How to Make Executive Decisions

Executive decisions can make or break a business.

These choices come with big pressures and potentially big rewards. The risk paid off for Netflix, for example, when it pivoted from renting out DVDs to producing content. On the other hand, sticking to its existing designs caused smartphone leader Motorola to be outpaced by Apple.

So what should you consider when making top-level calls? And what are the pitfalls you need to avoid when time is tight?

This article and video can’t take the decision for you, but it has practical guidance and advice to give you a better chance of getting your "big bet" correct.

What Are Executive Decisions?

Executive decisions aren’t the moves businesses make every week, or every quarter, that can be delegated to others, such as marketing plans or new shift patterns.

Instead, they’re the biggest business-changing decisions: infrequent, strategic, high-risk choices that affect your company’s future. [1] Think relocating your offices to another city or country. Or dropping a major product that’s been performing below expectations. These decisions, therefore, must be made at the highest level.

Key Components of Effective Executive Decisions

1. "More Haste, Less Speed"

Actually, speed can be your friend in executive decision-making. The point here is to act swifty, but not to rush things just for the sake of it.

For example, don't exclude people or data from your decision-making process just to save time — but neither should you delay excessively. For one thing, if you spend too long making a decision, your competitors could seize opportunities while you’re continually assessing your options.

A report by global business consultancy, McKinsey, found there was, "a strong correlation between quick decisions and good ones, suggesting that a commonly held assumption among executives — namely, 'We can have good decisions or fast ones, but not both' — is flawed." [2]

2. Gather All Relevant Information

American economist W Edwards Deming said, "In God we trust. Everyone else, bring data.”

So, your second key element is to identify the information you need to make the most informed decision – and who can get it for you.

Ask your business area experts to summarize what they’ve found: you need the top-line data, not the full reports. Also, ask them to double-check the data is current, timely and accurate.

3. Involve the Right People

Ultimately, though, your most valuable resource is your people. Diversity of thought and opinion brings real wisdom to the table that you can unlock through constructive debate.

That said, not everyone needs to be consulted on these big bet decisions, and too many voices can slow the process down.

3 Common Pitfalls When Making Executive Decisions

1. Death by Committee

Decisions can be decelerated by long-winded processes. This can lead to “death by committee,” where progress grinds to a halt.

Combat this with clearly-defined deadlines and goals at every stage of the decision-making process. Delete any unnecessary steps. And keep everyone focused by frequently reiterating the wider goal of the process.

2. Unnecessary Delays

Big bet decisions can be improved by practices that encourage more productive, honest debate. But sometimes, extended discussion can be an excuse for delaying the decision. When you’re not hearing any new and relevant information or insight, stop, reflect and make the call.

3. Overcommitment to Consensus

Groupthinkcan be another problem in the decision-making process. Some organizations have a bias towards consensus, which leaves big blind spots in decision-making. If you suspect that some people don’t feel willing or confident to criticize plans or ideas, identify a rotating “devil’s advocate” to put the other side. [3].

If everyone tends to agree with one senior executive, require that person to ask questions first, and give their opinion last. This way they’ll have less influence over others’ thoughts.

4. Uninspiring Meetings

The way your organization runs meetings can often deaden debate and impede effective decision-making. Try switching from, for eaxample, a scripted PowerPoint presentation to an interactive whiteboard to encourage dialogue.

For remote or hybrid meetings, use a collaboration tool like Miro to gather information and analyze options. New processes can encourage fresh thinking.

When to Make the Decision

Smart decisions are fed by respectful conflict and healthy tension. [4] So encourage lively discussion and try to hear all sides of an argument. Delegate someone to record the main discussion and summarize the essential points.

Keep the process out in the open. Discourage any “back room” debate or deals where people share thoughts away from the main table. [5] Stick to deadlines – allow a set time for discussion before shutting it off.

You might have to make the final decision by yourself. But that shouldn’t stop you considering other people’s thoughts, experiences and insights. This doesn’t mean them sharing decision-making responsibility, though. And you don’t have to agree with their opinion.

When you’ve heard from all sides, it’s time to make your decision.

Frequently Asked Questions

How can I overcome groupthink when debating an executive decision?

If staff tend to consensus, then build in some healthy conflict. Take both sides of a decision and assign two people to argue a case for each side.

How can I speed up the executive decision-making process?

Set deadlines for each stage and keep to them – including the date for your final decision.

How can I get others’ input, without losing control of the decision?

Be clear that you’re asking people for their insights and thoughts, not giving them a vote on the final decision.

How can I make executive decisions more manageable?

Break big decisions down into smaller ones. Consider: Do these need to be made by others before your input is needed? Or will that slow the process down too much?