observations about playing well in the mental game in business

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this page is: Bruce Wilson's Notebook

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  Balancing cost and quality in decision-making

Welcome! This is Notebook entry #13 dated March 29, 2006

Bruce Wilson's notebook

Bruce Wilson's Notebook

Topics in order of date:

link page: The one page (two sided) consensus tool "cheat sheet"
  - June 6, 2006 -

link page: Reaching Consensus -- using a five degree consensus scale
  - May 25, 2006 -

this page is: Balancing cost and quality in decision-making
  - March 29, 2006 - (this page)

link page: Too much talk, not enough action: how to switch it around
  - March 3, 2006 -

link page: When to use Consensus for decision making
  - December 8, 2005 -

link page: See the complete list of entries for Bruce Wilson's Notebook (15 total)

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There is an apparent conflict between making decisions efficiently, which is to say, using a low-cost process for decision making, and making efficient decisions, the decisions that are most likely to lead to good quality results.

Decision process is important in several ways. For instance, delegation is an efficient decision-making process when it reduces the number of people involved and thus the total number of hours put into making a decision. This is true whether or not the person given decision-making authority has the most expertise in the area of the decision. Delegation also has potential intrinsic benefits. It can build decision makers' expertise and help them develop in their organizational roles. In large part one learns to be a better leader by leading, and a salesperson by selling, and so on. Thus, even if the decision arrived at by a delegatee could have been improved upon by someone with more expertise, an organization benefits by using delegation as a process because of the time savings and the delegatee's expertise building and role development.

But there can be costs associated with quick decisions, and decisions involving fewer people, as compared to slower decisions and decisions involving more people.

Decision quality, as well as the decision makers themselves, may benefit immensely when goals, assumptions, and alternatives are fully discussed. Even the most experienced, most qualified, most respected, and most intuitively gifted decision makers will face decisions that are outside of their expertise, or for which they lack adequate information, or which fall into their personal blind spots. Properly framed challenges help decision makers "check their math" and discover answers that may have been hidden.

Or as Richard Doherty was quoted by USA Today as saying about the turnaround at Apple when Steve Jobs resumed its leadership: "[H]e asked these amazing questions, and the company started to transform."

Answering questions also helps decision makers articulate their decisions to the degree necessary to sketch a vision that others in the organization can get behind and follow through on. As well, those who ask questions develop their domain expertise, and refine their art as decision makers, by running through the mental workout of formulating and presenting questions.

But decisions which include the input and approval of larger numbers of people can be inefficient from a process perspective. Learning curves, egos, politics, or simply the sheer volume of people who want to be heard can make group processes extremely time consuming.

Your best practice will be to remain aware of the potential tradeoffs between efficient decisions and efficient decision-making. Make strategic choices somewhere between the two extremes, accept the potential downsides of your choices, and be prepared to deal with pitfalls should they appear.

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