Decision Making

Having mentioned accountability before, it is interesting to note the recent European Constitution discussions, in that there is a big focus on decision making. Some countries' parliaments have decided on behalf of the country, other countries have decided to let their people say in a referendum. There are arguments for and against referendums in various circumstances, and they make for interesting reading.

Having elected a government, should you trust them to make the right decisions? If you elect a government based on their manifesto, are they only allowed to do what they wrote in their manifesto (and thus extra decisions need to be voted on)? and so on.

Its interesting from a leadership point of view to draw parallels with leadership styles -how much do you involve your stakeholders (or voters), how much do you listen to them and how much should they control what you do? Without a detailed analysis of the development of business's decision-making it seems clear that what has developed is supposed to be the most efficient.

This means that since there are so many stakeholders it might not be sensible for them all to have some say in how the business is run, but just to let those who should know best to make the decisions (presuming they are making them for the good of the business and not for themselves). A separation of the decision makers from the stakeholders can therefore be a good thing (within reason). However it might also be that if someone can create a better way for stakeholders to have their say, to create the right long vs. short term focus, to create an environment whereby different opinions can be discussed and somehow lead to an agreement then maybe the decision making in businesses would change.

So far, no-one has managed that. For a start, stakeholders are so numerous, with such varied motives and powers that its nigh impossible to create an agreement amongst them. Most businesses are based on the idea that 1 set of stakeholders (shareholders) hold the most power and the rest voice their opinion in a less direct way (through the media, through consumer groups, through lobbying, through buying or not buying etc).

However, as some countries political leaders are realising the internet can be used to create forums for discussion, to create opportunities for feedback and to create much easier ways to 'vote' on decisions. In that, if it takes months or years to organise an election physically, it could be done virtually in minutes with the promotion/education not requiring printing or distribution and with the administration of a vote done online with automatic counting. Thus should leaders embrace the internet to look into new models of decision making?

Its clear that there is a delicate balance between everything: between voting on every minor decision and not voting at all are 2 extremes. Voting on a new CEO but not voting for the Head of Asia for example is a narrower line.

Leaders certainly need to engage with stakeholders and take their opinions into account when making decisions; and leaders must use their own judgment to decide what opinions to listen to and what weight to be placed on each. Indeed, an element of objectivity is often crucial, if not impossible to actually possess.

When you are making decisions, who will they impact? who will have a say in them? who are you listening to and what biases are distorting your vision? Is your decision-making style consultative or dictative?