Latest / The Science of Leading / Why Smart Leaders Make Messy Decisions
Transcript
- 0:00Welcome to the show-Edwin, I want to start with a leadership behavior
- 0:04that gets rewarded constantly and probably shouldn't: answering too fast.
- 0:08There's this moment where a leader jumps in with,
- 0:12"Here's what we're doing," and everyone thinks,
- 0:14okay, that's decisiveness.
- 0:16But I'm starting to wonder if we're just rewarding speed over actual
- 0:20thinking.
- 0:20That confusion happens a lot.
- 0:23Speed gets mistaken for certainty.
- 0:26Sometimes it is decisiveness, but often it's just rushed judgment presented
- 0:31confidently.
- 0:32And because it sounds clean in the moment,
- 0:34nobody challenges it.
- 0:34And that's the expensive part.
- 0:37It looks like leadership in real time.
- 0:39Then three months later you realize nobody tested the assumptions,
- 0:43nobody named the trade-offs, and now the team is stuck executing a bad
- 0:46decision that felt good for about thirty seconds.
- 0:46Exactly.
- 0:50And the data on this is fairly sobering.
- 0:53McKinsey asked senior executives about strategic decisions,
- 0:57and seventy-two percent said bad decisions were about as frequent as
- 1:00good ones, or even the norm.
- 1:02That tells you this isn't a fringe issue-it's built into how many
- 1:02organizations
- 1:07operate.
- 1:07Seventy-two percent is... uncomfortable.
- 1:11If that many leaders admit decision quality is inconsistent,
- 1:15then the issue probably isn't intelligence.
- 1:17It's something structural.
- 1:17Yes.
- 1:19Not intelligence-process.
- 1:21Smart people can still create very poor decision environments.
- 1:25Especially in unstructured meetings.
- 1:27One person dominates, someone introduces a late anecdote that shifts
- 1:32the direction, and then the leader calls it "alignment." It isn't alignment.
- 1:36It's social pressure.
- 1:36Social pressure with slides.
- 1:40That's basically half of corporate decision-making right there.
- 1:43So when we say "slow down," what does that actually mean?
- 1:46Because leaders hear that and assume it turns into more meetings and
- 1:49more overhead.
- 1:49It doesn't require more meetings.
- 1:52Usually just a bit more discipline.
- 1:54First, define the decision in one sentence-not the topic,
- 1:58the actual decision.
- 1:59Second, separate facts, assumptions,
- 2:03and preferences.
- 2:04Those get blended constantly.
- 2:06Third, clarify roles: who recommends,
- 2:09who decides, who needs input, and who simply needs to be informed.
- 2:14That structure might add ten minutes,
- 2:16but it can prevent months of rework.
- 2:16So the goal isn't to make leaders
- 2:20slower.
- 2:20It's to stop them from being fast in the wrong direction-like rushing
- 2:24toward an answer before the question is even clear.
- 2:24That's exactly it.
- 2:29Good decision systems don't eliminate speed.
- 2:32They protect it.
- 2:33They make sure the organization moves quickly after the logic is clear,
- 2:37not before.
- 2:37This is where the McKinsey framework helps,
- 2:40right?
- 2:41Because not every decision needs the same level of structure.
- 2:44There are big-bet decisions, cross-cutting ones,
- 2:46delegated ones, and then the quick ad hoc calls.
- 2:46Yes,
- 2:50and problems start when leaders treat all four the same.
- 2:53A big-bet decision-like entering a new market or restructuring-needs
- 2:58rigor.
- 2:58More options, clearer assumptions,
- 3:01visible risks.
- 3:02Cross-cutting decisions fail because no one owns the seams between teams.
- 3:07Delegated decisions should stay close to the work.
- 3:10And ad hoc decisions need to stay lightweight,
- 3:13or they slow everything down.
- 3:13The "seams" point is real.
- 3:17In cross-functional decisions,
- 3:18that's exactly where things fall apart.
- 3:20Everyone assumes someone else owns the hard part.
- 3:20And that's why decision
- 3:25rights matter.
- 3:25Who recommends, who decides, who can veto,
- 3:29who owns execution.
- 3:30Without that clarity, cross-functional work becomes performance rather
- 3:34than progress.
- 3:34And none of these tools are particularly glamorous.
- 3:38Decision rights, an executive sponsor,
- 3:40a devil's advocate, an assumption check... it's not exciting,
- 3:44but it's the difference between thinking and improvising.
- 3:44The devil's
- 3:48advocate is especially important.
- 3:50Not someone who argues for the sake of it,
- 3:52but someone responsible for testing the logic.
- 3:55What would have to be true for this to fail?
