenger and Folkman looked at data from over 50,000 leaders and compared those who were perceived as making poor decisions with those perceived as making very good decisions. They identified a set of behaviours showing the highest level of statistical difference, did a factor analysis and then grouped the behaviours responsible for poor decisions into three categories:

1) Indecision and lack of confidence. In many cases, indecision is worse than making the wrong decision, insist the authors. It leads to people becoming “locked in the past”, relying on the data and processes they’ve always used.

“People get used to processes and approaches that worked in the past and tend not to look for newer or improved approaches that work better,” comment Zenger and Folkman.

The best decision makers act swiftly and with confidence. Although they are happy to make decisions independently, they make use of the input of others when necessary.

2) Unclear vision. Poor decisions can result from a failure to connect problems to the overall goal, say the authors. A clear strategy is needed to provide context and allow solutions to become clear.

However, a clear vision cannot always be developed in isolation, warn Zenger and Folkman. For key decisions, it’s important to involve others with the necessary knowledge, expertise and experience. Too many leaders are reluctant to get others on board in the process because they don’t want to share the credit for a good call, observe the authors.

3) Lack of knowledge and poor communication. If you don’t have the necessary knowledge or technical expertise, you won’t be able to tell the difference between a great decision and a terrible one. You need the technical depth to anticipate the implications of your decisions. If you don’t have it, it’s your responsibility to acquire it or get the help of someone who does have it.

However, Zenger and Folkman warn that “even if you are the most brilliant individual in your field and trust your instinct, if you don’t communicate the what, where, when and how of the decision, then it will fail”. A good decision can become a bad one if people don’t understand it or know how it will affect them. Communicating a decision, its implications and the changes it will bring is essential to its successful implementation.

Source
Jack Zenger and Joseph Folkman