Over the course of time, CIOs, executive teams, and boards must make difficult decisions that have a wide-ranging impact on the company and its stakeholders. These are often exceptionally critical to a company’s business. When traversing these incredibly difficult decisions, there are several considerations to make.
The recent meltdown at Southwest Airlines is again raising several questions about decisions made by the Southwest executive team and board. I wrote a post on my perspective of the Southwest debacle here: https://avoa.com/2022/12/28/what-can-cios-learn-from-the-southwest-airlines-debacle/
In the case of the Southwest Airlines turbulence, is the issue their business model? Or is it their systems and processes? Or possibly their decision-making process? Quite likely it is a combination of all three.
One could pick apart their choices of business model and systems approach. However, both come down to how they make decisions at an executive level.
Start with the decision
First, start with the decision itself. This is where context comes in. Do not forget the strategy of the company, business model, objectives set by the board and executive team along with organizational capabilities. In the grand scheme of things and bringing situational awareness into the picture, one can better understand the timing for the most critical decisions. Be clear on what the decision actually is and why it should be discussed now.
Good questions to ask:
- What is the decision to be made?
- Why is this coming up now?
- Is it clear what the decision to be made is and ramifications?
- Does the rest of the executive team believe this is a decision to spend time discussing now?
One of the main reasons decision makers do not support a proposal for change is because they do not fully understand the ramifications…not because it is the wrong thing to do.
Socialization is a powerful tool
Quite often, socialization of the subject and reasoning is recommended before diving directly into a discussion about a critical decision. It provides individuals with time to digest and understand the upcoming discussion without putting them on the spot. It also provides time to research and consider alternatives instead of making a flip or misinformed decision.
Difficult decisions take time and often have a lot at stake.
For example, in the case of Southwest Airlines, if the decision were whether to upgrade a core system in the next 12-24 months, organizations need time to understand why, the impact, risk and ramifications.
It is not advisable to wait until the presentation, discussion and decision to introduce the subject. Socialization becomes a form of informing the decision makers and providing them with the tools to make an informed decision. Now, that is easier said than done and requires consideration of a number of factors before proceeding.
Six factors when making decisions
When considering difficult decisions, there are several factors to consider. Here are six key considerations executives should consider when proceeding down this path:
- Options. What are the potential options? There is often a myriad of permutations to this question. Focus on the most impactful and potential ones. Consider the aspects when offering a few options along with the recommendation…and why. The ‘why’ is a powerful argument in the decision-making process to increase buy-in and build consensus.
- Impact. Consider the impact, good and bad, of the decision. How will each potential decision outcome affect the company, its stakeholders, employees, customers, partners, investors? Articulate the impact in terms of business impact. Business is the universal language and critical for successful communications and informed decisions.
- Risk. What are the risks associated with making the decision. Conversely, what are the risks to not making a decision? Remember that not making a decision is still a decision.
- Context. Context applies equally to each of these considerations as it does the decision itself. What is the priority and why? What is the impact of the decision? Consider the upstream, downstream and adjacency impact. Remember that a decision should consider the context through a holistic approach. Squeeze air from one part of a balloon just moves it to a different part.
- Communication. Decision makers come with different backgrounds and lenses. One of the biggest mistakes presenters make is that they do not consider the perspective of their audience. For example, talking about technology or cybersecurity to a board is often met with blank stares. Neither subject is generally in their collective wheelhouse. Business impact and risk are. Go to where the decision makers are, do not expect them to come to you.
- Collaboration: Like the earlier discussion about socialization, collaboration is key. Critical decisions should never be an individual sport. Critical decisions are a team sport. Collaborating on decisions brings greater understanding and buy in. With the core system upgrade example, the CIO may lead the conversation, but would likely engage…and collaborate…with the CEO, CFO, COO, CHRO and board members on the technology and audit committee well in advance of any discussions around decision.
The causation of difficult decisions often has the greatest impact on a company.
The process of executive decision making is complicated and involves personalities, culture and external influences. The best decisions take these into account while ensuring that the stakeholders have a proxy in the discussion.
While these are just six considerations, there are more that executive teams consider. There are nuances to each that are often unspoken in the process but should still be part of the process.
There is an art to executive decision making. It is rarely a straightforward process and involves more than outlined in this post. However, considering these six will take the decision-making process a long way toward better outcomes.