Decision Making as a Leader

It is estimated that the average adult makes about 35,000 remotely conscious decisions each day (apparently according to Cornell University researchers, we make 226.7 decisions each day on food alone!).

Effective decision making is vital both to drive growth, and timely and decisive action can prevent minor issues from escalating into significant problems, preserving the organisation’s stability and reputation. In times of crisis or uncertainty, strong decision-making capabilities enable leaders to steer their companies through challenges with resilience and adaptability.

For business leaders, their effectiveness is often measured by the quality of their decisions, making this skill an indispensable attribute.

Daniel Kahneman’s book?‘Thinking, Fast, and Slow’?does a great job to describe the process of decision making where combines information and instinct to help us form our judgement. ?

In the book it describes that our mind combines two systems: System 1, the fast-thinking mode, operates effortlessly and instinctively, relying on intuition and past experiences. In contrast, System 2, the slow-thinking mode, engages in deliberate, logical analysis, often requiring more effort.

Warren Buffet is often praised for his decisive decisions.? In 2008, at the peak point of the global financial crisis the legendary investor invested $5 billion in Goldman Sachs to strengthen the firm's capitalisation and liquidity, where he reportedly made the decision in one weekend.?

In his annual shareholder letter each year Warren Buffet writes that it is his job to make just one good decision a year, but of course it does mean he is making many decisions each day, it’s just a decision to not invest and do nothing.

Decisions are what to do but also what not to do and they carry consequences that are both good and bad.? I personally think we should always ask ourselves does it fit with our agreed strategy to achieve our vision, what are the levels of risk, what resources will be required using both systems from Kahneman’s fast and slow thinking.

Leaders must also balance short-term gains with long-term sustainability, considering the broader impact on stakeholders, including team members, customers, and the wider community.

Finally, it’s also important to stress that in a typical day one cannot remain in the “decision mode” all day or you will burn out. It is important to delegate most if not all operational decisions to free up your time and energy to focus on they key things.

Look forward to everyone’s thoughts.

What systems and frameworks do you use to help make decisions?

Simon Cartmell OBE

Chairman at OssDsign AB

7 个月

The last para is v important.. delegation grows the team as they ‘practice’ and move through any given task maturity cycle, it also frees time for type 2 thinking. In the Buffett story, I am reminded of Churchill’s maxim about ‘masterful inactivity’ being a key strength of any leader… essentially not over-reacting to a situation and letting things play out a bit. In todays world of hyper responsiveness and instant everything, it has a place.

Mark Wignall

Entrepreneur, Investor

7 个月

As usual, great stuff Peter. Two tips that served me well. Think problems/challenges through then decide quick and execute quicker =job done. But, crucially, also think do I really need to take a decision on this tricky problem right now? if answer = no, then let time play out and see if decision needs to be different or needed at all

Erik Jan Scholten

Business Coach and Mentor, Accredited Civil and Commercial Mediator

7 个月

Thank you Peter. I think your last paragraph is also critical and one can reduce the number of decisions one has to make by delegation but also by building in routines. Obama allegedly decided to always wear a white shirt and either blue or black suit. He said it reduced the number of decisions he had to take at the start of the day.

Jonathan Orr

Leadership Coach | Business Growth | Business Transformation

7 个月

A great newsletter Peter Dines. I often think that the quality of decision is, in some part, down to understanding as many of the possible outcomes as possible. As a visual thinker I do like a mind map to help me work through all the possible outcomes and understand their associated risk and rewards.

要查看或添加评论,请登录

Peter Dines的更多文章

  • What's your BHAG?

    What's your BHAG?

    I often ask leaders during my discussions this question (pronounced BEE-HAG) and I am often met with a…

    1 条评论
  • The Importance of Force Multipliers to Win the day

    The Importance of Force Multipliers to Win the day

    As a venture capitalist our team review every day business plans that forecast sustained revenue growth and future…

    4 条评论
  • Eldership: The next important step for experienced business leaders?

    Eldership: The next important step for experienced business leaders?

    This week I attended two events that were both really enjoyable and thought provoking. Firstly, our team at Mercia…

    8 条评论
  • Kissing Frogs

    Kissing Frogs

    Today marks my 10th anniversary at Mercia Ventures. After I successfully exited my business, I was certainly not ready…

    8 条评论
  • On Time and Present

    On Time and Present

    I often have team members recommend books to me and before Christmas I was recommended “The CEO Within” by Matt…

    6 条评论
  • The Importance of Customer Experience

    The Importance of Customer Experience

    Jeff Bezos once said “Start with the customer and work backward. That is the best way to create shareholder value.

    8 条评论
  • Can Leaders switch Industries?

    Can Leaders switch Industries?

    Steve Jobs did it with Pixar and Apple, Elon Musk does it with Space X and Tesla and Twitter founder Jack Dorsey has…

    6 条评论
  • The Benefits of a Digital Detox

    The Benefits of a Digital Detox

    Last week, I did another of my regular endurance challenges. This one was called Race to the Wreck which was 300km on a…

    6 条评论
  • Another (possibly surprising) element I think Leaders need to be responsible for

    Another (possibly surprising) element I think Leaders need to be responsible for

    In my opinion, one of the many responsibilities of a leader is to influence the body and brain chemistry of your team…

    17 条评论
  • The Importance of Systems

    The Importance of Systems

    James Clear in his book “Atomic Habits” has a phrase I really like - “You do not rise to the level of your goals. You…

    9 条评论

社区洞察

其他会员也浏览了