Better Decision Making in Organizations
How do you make decisions? Do you base them on how you’re feeling, or do you base them on objective reasons? Knowing how we make decisions can help us understand how to best serve inside of our organizations, as well as how to manage that as leaders. So, in this episode, I’ll be discussing how decision making impacts the culture of our organizations, including the way we attract and retain talent.
What You’ll Learn In Today’s Episode
- The importance of clarity in the decision-making process within your organization. (4:40)
- How decision making impacts the way we attract and retain talent. (6:00)
- Why understanding your business strategy is key for improving your business’s decision making. (9:31)
Actionable Takeaway for HR Professionals:
- Understand what decisions are being delegated to HR and ensure they are being tied to the business strategy. (18:15)
Actionable Takeaway for Executives:
- Look at where you’re making your most important decisions and ensure you’re following through on what is decided. (17:50)
Ideas Worth Sharing“We always have a choice in the decisions that we make.” - Traci Scherck Click To Tweet
Resources In Today’s Episode
- PI Assessment
- Why Organizational Culture Is The Most Powerful, Practical Tool For Impact And What To Do About It
- Decision Making in the Age of Urgency
- Decision-Making: One of Our Greatest Challenges Today
- Predictive Index
- Become a Talent Optimization Foundation Member
- Elevated Talent Consulting Coaching
Enjoy the show? Use the Links Below to Subscribe:
Traci Scherck: I make recommendations and you make decisions, this is a quote from peloton instructor Dennis Martin.
Traci Scherck: And what Dennis is really stating is that every single recommendation somebody gives is truly a recommendation, because we always have a choice in the decision that we make and.
Traci Scherck: As you are listening in today first welcome to the talent optimization podcast my name is Tracy Scherck i’m the chief talent officer here at elevated talent consulting.
Traci Scherck: And I just want you to think about this, how do you make decisions do you make decisions.
Traci Scherck: Based on this gut feel or do you make decisions specifically based on very objective reasons for it and sometimes those objective reasons are because somebody told you to do it right.
Traci Scherck: And so often, we have to give ourselves permission to make a choice right and that choice is always what is that thing that we’re making.
Traci Scherck: And I want to offer you something before we dive into how decision making really impacts, the Culture inside of our organization, as we attract and retain folks to our organizations.
Traci Scherck: And what I want to offer you is the opportunity to take the predictive index behavioral assessment, the link is in the show notes, but there’s something on the pi called the E drive.
Traci Scherck: And what the drive essentially tells us is how do you typically make decisions do you make decisions based on your gut feel or do you make decisions based on that objectivity.
Traci Scherck: Because knowing how we make decisions naturally will really key us into how we can best serve inside of our organizations and how we need to manage that, as leaders.
Traci Scherck: And so, let me give you an example and i’ll first tell you where my E drive is is it’s pretty low on the predictive index meaning I tend to.
Traci Scherck: make decisions based on my gut and i’m pretty good at making those decisions based on my gut as well, however, I.
Traci Scherck: was out in Colorado springs at a conference this last week i’m speaking for an organization that was fantastic so shout out to the AMC Institute.
Traci Scherck: And so, with that specifically I wanted to go up the COP railroad in manitou springs, and so I went to hike up.
Traci Scherck: The incline and then I walked over to the railroad and I was going to go up the railroad and she’s like hey.
Traci Scherck: You know it’s three and a half hours, this is what it’s going to be, we, the train leaves in nine minutes I had about seven or eight people behind me and i’m going well, I think I need to move my car and she’s like yes, you do and i’m like.
Traci Scherck: So in that moment I froze and said fine I won’t you know, take the car railroad up to the top top of pikes peak and I ended up.
Traci Scherck: Not doing that right, and so, but that split second decision I had this pressure behind me others people behind me, I could tell she’s like make a decision, make a decision.
Traci Scherck: And yet, in my gut i’m like Oh, I want to go, but I didn’t want to face a consequence of having my car sit there too long and having to pay more for that right.
Traci Scherck: And i’m sharing this with you because that indecision cost me something I didn’t end up going on that trip.
Traci Scherck: When I was out in Colorado I didn’t in the building up the Colorado and it was something I really wanted to do.
