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?