Thursday, July 15, 2010

Key Factors in Strategic Decisions: Decisiveness, Timeliness and Risk

I just finished a brief article written for the McKinsey Quarterly by Anne Mulcahy, the chairman and former CEO of Xerox. They had asked her to reflect on strategic decision making. One of the points she made in her article dealt with timeliness of decisions. She said "Decisiveness is about timeliness. And timeliness trumps perfection. The most damaging decisions are the missed opportunities, the decisions that didn't get made in time.... all the decisions you didn't make because you missed the window of time that existed to take advantage of the opportunity."  There are a lot of lessons there for management and HR in that statement. Have you missed a great hire because you took too long to make a decision? Have you dealt with a major lawsuit because you did not address a problem, such as harassment, until it was too late?

She also made the comment "These days, everyone is risk averse. Unfortunately , people define risk as something you avoid rather than something you take. But taking risks is critical to your decision-making effectiveness and growth..." She made a comment as well that exemplfies many HR departments "... we got very conservative, very risk averse, and also too data driven."

Have you avoided making a decision because you wanted to look at one more candidate? Avoided firing someone because you wanted to give them "one more chance"? You need to remember that decsions have "shelf lives." The cure for this is to put tight timeframes on your decision-making process. Collect only some much data and avoid "paralysis by analysis." Only solicit so many opinions and do so from a balanced group of people some of who have a stake in the decision and from some that don't.

And lastly remember to listen to your own "inner voice." As Mulchay says "... when trying to take the bias out of decision-making, you need to be really cautious NOT to take instinct, courage and gut out as well." (my emphasis). If you have any mileage on you at all you experience, skills and knowledge that you should listen to. So don't discount your ability in making key strategic decisions.

Can anyone provide an example of a missed opportunity for lack of timeliness or due to risk averse behavior?

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