Most leaders’ decision making is “ill-informed, outdated, and incorrect”

A 2005 study found that many leadership strategic decisions are based on, and I quote, “evidence that is ill-informed, outdated, and incorrect”.

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Yes, leaders are usually using the most up-to-date internal data from their various management information systems to make operational and tactical decisions, however when it comes to the underlying, and often hidden, deep structures of decision making, they are often “ill-informed, outdated, and incorrect”.

There are three types of decisions leaders make and two levels for these:

The 3 types of decisions

1. Operational – these are the day-to-day decisions, which will be second nature, if the leader has been in the industry any length of time. Additionally, the leader probably gained promotion on the back of their ability to read operational situations well.

2. Tactical decisions. These are the decisions that put the operational decisions into context and make them effective. Again these tend to be learned experientially and are often part of the leader’s daily repertoire of decision making.

3. Strategic decisions. These are the bigger ‘directional’ decisions about things like which markets to be in or what the direction of the organisation or department should take.

The problem most leaders have is that there are two levels of decisions.

1. Surface level and

2. Deep level.

Decisions taken at the surface level are based on the vagaries and luck of the experience the leader has had. Deep level decisions are made with an underpinning evidential framework or guiding philosophy. So for example the strategic decision to enter a particular market can be made at a surface or deep level:

1. Surface level strategic decisions would likely look like this: What is the market telling me? Where are sales dipping and where are they taking off? What are our competitors doing? Once I have this data I can then make a decision about which way to move. This sounds fine. However leaders with a deep understanding can do something else:

2. Deep level decisions have a deeper underpinning evidential framework gained, usually through research outside the organisation. For example, we know that there are seven levels of organisational development and our next move needs to help the organisation move up a rung. Due to the research, we know exactly what the next level will be and making the initial surface level decision will result in holding us at the same level organisationally. Additionally, just following the market isn’t enough. We need to start exploring the next curve. This framework enables us to do that and aligns with our next stage of development. This is a whole new level of analysis and decision-making which many leaders lack. It is not the operational, data-driven evidence of the surface level but a framework evidence-based, deep decision making.

Many leaders are making surface decisions without the real insight and benefit of the deep level hidden framework decisions to guide them.

Even if the leader has done an MBA or something similar the deep structure framework driven decision-making they learn on such programmes quickly lose their currency. Staying up-to-date with the latest deep level thinking and decision-making frameworks is not easy. Largely because it takes time and they are locked away in some of the 78,000 academic research papers published every month.

They can however sit back, relax and let the most up-to-date frameworks and thinking come to them with The Oxford Review.

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Read Next: The devastating effects of opinion-based decisions and how to change them into evidence-based decisions

 

References

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