The Art of Leadership and Decision-Making – Realizing the Aspect of Time
An important element to consistent business success is the implementation of an effective decision-making process in a business. That process can lead to a structured and sometimes time-consuming approach to making decisions, and that often is a very good thing. However, leadership and decision-making are intertwined. An important part of the art of leadership is understanding the aspect of time with regard to decision-making.
An example of that art is described in Louis Gerstner’s book, Who Says Elephants Can’t Dance? In 1993 Louis Gerstner was brought in as Chief Executive Officer of IBM when it was nearly bankrupt after having its most profitable year in 1990. The rapidly changing computer industry had eclipsed IBM, and the company was dissolving into separate and divergent units. Most observers thought Gerstner would preside over this dissolution, but Gerstner made a decision that the company should become a customer-focused provider of computer solutions. Gerstner took his first 100 days to make this decision. Despite pressure from all sides to make a more immediate decision and take quick action, Gerstner took the time to observe IBM operations, review the governance system, and understand the culture of the company. At the 100 day mark, he announced his decision to keep IBM together and not spin off various units of the business. This decision determined the course to take on governance, strategy, and culture. During Gerstner’s tenure as CEO from 1993 to 2002, revenue increased from $64.5 billion to over $85 billion, net income increased from -$5 billion to 7.7 billion, and the stock price increased from $12.72 to $120.96. Making the decision too soon would have diminished the impact, and waiting too long would have irreparably damaged the company.
The polar example is offered by the common business experience of a decision taking over 100 days when the decision did not merit consideration for more than a day. A decision not made can leave a business dangling with decreased morale and uncertainty. A timely decision can inspire and influence action. A tardy decision may be too late to create the action and momentum necessary to meet a goal. How often have we seen the need for a decision and had the void remain for some time? Certainly, a decision can be made too soon, without adequate information, and inflict damage on the business. But the decision that is not made when needed can cause even more damage. The art of leadership is often knowing how much time to take in making a decision.
The inability to make a decision is often caused not by procrastination, which is a product of fear. Anxiety about making the wrong choice can make doing nothing appear to be an appropriate option. For truly watershed policy decisions – decisions that determine all of the goals for a company – care and time need to be taken. In the current economic environment decisions not altering the course of the business need to be made quickly.
Having the ability to revise a decision can make it easier to allow less time to make the decision. Dynamic planning allows the revision of goals and actions such that they remain reasonable based on the experience of the company in trying to reach stated goals. With dynamic planning, the format of the plan communicates the goals, actions to be taken, progress of the actions, and revisions to the goals as the events occur. The format can be a simple spreadsheet or a software program such as Microsoft Teams. The important aspect is that in making decisions throughout the business a group decision-making process is used and that all planning events are known. When a goal is set by the policymaking group, the goal is communicated to all who will work toward achieving the goal. When the executive group determines the actions to be taken to reach the goal, those actions will be known by all involved. As the actions are monitored and the progress toward meeting the goal is experienced, the need to adjust the goal to maintain its reasonableness will become apparent from monitoring information available to all involved, and that decision can be made through the appropriate group and communicated through the dynamic plan format. There is no need to have an annual retreat and determine goals that will remain unchanged until the next strategic planning event. If a decision needs to be changed, it can be changed through the decision-making procedure, be effective, and be communicated immediately.
With a dynamic planning format, the time taken to make a decision will still be a leadership art, but for the normal course of business decisions the ability to revise decisions and keep goals reasonable means that most decision-making will be done quickly in a highly visible manner.