How to Establish a More Transparent Decision-Making Process

Decision Making: A Flawed Approach

“Our say is so far removed from our do!” lamented an executive earlier this spring. In other words, executives were making decisions that violated the company’s values. Equally problematic was the decision-making process itself. In a culture where consensus supposedly reigned supreme, company leaders followed a nearly authoritarian decision-making model.

Unfortunately, a top-down approach to decision making is not unique to that company. Executives are under pressure to make well-informed decisions while also acting quickly. Effective executives learn how to balance these competing demands while those motivated by fear or a lust for power often pretend to value others’ opinions when, in reality, they make whatever decision suits their needs at the moment.

The risks of this approach to decision making were evident when Jurgen Schrempp took over as CEO of
Daimler. His first goal was to tame the fiercely independent Benz CEO and board by folding the Mercedes subsidiary back into the Daimler corporate structure.

But, Schrempp did not want to present his preferred solution for the Benz board as the only option. For
this reason, he offered a variety of choices to stimulate discussion, allowing people to talk while all along steering the discussion to the option he wanted.

Schrempp believed that providing multiple options would dispel the notion that he was somehow forcing a decision onto the junior executives. In reality, however, his junior executives recognized the manipulation, resented it, and responded by not only opposing Schrempp’s decision but by refusing to implement it.

Schrempp pretended to consult his executives and paid dearly for this charade.

Decision Making and Conflict

One reason for such charades is a desire to avoid conflict. Even executives who have reached the pinnacle of their careers may fear conflict or believe that allowing conflict makes them appear weak and indecisive.

In fact, the opposite is often true. Employees and managers respect executives who are open to their ideas and who are able to tolerate disagreement. As authors Russo and Schoemaker argue in Winning Decisions, “Too little conflict is as dangerous to a decision-making group as too much conflict.” The point is not to avoid disagreement but to encourage a healthy, respectful debate, “Moderate task conflict and low relationship conflict is the decision-making ideal. Only then are groups likely to outperform individuals.”

In other words, an effective leader learns how to manage conflict and knows when to let the discussion proceed and when to close debate and allow the group to make a decision. A sound process increases the chances of making a decision that will benefit the organization and allow everyone involved to feel heard and validated.

To learn more about effective decision making and read a more detailed account of Jurgen Schrempp’s missteps as CEO of Daimler, please click the graphic below to download our free white paper.

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