CEOs are called upon to direct and grow a company. They must cast a vision, build a plan, and get everyone on board to execute that plan effectively. Ultimately, a CEO’s work is to make big decisions for the company.
The challenge you face as the CEO is to make better decisions, with the information you have, weighing all the factors, and considering all the implications. And there are so many decisions to make daily—probably more than most people realize!
The weight of that responsibility would keep some people awake at night as they ponder the possibilities and fret about the factors. However, decisions still need to be made and delaying those decisions serves no one.
If you want to excel in your position, one of the most important skills you can learn and refine is: better decision-making. How can you make better, faster decisions?
Decision-making is a skill that you can hone, just like any other skill, and it will serve you well in your years as CEO.
So, how do you improve your decision-making skill? One of the most powerful things you can do is build a framework through which you run all decisions.
You see, most decisions that CEOs make are complex. They have far-reaching implications, and there is so much information to collect that will influence the outcome of the decision. But, if you create a decision-making framework, you break a big, complex decision down into smaller decisions.
- Instead of having to make one big decision, you make several smaller ones
- Instead of wondering if you have all the information to need, you collect information around the smaller points in the framework
Here’s the framework I’ve developed and use daily in the companies I’ve run. Use it as a starting point for you (but you may need to adjust it for your situations, such as if you have regulatory bodies or shareholders that may impact or be impacted by your decisions.
Step #1. For any decision you have to make, start by asking the key question. Ideally, it’s a question that prompts a “yes” or “no” answer (“Do we invest in building a new headquarters?”).
There may be times when you want to ask a question that doesn’t have a “yes” or “no” answer (for example, maybe you are deciding whether to build a new headquarters in Atlanta Georgia, Columbus Ohio, Orlando Florida) but in that case you are ultimately trying to make 3 decisions that end in a yes and two no’s.
Step #2. Ask questions about the stakeholders who are impacted:
- What does it do for customers?
- What does it do for employees?
- What does it do for the company?
- What does it do for the owners?
These are smaller questions that require a combination of research and creative thought.
Step 3. Ask questions about the potential costs and benefits:
- Does it overcome a weakness?
- Does it provide a return on investment? (How much?)
- How much time will it take?
Again, these questions require a combination of research and creative thought.
Step 4. Use the answer to each of those questions to help you reach a “yes” or “no” conclusion to the answer you asked in Step 1.
In my experience, you’ll end up with a few different possibilities of answers:
- For some decisions, you’ll reach a clear “yes” or a clear “no” and can move forward confidently.
- For some decisions, you’ll realize that you don’t yet know the answer and it will prompt you to go back and collect more information. (This is a better approach than the all-too-common approach of waiting and hoping that you have all the perfect information up-front to make a decision; this framework helps you identify what information is still missing.)
- For complex decisions (such as the headquarters scenario I posed earlier where you had to choose between three possible locations) turning it into multiple “yes” or “no” decisions can help you eliminate some possibilities and highlight the key differences between any remaining possibilities.
As a CEO, your job is to make decisions, and the expectation is that you make great, fast decisions. A powerful approach to making better, faster decisions is to start with a framework that simplifies your decision-making and clarifies the components that go into that decision.
Is this framework perfect for every situation? Of course not. No framework is 100% perfect. However, it’s a starting point (that you can modify for your situation) to help you make better, faster decisions. Start with this framework and train your team to use it too.
Read the full article from CEOWorld HERE.
Don’t YOU want to boost your expert status and play against the big companies?
Learn how at the Service Business Edge: The Secret Blueprint To Growing Your Business.