The Art of Making Decisions That Define Leadership

Leadership is one of the most important aspects of business. It involves inspiring others to achieve certain outcomes and cultivating a positive work culture.

Effective leaders understand the importance of making decisions quickly and efficiently. However, they also recognize the need to be flexible and adaptable when necessary. It’s a delicate balancing act.

1. Defining Your Purpose

Your purpose is your personally derived set of life aims that guide you into the future and give meaning to your existence. It’s what drives you to do the work that you do.

Most leaders are clear on what they do, but it’s more rare for them to be as clear on why they do it. Finding your purpose is a key component to reaching your full potential as a leader and leading a meaningful life.

To start, ask yourself how you want to impact the people around you and the world in general. Then think about the skills and experience you need to do that work well. You can also consider the risks involved in that work, such as the potential impact on budgets, resources, timelines, quality, and customer satisfaction. Having the ability to weigh these factors objectively without emotional attachment can help you make better decisions.

2. Defining Your Vision

In the business world, effective leaders must make decisions quickly, even when they don’t have all the information. A good vision statement is a guide to help you navigate these situations.

It’s important to make a vision that is inspiring, engaging and realistic. It should capture your company’s values and culture and illustrate the possibilities for its future success. To create your vision, start with a list of everything you want to achieve as a company. Then review this list and narrow down the most impactful items.

For this step, it’s important to ask for input from the team and stakeholders. Getting buy-in from co-founders, fellow executives and other high-level employees can help ensure that your vision is aligned with the larger company goals and culture. It’s also helpful to have a few rounds of feedback so that you can get rid of ideas that may not be as necessary or impactful. This may take some time and reworking, but it’s an essential part of developing a well-thought-out vision. The final result should be a concise paragraph that clearly outlines your vision for the company.

3. Defining Your Goals

Everyone knows that effective decisions are critical to business success. They save time, ease delegation and improve productivity by providing clear direction. And they motivate employees by showing that their leader can make tough choices quickly and confidently.

It's important to consider what the desired outcome should be before making any decision. Then, define a strategy to achieve that goal. This step helps you avoid one of the most common reasons for goal failure: a lack of specificity.

Moreover, a clear objective identifies how to measure your progress toward reaching that goal. And it allows you to establish a deadline for attaining that goal.

Often, leaders must decide when to make a decision alone and when to involve the team. It's also important to define how members can request your feedback on a particular decision. This helps prevent confusion about who should be involved in each situation and reduces frustration when a member can't get your attention on a critical matter right away.

4. Defining Your Strategy

A strategy is a plan of action to achieve improvement goals in several aspects of your business. It may also include a vision for the future that sets your company apart from others or defines its core values.

To formulate a strategy, you need to ask questions about the future direction of your company and the way it fits into its value network. For example, what do your products and services enable your customers to do? What are the customer needs that drive these choices? What are your strengths, weaknesses and opportunities for growth?

A good strategy makes trade-offs based on diagnosed challenges and available resources. It determines what activities are deemed to be important and what to let go, so you can concentrate on your key value areas. Effective leaders make decisions quickly and stick with them. They know that putting off key decision-making can cost them time and money. They also recognize that ineffective or ill-considered decisions can be more destructive than making none at all. This approach has been lauded by exemplary leaders like Da Vinci, who took full responsibility for his choices and helped his team cope with change.

5. Defining Your Measures

When making decisions, effective leaders set metrics to help guide their choices. These may include financial indicators such as revenue growth or profit margin, but they could also be softer measurements of success like employee satisfaction or market share. Then, they develop specific goals for themselves and their teams based on those metrics.

Then, they set clear expectations for how they will measure and report progress on those goals. This allows team members to hold their leaders accountable and gives executives a way to track leadership performance.

Another important consideration is where a decision will fit in the big picture of an organization. For example, if a group decides it's better to give skills-training presentations at local schools on ways to reduce violence, the decision maker(s) should consider whether they have the resources for this and other initiatives. If they do not, the group may choose to wait until they can make a more informed decision.

6. Defining Your Outcomes

Every day, leaders make a variety of decisions that impact those around them. Some are so small that they may barely register a leader’s attention--how a phone call is handled, what colors to buy for construction paper in the supply closet. While avoiding decision fatigue is important, effective leadership demands that all choices be considered and evaluated.

To identify what outcomes a specific choice is likely to have, think about both the positive and negative impacts. This step is especially important for decisions that appear to be a simple this-or-that choice but often have many possibilities lurking under the surface.

Defining the outcome of a decision can help leaders avoid costly mistakes. It can also provide clarity of direction for employees, reducing confusion and frustration when work is delayed while leaders ponder what should be done next. As a leader, it’s essential to be able to quickly make decisions that propel work projects forward and improve productivity. And once a decision is made, be prepared to stand by it and take responsibility for the consequences.

7. Defining Your Measures of Success

Effective leaders have a clear sense of what their measures of success are. Whether they're focused on their personal wealth, job satisfaction, or a combination of both, these strategies help them define what they want and work towards it.

Defining their measures of success also allows them to make better decisions. By setting goals that align with their values and priorities, they're able to avoid the cognitive biases that can lead to faulty analysis or bad judgment.

When making decisions, they take the time to understand how their choices will affect others and the larger organization. They also look at potential unintended consequences before making a decision and set interim goals to help them achieve their longer-term vision.

They're also able to move quickly through decisions, which saves them time and propels work projects forward, improving productivity. Oftentimes, it's the inability to make decisions that causes projects to stall, so effective leaders can help their teams get back on track as soon as possible. This can be especially crucial when working with high-profile clients or in a sensitive environment.

8. Defining Your Measures of Failure

Defining your measures of success is one of the keys to effective leadership. It allows you to evaluate your decision-making processes and identify areas for improvement. It also helps you set clear expectations for your team members and stakeholders.

Managing risks and consequences is another important component of decision making. It involves weighing short- and long-term outcomes and evaluating alternatives. Often, this requires considering the implications of different choices simultaneously and encouraging other members of the team to do the same.

The best leaders are resilient, even when things go wrong. They are able to change course quickly and adapt to changing circumstances. They do not dwell on mistakes or allow negative self-talk to interfere with their effectiveness. They take pride in their work and sincerely believe that their decisions have the potential to make a difference. They also hold themselves accountable for their choices, which fosters transparency and accountability throughout an organization. This is the hallmark of a confident leader. It is the only way to build a sustainable culture of decision-making.