We live and work in a world of decisions, from the small ones that spark almost imperceptible changes in our daily lives, to the massive ones that can lead to breakthroughs – or catastrophes.
But if practice makes perfect, why can even the most experienced leaders make bad decisions – and what can we do to change it?
The challenge of decision making emerged as the running theme of the Center for Operational Excellence’s three-day Leading Through Excellence summit, an annual April gathering of nearly 250 process improvement professionals driven to sharpen their leadership and problem-solving skills. Chip Heath, a Stanford University professor and the bestselling co-author of Decisive, Switch and Made to Stick, served as the featured keynote speaker for the summit, which enlisted nearly two-dozen Fisher College of Business faculty and industry leaders for breakout sessions and workshops.
Decisive, released last year, looks at decades of psychological and business research into a wide range of decisions and decision-makers, from teenagers to top-level executives. It comes to the conclusion that the same methodical approach applied to many other functional areas of an organization is applied far too seldom to decision-making.
“One of the ironies of organizational life is that we think a lot more about the process on the front lines where decisions may involve thousands of dollars, than at the top of organizations where decisions may involve tens of millions of dollars,” Heath told the crowd.
Statistics alone paint the picture. One survey of high-ranking executives, Heath said, found nearly two in three saying bad decisions were as frequent as good ones at their organizations. Some of those bad decisions appear to involve C-suite hires, as another study discovered roughly 40 percent of these placements – crucial strategic decisions for any organization – survive beyond 18 months.
Perhaps most jarring, Heath said, is a study that found the rate at which merger and acquisition deals actually create lasting value to be less than 20 percent.
Driving this slipshod track record, Heath said, is an impulse that worms its way into most humans’ brains during their teenage years and appears to be hard to shake: The desire to frame decisions as a do-it-or-not proposition, instead of a range of choices. Dropping the “or not” impulse and examining multiple options, Heath said, not only leads to better decisions, but faster ones, a notion that seems almost counterintuitive.
“Your role as a decision maker, as a designer of processes, is to widen your options,” Heath said.
The illusion of inclusion
Another keynote speaker at this year’s COE summit focused on the decisions we make unconsciously in our everyday lives. Helen Turnbull (pictured, left), a nearly 30-year veteran in the field of organizational behavior, explored the notion that many companies fail to unlock the potential of their work forces because of sometimes imperceptible biases, not just on race and gender but on age and socioeconomic group, among others.
“We’re all looking at the world through the eyes of our expertise, but the problem is we don’t know what we’re not seeing,” Turnbull said.
The problems these biases can create in organizations extend beyond simply creating an environment some employees deem unsafe – it can hamper that crucial act of decision-making as well, Turnbull said.
“Sometimes we manage companies to such an extent that people learn what they need to do to fit in,” she said. “In doing that, they stop speaking up, stop telling you what they’re really thinking, and they start complying to such an extent that you’re no longer being told the truth about what’s actually happening.”
The first step to stopping this “illusion of inclusion” that damages so many organizations, Turnbull said, is to look not outward – but inward.
“It’s not OK to think, ‘I’m pretty good at this (diversity and inclusion) stuff,’” she said. “We need to accept that we’re not as good at this as we think we are.”
Good decision-making – after a rash of the opposite – is what brought one of the final keynote speakers to the stage on the closing day of COE’s Leading Through Excellence summit.
Cameron Mitchell, the namesake of Cameron Mitchell Restaurants, traced his beginnings as a “bitter young guy” who barely graduated high school to the wildly successful leader of a restaurant chain with 20 locations and nine different concepts spread across several states.
While Mitchell’s company has brought in more than $1 billion in revenue after 20 years of business and created thousands of jobs, he said it’s not the pursuit of profit that’s at the heart of its day-to-day operations.
“The most important thing we want to do is not to make a profit,” Mitchell said. “Our goal is to maintain our culture and our values.”
That culture includes a relentless focus on training employees to provide consistent and outstanding customer service – look no further than a motto that reads “The answer is ‘Yes;’ now what’s the question?” – and a drive to ingrain those values into everyone in the organization.
“We want to teach people how to think,” he said, “not what to do.”
This commitment to culture and its communication is not only a key facet to the success of Mitchell’s chain, but a key lesson to any kind of leader.
“The biggest mistake leaders can make is to allow ambiguity to permeate the business,” he said.
Leading Through Excellence closed with an address by Lawrence Funderburke, a former Buckeye basketball and National Basketball Association star who made his own life-changing decision in recent years. Today, Funderburke is the leader of the Lawrence Funderburke Youth Organization, a nonprofit that helps at-risk children and teenagers with education and financial literacy.
A graduate of Fisher College of Business, Funderburke made a lasting mark at Fisher and at The Ohio State University in 2001 by establishing a $100,000 endowment, half of which was earmarked to support disadvantaged Columbus natives attending the college.
For a look back at the full summit, check out our Flickr page.
This article appears in the April 2014 edition of COE’s Current State e-newsletter. Have a colleague who should be receiving this e-newsletter? Contact Matt at email@example.com.