How the best leaders approach their toughest decisions

Everyone has to make tough decisions. When you’re in a position of power, making tough calls comes with the territory, but they can still be daunting.

How do you balance business needs with those of your team while staying true to the company’s values?

Vistage speakers Craig Weber, founder of Weber Consulting Group and author of ‘Influence in Action,’ and Dr. Gleb Tsipursky, CEO of the non-profit Intentional Insights and author of ‘Never Go With Your Gut,’ share their insights on approaching tough decisions.

Characteristics of tough decisions

To start building a framework, it helps to understand some of the characteristics of a decision.

The first characteristic is coherence. Coherence refers to a clear understanding of what you’re deciding, including each aspect of the choice. This clarity “comes from a rigorous analysis of data and open dialogue with key stakeholders,” explains Tsipursky.

The next is circumstance. The conditions surrounding the decision form its context, which heavily influences the decision itself and its outcomes. As Weber says, “You can’t make a decision in a vacuum. It’s got to be in a context.”

Finally, consider the possibilities that arise from the decision. Weber recommends reviewing the ramifications of each possible outcome. ‘If you’re looking at it as a one-dimensional issue, I think your problem-solving is going to suffer,’ he says.

Tsipursky adds that ‘exploring various options lets you account for uncertainty, enabling a more robust decision-making process.’

Six questions smart leaders ask when faced with a tough decision

Here are six questions to ask when you deal with a difficult decision.

1. What are the consequences of this decision?

Tsipursky advises leaders to use probabilistic thinking to determine the possible outcomes of a decision. You might not know with 100% certainty which result will arise, but you can use available data to understand the likelihood of each one.

It’s crucial to consider the possible unintended consequences of each decision.

Weber says, ‘It’s hard to understand the consequences until you’ve engaged with a variety of stakeholders.’ Engaging with your team and other stakeholders provides ‘a much broader view of the range of risks.’

2. When do I need to make this decision?

The timing of a decision varies based on its context. Some choices must be made on the spot, while others take months.

Weber says a critical factor in the timing of decisions is knowing whose perspectives you want to engage. ‘If I have a wide range of people I want to engage with before I make the decision, I need to factor that in, and that might take a little more time.’

He acknowledges that in a crisis, you might not have time to engage with other team members. But for long-ranging, strategic decisions, ‘I may have the luxury of slowing down, engaging a lot of people, and taking more time.’

3. How does this decision affect those around me?

Weber’s advice for determining how a decision affects others is simple: ‘Ask.’

Directly involving team members helps them feel engaged in the decision-making process. It also allows them to alert you to possible outcomes you might not have considered, especially if you involve a range of people.

‘You want an operation person to raise their hand and say, ‘Look, I know this might make sense in the C-Suite. But from an operational perspective, here’s the damage it’s going to do,’ ‘ Weber explains.

4. What information do I need to make this decision?

Write down all of the necessary details before making a decision.

‘List required data and metrics, prioritizing them by how strongly they influence the decision,’ Tsipursky says.

After a decision has gone into effect, you can review and determine whether any information was missing.

5. What is my communication plan for this decision?

Weber and Tsipursky agree that leaders should communicate decisions in a clear, consistent and transparent manner.

Weber adds that the leader and their team’s conversational capacity is an underappreciated aspect of executive decision-making. According to Weber, ‘Conversational capacity is the ability to engage in constructive, learning-focused dialogue about difficult subjects, in challenging circumstances, and across tough boundaries.’

If your team’s conversational capacity is low, people will hesitate to share their concerns. To avoid this pitfall, leaders need to create a sense of psychological safety.

6. What do my peers think of the decision?

To gather peer input, Tsipursky uses structured approaches such as the Delphi Method.

This method involves gathering a panel of experts who complete multiple questionnaires. Once these rounds of questions are complete, the group will review the results and reach a consensus.

The hard decisions leaders face

Each leader and each company is different, so they inevitably face various types of decisions. Some are universally challenging, such as layoffs, changes in company policy, resource allocation and implementing new technologies.

Weber recommends a similar approach for all of these situations. Gather as much input as you can from a range of stakeholders. Then, review the possible outcomes. A layoff, for example, might result in temporary financial gain but have far-reaching negative consequences for your business culture and reputation.

Tsipursky says it’s essential to make each decision as objective as possible. Workforce analytics can help you ‘identify redundancies and skill gaps,’ ensuring that any layoffs align with business needs.

He applies the same logical approach to each kind of decision. Strategies such as A/B tests, pilot programs and zero-based budgeting help validate changes in policy or resource allocation.

Self-reflection after a tough decision

Regardless of the outcome of a decision, you can learn from it. Tsipursky says it’s vital to schedule time to review each choice after the fact. Then, you can update your decision-making framework based on what you learn.

Self-reflection is part of the process for Weber as well. Aside from reviewing the outcomes, he recommends asking whether there’s ‘anything I learned from working this decision that would help me improve the next one.’

For a simple decision, the review process might only take a few minutes. For big, impactful decisions, you’ll likely need multiple review sessions. And remember, you don’t have to go through this process alone. As Tsipursky says, you can engage with trusted peers to gather critical feedback.

Tough decisions are never a simple process, and for leaders, they are part of the job description. Taking the time to understand, ask questions and reflect can be the difference between a critical mistake and company success.

Originally published on Vistage Research Center.