Platt Perspective on Business and Technology

Leadership and the three basic decisions

Posted in strategy and planning by Timothy Platt on August 11, 2010

I have at least touched on issues related to leadership a number of times in this blog, and two postings from Business Strategy and Operations come immediately to mind for me as I write this:

Leadership in Balance – managing vision in the face of detail, and
Leadership Succession and Maintaining Business Greatness – small and family owned businesses.

Leaders create and share a sense of vision, and are ultimately responsible for strategy and long term planning. Leaders are role models. Leaders are in fact many things, and one of these things is “maker of decisions.”

There are many types of organization and many leadership styles. Some systems and some leaders take a more rigidly hierarchical approach and a more autocratic approach, and decisions come down from the top. Some are more egalitarian and decisions are more consensus-based, and in this a leader can at times even find themselves serving more as moderator and referee than anything else. But not all decisions are created equal and not all contexts in which decisions are made are interchangeably equivalent.

For purpose of this posting I will assume an organization and a leader that allow for a measure of openness, but that are neither entirely top-down and autocratic, or entirely bottom-up and consensus driven. Most organizations, in fact, fall somewhere on a great middle range of a spectrum of organization and leadership style for which these are simply extremes, at least most of the time. Leadership in this more varied and fluid context means making three decisions, and knowing where each of them would best apply.

The first decision is in fact the top-down autocratic decision. This is where a leader has to simply state “this is what we are going to do here and now.” An obvious circumstance where this is needed is when it is necessary to coordinate action across multiple teams and where members of those teams do not have sufficient information to know what alternatives if any might be more favorable, and where timing is crucial and schedule restrictions tight. Military chains of command come immediately to mind there.

The second decision is the input-influenced decision, and in practice this and the first can be difficult to tell apart. Here, a leader turns to the members of their team for input and suggestions and then makes the final determining decision.

The third is where a leader steps down from a position of making a final decision and throws discussion and decision out to the team to vote upon or otherwise decide upon by consensus. When leaders turn to cloud sourcing, this approach is one of their basic tools for identifying and testing/prototyping new ideas and approaches. (See, for example Crowd Sourcing and the Opening Up of Open Innovation).

The real challenge is in knowing when to reach for which of these three basic decision types and when it may be necessary to reconsider and switch tactics and approaches.

On the one hand, good decisions require good information and feedback. If you start with faulty assumptions you will make faulty decisions. But at the same time decisions frequently have to be made quickly if you are to meet the challenge of changing conditions in an active marketplace. Decision one, above can be quick and three can often be more time consuming with two falling in-between. But quick decisions simply for the sake of centralized control and quick decision making can lead to much less than optimal results. A pattern of autocratic, and entirely top-down decision making without room for all that much feedback never can or will lead to blue ocean strategy opportunities. There is a reason why armies use a top-down chain of command and control, but there are also reasons why armies almost always start out entering into a new conflict fighting the last one they were in and no matter how long ago that was.

Learning to be a leader is in significant part a matter of learning when you need to make which of the three basic decisions and in learning how to judge when you have to make a switch. If this is done in the context of conveying a sense of mission and vision, and of appreciating the members of your team in fulfilling these with you, cutting off discussion and making that decision strengthens. A lack of clarity and focus here, conveying a message that feedback and shared thoughts are not listened to or appreciated weakens. And this is where a good leader has to be an effective communicator as yet one more hat worn.

Leadership has its learning curves and in fact an effective leader is always learning. This is one of the areas where it is always possible to learn at least something more. I am fairly sure to write further about this in future postings.

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