The real challenge is not just what to do, but how to do it and how to get others to engage and participate. The latter demands leadership. The majority of good decisions fail at the point of execution. Good decisions are meaningless if CEOs can’t lead their organizations and convert decisions into actions and results. CEOs are in the business of making decisions. It is their primary purpose—their raison d’être. But just because they have the right to make decisions, doesn’t mean their decisions are always right. Every CEO can define their tenure by a handful of key decisions that contributed to the success of their organization—or its stagnation and failure.
Often, how the CEO arrived at the decision is as good a predictor of their success as the decision itself. Not all decisions require exhaustive analysis or detailed staff research. However, as decisions increase in importance, decision-making has broader, longer-term implications for the organization. Choosing the wrong vendor for office supplies can be remediated quickly and with minimal disruption, but choosing the wrong customer management system can waste valuable investment capital, demotivate employees and be a drag on company performance for years.
Simultaneously, as decisions become more important, they grow in complexity, with more factors to consider, unknowns to explore, and people to involve. Complexity adds uncertainty to any decision. Assumptions and predictions fill gaps that data and analysis can’t. The unknown remains unknown as the CEO is limited to their experience and that of their team. This often forces the CEO out of their comfort zone, injecting more risk and uncertainty into the equation. Complexity challenges the limits of knowledge and tests the CEO’s ability to learn and apply new ideas.
Time also plays a factor in decision-making. Some decisions, regardless of importance or complexity, need to be made immediately, and “no decision” is not an option. With the pressure on and the clock ticking, the CEO must make a choice supported by partial analysis, incomplete data and limited input. Other scenarios allow plenty of time for more thought, deeper scrutiny and a broader range of inputs. However, time can also allow analysis paralysis, data overload and undue influence from external forces to creep in. In the end, whether there is too little time or too much, the decision must be made, and the CEO is the one to make it.
Decision-making is hard. Sifting through the alternatives, weighing the trade-offs and accepting the risk are all part of the game. Moreover, the unknown and everchanging business climate can make decision-making seem like a roll of the dice on the best of days. And yet, it is the decision-making skill that separates those CEOs and organizations who thrive in all economic conditions from those who stagnate or fail even in the best of times.