The jour­ney of the chief de­ci­sion maker

It was a tu­mul­tuous time in the busi­ness, when I took my first CEO po­si­tion. The dot-com bub­ble had just burst, im­pact­ing our bot­tom line. I needed to hire a new division head, and re­ceived the same re­fer­ral by sev­eral sources. They were sell­ing this cand

Inc. (USA) - - INNOVATE - By Sam Reese CEO, Vistage World­wide, Inc.

In ad­di­tion to im­prov­ing re­sults, I was ea­ger to cre­ate align­ment and in­still team spirit, so I short- cir­cuited my vet­ting process. I’d started with a num­ber of can­di­dates, but I only in­ter­viewed this one. Ev­ery­body was ex­cited about this hire. How­ever, within a week, I re­al­ized I’d made a mis­take. My hire had 100% pop­u­lar sup­port, but was also 100% wrong. He turned out to be toxic to our firm and could have ru­ined the com­pany. This ex­pe­ri­ence taught me a big les­son: the im­por­tance of de­vel­op­ing and stay­ing true to a de­ci­sion-mak­ing process. A sur­vey by McKin­sey Quar­terly found that 60 per­cent of ex­ec­u­tives make bad de­ci­sions as fre­quently as good ones. That stat shows that there’s room for im­prove­ment. I would ar­gue that if you want to be a high-per­form­ing CEO, you must de­velop a core com­pe­tency in de­ci­sion-mak­ing. I be­lieve that all CEOs need to ex­pe­ri­ence this shift, rec­og­niz­ing that how they ar­rive at a de­ci­sion is just as im­por­tant as what de­ci­sion they make.

The four drivers in evolv­ing de­ci­sion-mak­ing as a dis­ci­pline

To­day, as an ex­pe­ri­enced CEO, I ap­proach de­ci­sions dif­fer­ently. I treat de­ci­sion-mak­ing as a dis­ci­pline and con­sciously ap­ply a struc­tured frame­work when mak­ing choices. My ex­pe­ri­ence has re­vealed four drivers that in­flu­ence the evo­lu­tion of the chief de­ci­sion-maker: pur­pose, mind­set, rigor, and time and space. The new CEO and sea­soned CEO tend to re­spond dif­fer­ently to these drivers. It took many years to de­velop and re­fine my ap­proach, but it al­lows me to make bet­ter de­ci­sions, faster.

1. Ground your­self in pur­pose

If you’re a new CEO, you may have de­vel­oped a form of tun­nel vi­sion, fo­cus­ing on only your depart­ment’s goals in­stead of the big pic­ture. When you step in to the CEO role, you have to think about what ben­e­fits the com­pany as a whole. That’s one of the big distinc­tions that comes with mov­ing up into the CEO role. The com­plex­ity makes de­ci­sion­mak­ing more chal­leng­ing, re­gard­less of com­pany size. It’s also dif­fi­cult to make de­ci­sions if you’re un­clear what your com­pany stands for. Hav­ing that fil­ter is vi­tal for me. When I’m eval­u­at­ing a de­ci­sion, I al­ways ask my­self: Does this de­ci­sion align with my com­pany’s mis­sion, vi­sion and pur­pose? Will it ben­e­fit the or­ga­ni­za­tion as a whole? Does it ac­cu­rately re­flect our val­ues and be­liefs? If I can an­swer “yes” to these ques­tions, I know I’m on the right track.

2. Shift your mind­set

A less-ex­pe­ri­enced CEO might hold a lim­it­ing be­lief that there’s only one right an­swer to any given sit­u­a­tion. Ex­pe­ri­ence tends to show that good choices come from thought­ful pro­cesses, and that there’s more than one right an­swer. It’s lib­er­at­ing to re­al­ize there are many op­tions, and the best one is the one in which you’ve in­vested the time, en­ergy and com­mit­ment. Putting ego aside is also im­por­tant. Over time I’ve de­vel­oped the aware­ness to check my ego and make de­ci­sions based on their im­pact on my com­pany. A com­pany-first men­tal­ity pro­vides the clar­ity and hon­esty to ap­proach prob­lem-solv­ing ef­fec­tively.

If I need to pivot or change a de­ci­sion, I no longer worry how this will make me look, as I’m do­ing what’s best for the com­pany. That’s oper­at­ing with in­tegrity, and de­ci­sions that you make with in­tegrity are the ones you can sleep with.

