Arguably, effective decision-making is studied far more than it's being used.
Too often we focus on the content (the “what”) of the decision but neglect the process (the “how”) we will use to reach the best decision given the circumstances.
There are best practices for making decisions, but most of the time they are either ignored or, worse, the practice chosen is inappropriate for the situation at hand.
In other words - if you only have a hammer then everything looks like a nail!
For example, “Why Teams Don’t Work” by Harvey Robbins and Michael Finley, suggest that there are 7 methods of reaching a team decision
- Consensus
- Majority Rule
- Minority Rule (sub-committee)
- Averaging
- Expert
- Authority Rule without Discussion
- Authority Rule with Discussion
Typically, you would categorize the first three Methods as group discussion methods. The decision can either be fully delegated or, more often, just a recommendation is requested, which is then brought back to the leader for final approval (Method 7).
Averaging (Method 4) is useful where expert knowledge is not required and where averaging a set of decisions is more reliable than a single decision. It was made popular a few years ago by the book “The Wisdom of Crowds”. The Delphi Technique is a nice variation on this, where you exclude the upper and lower values. In these decision types, you are generally doing calculations as opposed to making choices.
Expert (Method 5) is for decisions where subject matter expertise is key and involves finding (or hiring) an expert (or experts) and delegating the decision to them. With these types of decisions, you are generally making choices rather than calculations.
You must be very careful not to use ‘The Wisdom of Crowds’ when the decision requires subject matter expertise or vice versa. Otherwise, you end up with ‘The Madness of Crowds’ or subject matter incompetence and make some really bad decisions.
Authority Rule without Discussion (Method 6) needs to be used carefully in teams as it can be disempowering, however it does have its place. It is certainly better than wasting everyone’s time having a discussion (Method 7) where the leader has already fully made their mind up on the issue and is just going through the motions.
All of these methods have a disclaimer: no matter how effective a method you choose, you won't make the right decision if just the usual candidates speak out or if individuals are hesitant to express their true opinions. Thus, the team's leader must create a psychologically secure environment where members feel free to express their opinions. Encouraging complete and honest decision inputs can also be facilitated by basic tools like post-it notes and group polling applications.
We have put together a leadership playbook that outlines the best practices for management decision making. If you would like a free copy, please contact us.