A Practical Guide to Better Decision Making With Your Teams

Have you ever made a wrong decision?

I sure have.

The average person takes 35,000 decisions a day, according to Harvard Business Review. Most of them are small and inconsequential, but there are big moves in there too.

So how should you make those tough ones? The ones with real impact on your team, your project, and your career?

Let’s dive in:

Decision-making is part art and part science

I’ll start by stating the obvious: you will get it wrong sometimes.

In fact, more often than you’d like.

But if you approach decision-making in a structured way, you can drastically lower the odds of making a mistake that has nasty consequences.

Decision-making is making a choice from a range of options, with the goal of achieving a specific objective.

Here’s the structure that has worked best for me:

1. Define

2. Select a style

3. Ambiguity and risk

4. Decide and communicate

1. Define the decision

I’m risking sounding like a broken record here, but it has to be said: it starts with why.

Why are you taking a decision? What happens if you do nothing?

You’ll need to dig deeper and define a clear objective for your decision. What are you solving for?

Decision-making is a balancing act between speed and accuracy. If you don’t have a clear objective, you can’t walk that tightrope.

Use these questions to define your decision:

1. What problem are you solving?

2. What choices does that involve?

3. What is the impact & complexity?

4. How high are the risks & ambiguity?

5. By when do we need to make a decision?

6. Which stakeholders will be affected by the decision?

2. Select a style

There are many different ways of making a decision. We’ll stick to the three most common in project environments. Each one of them is applicable to a different situation and has pros and cons.

There are two dimensions that impact which style you choose:

1. Urgency: how fast do you need a decision?

2. Size: defined as impact x complexity of the decision

You can view them in a 2×2 matrix like this:

As you see, deciding when to meet is both a small and non-urgent decision. Investing $9M is a huge decision, and could be urgent if the team is waiting. Your release strategy is big, but not urgent.

Each of these decisions will use a different style of decision-making.

Autocratic

This means a single person takes the shot. This could be you as the project manager, but can also be someone within the team who is in charge of a piece of work.

This works best in controlled environments where buy-in is not necessary, and where you don’t need additional input.

They are best applied to low urgency/small decisions, but as urgency rises, the size of an autocratic decision can increase.

Participatory

These decisions are taken by a small group or individual, but with input from a larger group of stakeholders.

This style lowers the risk because you get more information, and increases buy-in as people feel heard.

This applies to larger decisions that are urgent, and where the responsibility lies with a specific person, like your project sponsor.

Consensus

This means that everyone will agree to the decision, which is made by your entire team plus relevant stakeholders. You’ll get many different viewpoints and inputs to reduce risk and ambiguity.

Reserved for the biggest decisions where buy-in is crucial, where the responsibility lies with your entire team, and when you’re not in a hurry.

The main difference between participatory and consensus is who takes the final decision. Is it a team decision, or just a small group or individual? You'll have to make the trade-off between increased buy-in (consensus) or speed (participatory), while also considering who is responsible and accountable for the decision in your organization.

Once you’ve chosen a style, you need to inform the relevant stakeholders. Follow your stakeholder communication plan, and explain what you expect from someone and what they can expect from you.

3. Adjust for ambiguity & risk

I like to use Jeff Bezos’ perspective on type 1 vs type 2 decisions, which he introduced in 1997. (Link to the original Amazon shareholder letter)

A type 1 decision means that there’s no way back. It’s a door that once closed, cannot be opened again. These decisions are big, risky, uncertain, or all of the above.

On the other hand, a type 2 decision is reversible. If you get it wrong, you can fix it easily.

Your goal?

Have as few type 1 decisions as possible.

But what if you do have to make a type 1 decision?

You can reduce risk & ambiguity with three main approaches:

1. Involve more people

2. Use more time for analysis

3. Break big decisions up into multiple small ones

The ambiguity and risk involved in your decision, influences which of the above styles you choose to apply.

You can see how the first two, using more time and involving more stakeholders, are not always feasible. That’s when you’re left with breaking the decision up, or accepting the higher level of risk & ambiguity.

You can also apply risk management to the possible consequences of a decision, to mitigate the impact of a wrong decision.

While ambiguity and risk sound daunting, there will always be a level that you’ll need to accept.

And those type 2 decisions?

Remember how we spoke about balancing speed versus accuracy earlier?

If the consequences are reversible, that means you can move faster. Moving faster means shorter feedback cycles and quicker execution.

Go!

4. Decide and communicate

Once you’ve defined your decision, applied the right style, and found the right balance between accuracy and speed, it’s time to decide.

But that doesn’t mean you’re done.

You’ll have to communicate to your stakeholders:

1. What the objective was

2. How you took the decision

3. How you’ll measure success

4. What could lead to a reversal

You’ll also have to add new risks to your risk log, and monitor them.

Obviously, the above doesn’t apply if you have chosen when to meet or what pastries to order. But if the stakes are high, structured decision-making will help you:

• Show you’re in control

• Reduce risk & ambiguity

• Create necessary buy-in

• Stay calm under pressure

Practice often on smaller decisions, so you’re ready when you’re facing a big one.

Now, go make that next decision with confidence!

Two things I think you'll enjoy:

1. If you want to learn more about decision-making from 2 of my favorite authors in a fun and practical way, I highly recommend Decisive by Chip & Dan Heath.

2. If you’d like to dig deep into how our mind works around decision-making, you can’t beat Thinking Fast and Slow by Daniel Kahneman.

Cheers,

Jasper