3. Ap­ply rigor

You know you’re off track when every de­ci­sion feels like start­ing over. When you treat de­ci­sion-mak­ing as a dis­ci­pline and ap­ply rigor, you won’t feel like you’re start­ing from scratch each time. Rigor has al­lowed me to make de­ci­sions faster and with more ac­cu­racy. Part of the rigor is seek­ing in­put from oth­ers — es­pe­cially those who think dif­fer­ently from you — while un­der­stand­ing how to fil­ter and syn­the­size the in­sights you re­ceive. Your ten­dency may be to talk to as many peo­ple as pos­si­ble about the sit­u­a­tion and then make a de­ci­sion based on what the ma­jor­ity says. My dis­as­trous hire reveals a po­ten­tial pit­fall in re­ly­ing on ma­jor­ity opin­ion. In my ap­proach now, I lis­ten to other peo­ple’s opin­ions but process them dif­fer­ently than I did as a young CEO. I treat them as in­puts in­stead of in­struc­tion and make sure that every de­ci­sion I make is uniquely mine.

I also en­sure that I have enough con­text to make an in­formed de­ci­sion. You have to un­der­stand at least some of the de­tails; oth­er­wise, you run the risk of re­ly­ing too much on as­sump­tions. Ap­ply­ing rigor to out­side in­put makes the de­ci­sion-mak­ing process eas­ier be­cause it gives me clar­ity and di­rec­tion.

4. Al­low for time and space

A high-pres­sure work en­vi­ron­ment, cou­pled with the scarcity of time, can cause a new CEO to make de­ci­sions in a hasty or hap­haz­ard way. As a new­comer to the C-Suite, I didn’t al­low my­self the time and space to tune out the noise and fully process a de­ci­sion. I have since learned to slow down and des­ig­nate time to process de­ci­sions with­out in­ter­rup­tion. I treat de­ci­sion-mak­ing as a marathon in­stead of a sprint. I set aside a chunk of time every day to en­gage in quiet re­flec­tion and work through de­ci­sions. Don’t be afraid to tell peo­ple, “This de­ci­sion is go­ing to take some time.”

De­vel­op­ing your de­ci­sion-mak­ing process

When I’m mak­ing a de­ci­sion, I ap­ply a process that’s based on three core prin­ci­ples: • I pay at­ten­tion to my instincts, lis­ten­ing to my gut with­out over-in­dex­ing.

• I ex­er­cise judg­ment in my choices, draw­ing on data and ex­pe­ri­ences to reach con­clu­sions.

• The per­spec­tives of my peers, men­tors and em­ploy­ees in­form—

but do not dic­tate—my de­ci­sions.

This is not a se­quen­tial process but rather a fluid one, where the three prin­ci­ples work in tan­dem with each other. I know I’ve reached a good de­ci­sion when it passes the “MVP test”: It aligns with the mis­sion, vi­sion and pur­pose of my com­pany. Let me share an anec­dote that stands in con­trast to the first story. Years ago, af­ter talk­ing through some busi­ness challenges with my CEO peers, I started to think about whether it made sense to cre­ate a CFO po­si­tion. I talked to col­leagues about my dilemma, thought about the fi­nan­cial im­pli­ca­tions of the hire, and lis­tened to my gut when re­view­ing my op­tions. I stuck to my vet­ting process. Ul­ti­mately, I de­cided to make the hire. It turned out to be one of the best de­ci­sions of my ca­reer. The CFO who I chose was worth his weight in gold. He made changes to the com­pany that in­creased its value ex­po­nen­tially. Just like every other CEO, I’m a work in progress. I still make mis­takes, but fewer than I used to, be­cause I in­vest time and en­ergy in my de­ci­sion-mak­ing process. The process out­lined here works for me, but is by no means the only way to make a good de­ci­sion. Take my drivers as in­puts to de­vel­op­ing your own. De­ci­sion-mak­ing is a process that’s unique to the in­di­vid­ual, so it’s im­por­tant to de­velop a model that feels au­then­tic to you. Af­ter all, it’s not the model that mat­ters most. What counts is that you rig­or­ously ap­ply a con­scious process that leads to bet­ter de­ci­sions — and bet­ter re­sults for your firm.

“Rig­or­ously ap­ply a con­scious process that leads to bet­ter de­ci­sions — and bet­ter re­sults for your firm.”

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