CEOs need to demonstrate strong leadership and good decision-making skills, but CEOs with over-confidence can involve their companies in riskier ventures and put investors’ funds at risk, according to a new study from the University of Missouri, Georgia Tech University and the University of Texas-Arlington.
One of the toughest balances that leaders face is having enough self-confidence to make difficult decisions when others disagree, while having enough self-awareness to recognize that they could be wrong and adjust accordingly. The key to me is not becoming emotionally attached to your decisions and actually going out of your way to test that a given decision might be wrong. Too many CEOs make a decision and are unwilling to reverse course when it is obvious a mistake was made. Even before you make a decision, you should attempt to play devil’s advocate.
I love the quote attributed to Alfred Sloan, the former CEO of GM, during a meeting where an important item was brought up for discussion. He said: “If we are all in agreement on the decision – then I propose we postpone further discussion of this matter until our next meeting to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about.”
Remember there is no decision unless there are at least two options. I’ll be writing a lot more about decision making in the coming weeks and months.