The breadth of issues new CEOs are forced to deal with on a daily basis often surprises them. One minute they are discussing a new product, the next a building lease, and then a legal issue. It is impossible for anyone to be an expert in all of these areas. However, the one thing the CEO is responsible for is MAKING a decision, which is the fourth key responsibility in this series.
The buck stops at the CEO’s desk. That is the job. If you don’t like making decisions when you aren’t sure of the correct answer, don’t take a CEO job. Many problems require a solution that impacts multiple departments, and only the CEO can make decisions horizontally across the organization.
I have seen CEOs who try to put off decisions hoping they will get more information to make it easier. Unfortunately, while they are looking for more information, the employees are sitting on their hands waiting for direction.
Colin Powell, the former Secretary of State, is famous for his 40-70 rule. He said that a leader should make a decision when he has between 40% and 70% of the information available. If they make the decision with less than 40% of the information, they are shooting from the hip. But waiting for more than 70% of the information delays the decision unnecessarily.
While a CEO can make both mistakes, I have seen more CEOs who wait way past 70% and hurt their organization’s productivity. Your job as CEO is to make the tough calls; don’t wait too long to pull the trigger. The CEO is held responsible for not only any decision that is made, but also for any decision that is not made. Failing to take action on an obvious issue is just as bad if not worse than making a bad decision.
Everyone else in the organization can pass the buck from time to time, but the CEO must make the final decision when no one else will or can.