10 Rules of CEO Decision-making: Part 2

10-rules-of-ceo-decision-making-part-2

I’m sharing 10 rules of decision-making for CEOs, which have helped guide me through the years. In my last post, I covered the importance of determining whether it should be the CEO’s decision in the first place, making the decision quickly, having a devil’s advocate for every decision, and being willing and able to change the decision quickly if warranted. Rules 5-7 concern the role of communication in decision-making.

Rule 5: Communicate your decision. I have seen many CEOs who have a discussion with one person and make an important decision, but then don’t communicate it clearly to everyone in the organization who is affected. Decisions are the fuel that drives action in an organization. Without this clear communication, it takes valuable time for the decision to leak out to the rest of the organization and, just like a children’s game of telephone, the decision and its motives are often changed in the transmission process. When you make a decision immediately, communicate that decision to everyone impacted by it. Don’t force other people to communicate your decision. You made it, you explain to everyone what you decided.

Rule 6: Communicate why you made your decision. In addition to communicating clearly what your decision is, you should also communicate the basic reasoning you used to reach that decision. This is an opportune time to reiterate your mission, vision and goals to the organization. For example, if growth over profits is a core tenet for the organization and you make a decision in line with this, you must remind people of it. In turn, your team will more easily make future decisions that support your core principles. By constantly reiterating them, you will enable employees to consistently act in a way to promote those principles. Over time, fewer decisions will reach your desk, because employees will understand your vision and make the right decisions that support it.

Rule 7: Make your people take a position. When a decision comes to your desk, it is highly likely that someone in your organization knows more about the issue than you do. You pay people to be experts in their area, so you should not allow executives to bring issues to your desk without proposing a well thought out position. Your job is to then push and prod on that position. Check to make sure they have considered all factors. If the issue can be quantified, have they run the numbers and made reasonable assumptions? What is the worst case? Does the decision take into account the interests of all stakeholders, customers, and employees? By being thorough in your questioning, you will teach your team to put in the work ahead of time that gives you the best possible information for making a decision.

In my next post, I’ll wrap up this series with rules 8-10.

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