- 3:58Which assumption carries the most risk?
- 4:01What evidence would actually change our minds?
- 4:01That last one-what evidence
- 4:06would change our minds-that's the line.
- 4:08Because once a team can't answer that,
- 4:10they're not deciding anymore.
- 4:11They're defending.
- 4:11Exactly.
- 4:13And to make this repeatable, there's a simple loop I find useful: Listen,
- 4:18Analyze, Act, Learn.
- 4:20Listen means gathering the right inputs,
- 4:23not just the loudest ones.
- 4:24Analyze means testing assumptions and alternatives.
- 4:28Act means making a clear decision with ownership.
- 4:31And Learn means coming back afterward to evaluate what happened.
- 4:35Most teams skip that last step,
- 4:37which is why they keep repeating the same mistakes.
- 4:37Right-if you skip
- 4:42Listen, you're blind.
- 4:44Skip Analyze, you're impulsive.
- 4:46Skip Act, nothing happens.
- 4:48Skip Learn... you just keep thinking you're getting better when you're
- 4:51not.
- 4:51That's a fair summary.
- 4:51I saw this play out in a really ordinary way.
- 4:57A leadership team kept debating whether to centralize customer support.
- 5:01Weeks of models, cost analysis,
- 5:03service levels.
- 5:05And eventually someone realized the real decision wasn't about structure-it
- 5:09was about what they were optimizing for.
- 5:11Consistency, speed, or customer intimacy.
- 5:15We never defined that upfront,
- 5:17so everything else was noise.
- 5:17That's a classic case.
- 5:21Teams think they have a decision conflict,
- 5:24when in reality they have a question-definition problem.
- 5:27I've seen similar situations where entire discussions shifted once the
- 5:31real constraint was named.
- 5:33Until then, everyone is solving a slightly different problem.
- 5:33Let's talk
- 5:38about traps.
- 5:39Confirmation bias is obvious-falling in love with the first good story.
- 5:43But after a bad outcome, I see leaders swing the other way and start
- 5:47centralizing everything.
- 5:47Yes, a kind of overcorrection.
- 5:51One decision fails, and suddenly every decision needs senior approval.
- 5:55It feels responsible at first,
- 5:58but it quickly slows the organization and weakens accountability.
- 6:01People stop deciding and start escalating.
- 6:01Which turns into an entire
- 6:07culture of forwarding problems upward instead of solving them.
- 6:07Exactly.
- 6:11Delegation only works if boundaries are clear.
- 6:14What you own, what level of risk you can take,
- 6:18when to escalate.
- 6:19Without that, people either freeze or escalate too early.
- 6:19And on the cross-functional
- 6:24side, too many people in the room can actually make decisions worse.
- 6:28There's this assumption that more perspectives automatically lead to
- 6:31better outcomes, but sometimes it just raises the social cost of saying
- 6:35the uncomfortable thing.
- 6:35Consensus is often confused with clarity.
- 6:39Consensus asks if everyone can accept the outcome.
- 6:43Clarity asks whether we understand who is deciding,
- 6:46why, and what success looks like.
- 6:49You can have perfect agreement and still have a very weak decision.
- 6:49And
- 6:54avoiding that clarity usually comes from wanting harmony.
- 6:57But not naming the decision owner doesn't remove conflict-it just delays
- 7:01it until execution, where it's more expensive.
- 7:01Exactly.
- 7:04Delayed conflict tends to compound.
- 7:07This is why structure isn't bureaucracy.
- 7:09Bureaucracy adds friction without improving thinking.
- 7:13Structure improves thinking so friction doesn't spread later.
- 7:16It protects decision quality and,
- 7:19importantly, trust.
- 7:19Because people can accept a tough decision if they
- 7:23understand how it was made.
- 7:24What erodes trust is when the process feels arbitrary or political.
- 7:24Yes.
- 7:30Once people believe decisions are arbitrary,
- 7:33they stop contributing their best thinking.
- 7:35At that point, decision quality declines even further.
- 7:35So maybe the real
- 7:40question isn't just whether a leader is fast or even whether the decision
- 7:44is right.
- 7:44It's what they're optimizing for-control,
- 7:47speed, certainty, or the long-term quality of decision-making across
- 7:51the organization.
- 7:51That's the more useful question.
- 7:54And if you're thinking about how to bring more structure into your own
- 7:57decision-making-without slowing everything down-you can test OAD's tools,
- 8:02including behavioral frameworks,
- 8:04for free at o-a-d-dot-a-i.
- 8:06It's a practical way to make decisions more consistent and more reliable.
- 8:06Which,
- 8:11at the end of the day, is what people actually want.
- 8:14Not just fast decisions-but better ones.