Andrea Alexander, Aaron De Smet and Leigh Weiss* say decision-making amid uncertainty is not easy, but these five principles can help leaders make smart decisions quickly to guide their organisations.
Making good, fast decisions is challenging under the best of circumstances. But during a crisis of uncertainty, organisations often face a potentially paralyzing volume of unfamiliar, high-stakes decisions.
The typical approach–postponing these “big-bet” decisions to wait for more information–will be far too slow to keep up. In fact, waiting to decide is a decision in itself.
To ensure quick, bold decision-making during uncertain times, follow these five principles.
Take a breath
Pause and take a breath, literally.
According to research by Vincent P. Ferrera, Jack Grinband and Tobias Teichert, the simple act of pausing, even for as little as 50 to 100 milliseconds, allows the brain to focus on the most relevant information.
In a crisis, it may seem counterintuitive to take a moment to step back, take stock, anticipate and prioritize, but it’s essential.
This can help avoid knee-jerk reactions that lead to poor outcomes.
Involve more people
Amid uncertainty, leaders often feel an urge to limit authority to those at the top, with a small team making the big decisions behind closed doors.
Reject the hierarchical model of normal times.
Involve more stakeholders and encourage different views and debate by taking the following steps:
o Clarify the decisions to be made
o Identify a small number of decision makers
o Identify who should have a voice, including relevant stakeholders and experts, and those who will implement decisions
o Create a forum for rapid debate to take place. Be clear that everyone has a voice but not a vote
Once decisions are made, quickly pivot and speak to those executing the decisions to clarify the actions to be taken, timelines, accountabilities, and answer any questions about what comes next.
Make the critical small choices
Some decisions that seem small or routine at first can have large, long-term, strategic implications.
They can be hard to spot, but leaders must look for them.
Take these steps to make critical small choices:
o Anticipate multiple possible scenarios for how things might unfold over time
o Make a list of 5-10 choices or actions that handling today might make a difference later
o Engage others to help identify the small decisions or actions you should address now, in case they become the difference makers down the road.
Set up a nerve center
When making a high-stakes decision, it’s important to focus attention on the issue at hand. That means focusing on strategic, rather than tactical, decisions.
A strategic decision comes with a high degree of uncertainty, a large likelihood that things will change, difficulty in assessing costs and benefits, and a result of several simultaneous outcomes.
A tactical decision comes with a clear objective, a low degree of uncertainty, and relatively clear costs and benefits.
Tactical decisions are often better left to those on the edges of an organisation who can act effectively without raising issues to higher levels.
Ensure that the right people make tactical decisions by setting up a nerve center: a network of cross-functional teams with clear mandates, connected by a central team that keeps everyone coordinated, ensures collaboration and transparency, and sees that decision-making occurs thoughtfully and quickly.
Empower leaders with judgment and character
When empowering other leaders, don’t just pick the usual suspects to lead the response.
Identify people who have done as many of the three following things as possible to increase the likelihood of success in times of uncertainty:
o Lived through a crisis and shown their mettle and personal resilience
o Made a tough, unpopular decision because it was the right thing to do
o Willingly given bad news up the chain of command to leaders who didn’t want to hear it
Decision-making amid uncertainty is not easy, but these five principles can help leaders make smart decisions quickly to guide their organisations through crisis.
*Andrea Alexander is a writer at McKinsey; Aaron De Smet delivers growth, innovation, and organisational agility at McKinsey; and Leigh Weiss is a writer at McKinsey
This article first appeared at mckinsey.com.