Money Matters

There Are 7 Types of Decision Making. Which One Is Best For You?


Nothing happens in business until someone makes a decision. These days, with the market moving at warp speeds, the timeliness of decision making is also critical. What might have been the right decision yesterday may be the wrong decision tomorrow.

Yet one of the most common complaints I hear as an advisor to businesses is that the decision process is arbitrary or broken.

The challenge is that everyone, including the experts, seems to have a different view of the right decision process, and when it should be used.

To put this into perspective, I found a good summary of the different levels of delegation and enablement in a recent book, Effective People Management, by Pat Wellington, who is an experienced international executive and consultant. She suggests the level of decision delegation should be commensurate with the experience and knowledge level of both the manager and the team involved.

If the team is very experienced, you should delegate more and move up higher on the following numerical scale for optimum decision effectiveness and speed:

1. Decide and announce.

One method is to review options in terms of objectives, priorities, timescale, and then autocratically decide on an action and inform the team of the decision. This approach will likely demotivate experienced teams, but may be required when time is of the essence. 

I once worked for a startup CEO who used this approach, even when time was not an issue. The result was a team that felt totally unappreciated, and productivity declined, to the point that our startup was no longer competitive.

2. Decide and then communicate to others.

Another option is to make the decision, and then explain to the team, the company, and customers the reasons for that decision and the positive benefits being accrued.

In this scenario, the decision becomes part of the team’s learning process, and the team’s confidence in you increases rather than decreases.

3. Present the decision and invite comments.

Presenting the decision along with the background, and inviting team members to ask questions and discuss the rationale, is another way to go. This more participative and engaging approach enables the team to appreciate the issues and implications at stake, and improves satisfaction.

4. Suggest a decision and invite discussion.

You can also discus and review a provisional decision on the basis that you will evaluate your team’s views before making a final decision. Thus, team members have real influence over the final decision, and can recognize their contribution has been appreciated.

5. Present the situation for input and joint decision.

An even more trusting process is to present the options to the team. Encourage and expect team members to offer ideas and additional options, and discuss implications of various choices. Asking team members to be highly involved and influential is always motivating for them.

6. Explain the situation and ask the team to decide.

It’s also valid to delegate responsibility for the decision to the team, perhaps with stated limits. In this approach, you may or may not choose to be a part of the team that decides. This process requires a mature team that can handle accepting major responsibility.

7. Ask the team to define the problem and make the decision.

With this approach, team members identify and analyze the situation, develop resolution options, and then decide on a preferred course of action. You agree to support the decision and manage implementation. This puts the team at the strategic decision-making level.

In my experience, first-time entrepreneurs and startups often operate near the top of this list, while larger and more mature organizations that run effectively operate near the bottom. If I see the opposite, I often find a dysfunctional business, or at least one which may not be agile enough to compete in today’s marketplace.

What does this mean to you? You must pick your role and your process, based on your own motivations and expectations. It also means that you must be prepared to change and adapt as the organization evolves.

Are you at the right place in the right organization to be effective, satisfied, and motivated to make the decisions that need to be made?

More Info: