How To Make Good Decisions in Leadership


good decision making skills in leadership

We make decisions at work every day. Some big, and some small. Some good, and some bad. Working in a leadership position means that we are stepping into the office every day with an abundant amount of choices to be made. Being an effective decision-maker isn’t just a nice skill to have in this profession – it’s critical.

There are three groups of people involved in decisions – those who make them, those who must carry them out, and those who will be affected by them. As you can imagine, every different person in this process will have their own set of needs, wants, and desired outcomes. It’s your job as a leader to come to the most effective resolution that will cater to all three groups.

Decision-making styles

Every leader will have different decision-making styles. This can help or hinder a leader when making the right decision for their business or team. Before settling on which decision-making process is right for you, first, you need to figure out what your decision-making style is.

Most experts agree that there are four different decision-making styles. Each has its own set of unique understandings and challenges, and it can be incredibly insightful to understand which one best reflects yours.

Analytical style decision makers generally take the longest time to come to conclusions. They like to take their time, look at all of their options, and know their facts. However, if this is you, you may struggle to make a choice until you’re certain it’s the right one. Sometimes, when making decisions, you will never truly know if it’s the right choice until you’ve chosen. This can stall the process and be tiresome if a decision can’t be reached.

When you have a directive style, you don’t mind making quick decisions. If you are prompted to make a choice, you’re happy to make a decision then and there. You don’t like to dwell too much, which can have fast results. Whether those results are always the best outcome, however, is a problem you may face if you don’t take the time to think things through.

You are a ‘think bigger’ person, and the term ‘think outside the box’ was essentially coined for you. Conceptual decision-makers may find themselves drawn to different and creative approaches, and aren’t afraid to try something new. However, those in this category can also find themselves biting off more than they can chew, and if they don’t have a thorough plan to follow through with their big dreams, they can fall flat.

You are great at listening to and respecting the opinions, wants, and needs of everyone influenced by your decisions if you are a behavioral decision-maker. This is a particularly great soft skill in leadership, as empathy and understanding of your team will help you and them go far. This may cause you to ‘people-please’ however, and while best you try, you probably can’t please everyone 100% of the time.

Think critically and honestly about your decision-making style, and what sort of problems you might face in the decision-making process due to this. How can you make sure these don’t become an issue? Can you work with someone else with a different style to potentially balance it out? Be aware of what setbacks you may have going into this and have a plan ready to tackle them head-on.

Red flags

There are three ‘red flag’ conditions’ that could contribute to leaders making a poor decision through seeing invalid patterns in events and distorted emotions. These three red flags are as follows;

1. Inappropriate self-interest

2. Distorting attachments to people, places, or things

3. Misleading memories – memories that take us down the wrong path.


As a way to counteract these ‘red flags’, there are also three safeguards to ensure we don’t fall trap to bias.

  • Ensuring fresh/alternating experience and or analysis in the process
  • Ensuring robust and challenging debate about the process, assumptions, decision model and criteria, evaluation & risk analysis
  • Ensuring strong governance in decision-making authority.

There are also other ways you can try to handle red flags, such as listing good boundaries, making sure those making the decisions have no inappropriate self-interest, and having an identifying list of who the key decision-makers are.

Decision-making process

McKinsey & Company released a series of papers on decision-making and making good decisions. They reported that decisions initiated and approved by the same person produced the worst results and decisions made without any strategic planning or context also generated extremely poor results.

McKinsey suggested three themes contributed to organisations achieving good decision outcomes:

1. Assessment

The first theme is a tough and accurate assessment
– Of the situation
– The ability to execute the decision
– How they will evaluate the decisions
– Identify crucial factors
– Competitor capabilities and reactions
– Risk analysis

2. Process & Practice

The second theme is a strong ‘business case’ approach to the process and includes:
– Listening to dissenting voices
– Identifying and managing bias
– Identification and consideration of alternatives and barriers
– Sensitivity analysis
– Reviewing experience
– Decision criteria
– Ensuring organisational goals have predominance over the business unit and individual goals
– Involving participants in the decision-making process based on their skills and experience.

3. Targets

The third theme considers short-term/long-term targets and financial and strategic targets in setting outcomes.

Using these three themes, we can now use them to create a more detailed process.

how to make good decisions in leadership

The decision-making process can be a big one, but it doesn’t need to be a bad one. With your new understanding of your decision-making style, red flags to look out for, and the perfect process, you can have the confidence in whatever decision you make next.

Our Diploma of Leadership & Management (BSB50420) can strengthen your decision-making skills needed to excel in a leadership and management position. Enquire today to find out how to grow your leadership career.