Traci Scherck: And I tell this personal story to state that there’s times, where we’re being very objective Okay, what are the consequences of this, what does this look like versus subjective meaning.
Traci Scherck: I just want to go right, and you know the situations around us will change this a bit, but knowing what that natural inclination is.
Traci Scherck: helps us to know how we make decisions and what we need to do to prepare ourself for that, so my curiosity to you is how do you naturally make decisions inside of your organization.
Traci Scherck: And how does that impact, how you attract and retain folks so here’s what a recent forbes article stated it stated.
Traci Scherck: Individuals are more likely to be frustrated about a lack of clarity within the decision making process ill defined roles.
Traci Scherck: Poor communication and a myriad of challenges along those lines, and the opposite is also true when we have really good decision making happening inside of our organization people feel engaged.
Traci Scherck: it’s because there’s the open lines of communication there’s clarity and what needs to be done there’s purpose and work and there’s trust in the leaders and peers around them.
Traci Scherck: So this thing of lack of decision making and sometimes you know i’ve heard individuals called flip flopper.
Traci Scherck: You know leaders inside of organizations and i’ve also you know worked with individuals inside organizations that are so clear on what are the decisions that we’re making.
Traci Scherck: Right and what does that look like and there was a recent article and study that was.
Traci Scherck: Specifically, looking at how decisions are specifically made and what that specifically looks like in organizations, and this was a McKinsey study.
Traci Scherck: And here’s the deal only 20% of respondents say that their organizations excel at decision making.
Traci Scherck: isn’t that interesting only 20% believe that their organizations accelerate decision making.
Traci Scherck: And while most organizations seem to make the trade off between velocity how fast we’re going to go ahead and make that decision and the quality of the decision, meaning was that a good decision right.
Traci Scherck: And so faster decisions tend to be a higher quality suggesting that speed does not undercut the merit of a given decision rather good decision making practices tend to yield decisions that are both high in quality and fast.
Traci Scherck: And so, as you think about how you attract and retain individuals inside your organization, how do you make those decisions so that you can decrease the frustration.
Traci Scherck: I don’t know about you, but when I have to redo work four or five six times because someone else changes their mind on what that looks like I get really frustrated and that tends to become a cultural thing right.
Traci Scherck: We have some organizations that make decisions incredibly fast, however, they will change their minds, if it doesn’t work right and that works in some cultures.
Traci Scherck: In other cultures, when a decision is never made or when a leader never ever makes a decision it’s like well i’m stuck I can’t move forward with my work until this specific decision is made.
Traci Scherck: And that frustration, then leads to individuals to start to look at other places of employment because.
Traci Scherck: They don’t feel that they can have impact in their work or their voice isn’t heard, because a decision isn’t made that says yeah do that thing and move forward.
Traci Scherck: So it’s something really specific to think about how do you make decisions inside of your organizations and so there’s a couple different decision.
Traci Scherck: That we can make in different types of decision making that specifically happen.
Traci Scherck: And so we want to ensure that we make those decisions at the right level so, for example, does that executive always need to make that decision, so let me give you an example, and I think i’ve shared this before on the podcast.
Traci Scherck: But there is a cultural fit that we each have inside of our organization so.
Traci Scherck: For example, I worked for an organization that was a phenomenal organization, I was in the perfect role, however, the cultural fit inside this organization was a horrible fit.
Traci Scherck: And the reason being was i’m an individual That was really, really, really, really fast and inside of this organization in order for me to send a proposal out to.
Traci Scherck: A client, it had to be approved by like five different levels, including the Managing Director of the whole organization and i’m sitting here going oh my gosh I.
Traci Scherck: Am paid on Commission and i’m being asked to do this, but yet I can’t make a decision you’re not trusting me with that, so there was a cultural mismatch.
Traci Scherck: Great organization probably amazing for certain types of individuals, based on their behavioral styles and how they worked.
Traci Scherck: Not great for me right, so one of the questions is.
Traci Scherck: As we look at how decisions are made inside of the organization, how do we ensure the decisions can be made at that lowest possible level.
Traci Scherck: So individuals have the information that they need to make those decisions, but they also are given the trust and the autonomy to do that so that’s something that’s really important.
