We are remembered for the decisions we make. The right one, the wrong ones, the ones we avoided and deciding by default, and the ones made for us when we did not move fast enough. For leaders, no matter the uncertainty or noise around them, it is their job to make decisions. And to make sense doing so.
How do we know we are making the right decisions for the present, and the future?
At this point, leadership decisions appear to be focused on short termism and incrementalism is touted as innovation, masked in positive public relations. If we say it is great, it will be, right?
No, leaders are missing an opportunity.
The role of a leader is simple – make the most informed decisions to achieve success for the organization. And those decisions support the two basic jobs of a leader – to position the organization around clear goals and to shape the working environment enabling people to work at their best together to make progress toward those goals. Decisions will limit or leverage the capacity of the organization in its efforts.
While we found in our research that leaders rank their ability to make deliberate and focused decisions highly, at 85% on average, employees feel differently. People in their organizations rated the decisions made at 67.3%. And the largest gap was around the clarity of the strategy, with more than 35% of people not understanding the direction and what was important for the business.
For leaders trying to mobilize people around a shared goal, these numbers are not encouraging. Why is there such a gap in understanding the direction?
The challenge is in making decisions that balance two apparently conflicting positions – what is right for now and right will set up success for the future. This is the defining point. We are giving up our future to focus on today.
The problem starts at the senior team level, with 82% of executives themselves not feeling their decisions made together are effective. While the leader may be certain, the lack of confidence at this level creates mixed messaging and confusion as to priorities, limiting the performance capacity of people individually and collectively. People do not understand what success means.
The last year has seen leaders challenged in setting direction. With the pandemic, there are concerns over the viability of the organization as well as how to move on opportunities at the same time. This is one of the limitations of leadership teams, they are not able to balance seemingly conflicting thinking to make decisions for now and the future.
Research has shown resoundingly that organizations that perform well during and after a time of upheaval (and now would be one of those events) are the ones that take steps to manage the continuity of the business while also seeking out future-based opportunities, innovating, and building new capabilities. And employees felt that attention to innovation was essential over the past year, with 82% of people ranking it as critical to organizational success.
With the inability to balance today and tomorrow, indecision resulted or decisions that have seemed short-sighted to employees. And 47% of people also do not feel leaders have focused on innovation.
What needs to shift to make better decisions?
The key to making decisions that balance today and tomorrow lies in focus on two guiding principles: perspective and purpose.
Strategic decision-making today requires a deeper and broader understanding of what is happening, why it is happening, and how it is playing out. We need perspective from the people around us, not just in the boardroom, but throughout the organization.
We use analytics to support leaders clarify what is important to inform decisions. In the basic form, our work measures how people think and feel so leaders gain a full perspective, rather than talking around the table. The analytics are confidential so people can be open about their thinking, and the true beliefs of all workers and leaders are heard.
The right data helps inform decisions, but what creates consistency of direction?
This is where purpose comes in. There has been no time in recent history where a clear purpose has been more important. The continued uncertainty, ambiguity, and complexity of the Covid-19 world has caused many leaders and organizations to lose their way, fall prey to heightened anxiety, and be challenged on making choices.
Purpose is both personal and emotional, bringing the present and the future together for an organization and the people in it. McKinsey and Company reported late in 2020 that 82% of executive teams felt that purpose was important to guide decisions. However, only 42% of the workforce felt that purpose played a part in decisions made.
The simplicity of purpose is what makes it so essential – it is about what we do, for whom, and why it matters. With this clarity of thought, leaders can frame their judgment around decisions for today and the future at the same time, as it all fits together. We can preserve and protect while also testing and exploring. We can take bolder steps as they fit the guiding purpose of the organization.
Decisions made from the collective perspective of people in the organization and framed around the purpose make sense and everyone gets it. Leaders and their senior teams feel more confident and are clear on what is important. Direction is communicated with consistency.
This year, in our own small business, we made decisions to cover our bottom-line and then shift and adapt to the market, feeling positive about the direction taken. Our purpose was clear and provided criteria for what worked for our business or did not. When opportunities arose, we could assess them against the criteria and make a sound choice. Everyone was involved. Purpose brought it all together.
One of the key capabilities of a leader is to make sense of it all for people. It is not something we do well, we are human and pulled by the noise and events around us. But decisions made need to make sense. The readiness and commitment of people (something we also measure) will be much greater when decisions lead from a clear and communicated purpose, and the perspectives of all were heard to inform the choices made.
Data can be accessed, and the insights gained invaluable to informing the executives leading the organization in assessing what is important, where challenges are, what opportunities fit, and how to bring people together around a shared goal.
It is about asking, listening, and making sense of it all with purpose.