Traci Scherck: The next thing is that we really want to focus on.
Traci Scherck: What is that value right what is that value and here’s the deal only 41% of respondents say that their organizations decisions align with a corporate strategy and that they allocate human and financial resources towards high value projects.
Traci Scherck: What this really means is what is your business strategy.
Traci Scherck: When you know what your business strategy is and what your business outcomes are you can make decisions that allow you to take that business strategy and implement it into creating.
Traci Scherck: Those amazing business outcomes, what do we call that we call that a people strategy, but you have to have that strategy in place to make those really, really great decisions in to ensure that those decisions actually matter.
Traci Scherck: So when we’re making decisions one are we making them at the lowest level possible inside the organization.
Traci Scherck: To do those decisions align with what our organization is here to do right this alignment this value alignment, the strategy alignment is so important, otherwise.
Traci Scherck: We end up with scope creep going out in 20 different directions that doesn’t make sense to get us or business results.
Traci Scherck: What does that mean we’re frustrated we don’t feel like we’re making progress we’re not specifically aligned right.
Traci Scherck: And then that third kind of item that we want to look at when we’re making great decisions inside of our organization is commitment to the relative stakeholders right.
Traci Scherck: We want to ensure that we’re executing decisions once they’re made so if we say yes we’re going to do this thing we actually follow through with it all, all the way to the end right.
Traci Scherck: And we don’t make a decision try it for two weeks, then make another decision and then another decision, I see this so often with clients when they’re like.
Traci Scherck: yeah we decided to implement this specific curriculum and then we changed a year later, before we could even.
Traci Scherck: see what happened with it right, or we decided to implement this specific earpiece system, and then we changed it a year later, and no one really had their sea legs yet on what that specifically was.
Traci Scherck: So we need to ensure that we have you know the individuals aligned and that we can actually implement those decisions, because if we’re just making decisions changing our mind making decisions changing our mind we’re never getting to those specific business outcomes.
Traci Scherck: And so what does that specifically look like, let me give you two stories so as we’re talking about hiring and retaining staff inside of our organizations.
Traci Scherck: You know, one of those stories as i’m working with a specific client and the decisions about you know our salary structure, the decisions about our bonus plans, the decisions about amount of vacation that’s taken etc.
Traci Scherck: ends up changing considerably, depending upon who we’re talking to what ends up happening is that there’s some internal equity issues potentially inside of our organizations.
Traci Scherck: And we see this all the time with clients it’s like Oh, but this person needs, especially right now we’re in the middle that rate retention that great resignation that right swap whatever it is.
Traci Scherck: And we’re solving problems by throwing additional pto or money, specifically at the problem right now here’s the deal with that, if that is what we’re doing, are we really solving the issue which is.
Traci Scherck: You know hey this individual feels that they’re aligned that they’re valued inside the organization and that we’re consistent with what.
Traci Scherck: we’re doing, the answer is probably not and it from a human resources perspective we’re making it we’re making some potential.
Traci Scherck: Issues relating to internal equity relating to you know how are these things, implemented and what do they look like.
Traci Scherck: And I bring all this up, because you know those decisions that we make, yes, we want them to be fast, and we want them to be good quality decisions.
Traci Scherck: However, there is these ripples of consequences that impact an individual and how they are.
Traci Scherck: Wanting to contribute and really being engaged in their work, because if they feel diminished in what they’re doing based on other decisions that are happening.
Traci Scherck: This ripple throughout the organization and these ripples can be positive or negative, we want to create positive ripples based on those very specific decisions.
Traci Scherck: So I just really want you to think about what that looks like.
Traci Scherck: And here’s The other thing with decisions, how much time, do you think we actually spend making decisions according to our to this McKinsey study and, by the way, I will tie this in in the show notes that you have it.
Traci Scherck: Half a respondents report spending more than 30% of their working time on decision making and more than a quarter spent of the majority of their time on on decision making.
Traci Scherck: On average respondents spend 37% of their time making decisions, and more than half of this time was thought to be spent in effectively, so therefore.
Traci Scherck: Are we spending time to make decisions that is not being used to get us to the business outcomes inside of our organization.
Traci Scherck: And how do we fix that right, and so you know how we fix that is one ensuring decisions are made at the lowest level possible to ensuring that those decisions that we’re making tie back to the business strategy.
Traci Scherck: And that they are specifically tied to the business outcome and then three that we are committed to follow through on those decisions and the we value those stakeholders inside of our organization.
Traci Scherck: And that’s something really important to pay attention to right because those allow us to really see.
Traci Scherck: What specifically happening, and of course there’s psychology behind why we don’t make decisions, so if we take forever to make a decision it’s typically based on fear right.
Traci Scherck: And here’s the deal when we’re basing decisions based on fear of not making them we’re still making a decision.
Traci Scherck: And we’re not moving those things forward so you know this is from a psychology today article, but how can I balance my career my family obligations, so I don’t feel ineffective at both right.
Traci Scherck: And we want to be honest about where we’re falling short, because if I decide not to make a business decision what’s The reason is it because I don’t feel like I can do it well enough, is it because i’m not sure that the.
Traci Scherck: organization can get things forward is that i’m making this decision, because I don’t feel like I can get another applicant in the door.
Traci Scherck: In order to complete this role, and I just need this specific job to be done, so I make a decision, even though it’s not in the best interest of my organization right.
Traci Scherck: So when we’re making these decisions, we really need to pay attention to are we making it based on objective facts are we making it based on gut right.
Traci Scherck: what’s behind our lack of decision making and how do we specifically address that.
Traci Scherck: And then going from there, it is how do we increase our engagement by ensuring that we’re making the decision at the lowest level we’re paying attention to the individuals inside the organization that this specifically impacts.
Traci Scherck: And that is tied to what’s important to the organization, so let me tell you one more story, and this is a story about hiring individuals into an organization.
Traci Scherck: And so often when we’re recruiting folks you know it’s ensuring we’re making fast decisions are we going to make this offer, are we not going to make the offer, what does this look like around it.
Traci Scherck: But when we have individuals that fear or don’t make a decision based on our offering go back and forth, this is also a clue to us.
Traci Scherck: About are they going to make decisions once they’re in the job, or is this somebody that we’re really going to have to coach and bring up to speed right.
Traci Scherck: So just note that so, for example, do you have an individual that you make an offer it’s negotiated you make an offer it’s negotiated you make an offer to negotiate it then all of a sudden those negotiations are.
Traci Scherck: Actually I want $10,000 more here actually I want another week of vacation here, based on what they said at the very beginning of the conversation.
Traci Scherck: Yes, that can be great negotiation, but that can also lead you to really question what is their decision making.
Traci Scherck: And what does that look like, especially if you are internally aligned inside your organization because remember the decisions that we make have a significant impact on the team.
Traci Scherck: and on our clients and on the organization as a whole, so with that we will go ahead and talk about our key takeaways for today.
Traci Scherck: So for our executives listening in you know it’s really important to look at where are we making our specific decisions right are we making them at the lowest level possible.
Traci Scherck: And are we following through on the decisions that are being made so it’s so important that we use our voice to ensure that the voices are specifically heard.
Traci Scherck: When needed because they have an impact, and that we’re following through on those key decisions.
Traci Scherck: And then for HR individuals listening in understanding what decisions are really being delegated to HR so that you can make those key decisions.
Traci Scherck: and ensure that those decisions that you’re making are tied to the business strategy and, of course, tied to those business results.
Traci Scherck: and knowing hey if we have individuals on our team that are very, very objective decision makers and we have some that are very gut level decision makers.
Traci Scherck: that’s great to know so that we can slow down decisions when we need to, but we can also speed up decisions when we need to based on what those key factors are.
Traci Scherck: So with That being said, as we close out today’s conversation, you know and really thinking about what is the culture inside your organization and how does your decision making process.
Traci Scherck: impact that specific culture and is that the culture that you want to have, or do we need to take another look at how we make decisions.
Traci Scherck: And how that impacts our specific business outcomes so with that I hope that you have a phenomenal week and we can’t wait to see you back here next week and.
Traci Scherck: If you want to know hey what does this look like for me go ahead and take that predictive index assessment and you will see that in the show notes Thank you so much, and have a phenomenal week.