When Good Leaders Make Bad Decisions

When Good Leaders Make Bad Decisions

 

It can happen to the best of us. An idea that seemed good at the time can appear so obviously flawed through the clarity of hindsight. How can organisations ensure that decision makers are making ‘good’ decisions?

According to authors Campbell, Whitehead and Finkelstein (2009) there are three ‘red flag’ conditions that could contribute to leaders making poor decisions, including:

  • Inappropriate self interest;
  • Distorted attachments to people, places or things; and
  • Misleading memories.

The authors also recommended implementing safeguards against biases in decision making, which include:

  • Ensuring fresh alternating experience in the process.
  • Ensuring robust and challenging debate about the process; assumptions; decision model and criteria; evaluation; and risk analysis.
  • Ensuring strong governance over the organisation’s decision making authority.

They suggest the following strategies to manage/avoid ‘red flag’ situations for decision makers:

  • Listing the range of decision options and boundaries;
  • Listing the main decision makers and influencers;
  • Identify the potential ‘red flags’ for key decision makers;
  • Check for any inappropriate self interest or distorting attachments;
  • Check for misleading memories;
  • Review the list of ‘red flags’ to ensure all situations have been covered; and
  • Put appropriate safeguards in place.

What sorts of decision making practices are encouraged in your organisation? Do they support ‘good’ decisions? Perhaps it’s time to put some safeguards and strategies in place to ensure these ‘red flag’ situations are avoided for your decision makers.

You can read more about Effective Decision Making in Organisations in CAL’s Whitepaper, here.

Reference:

Campbell A., Whitehead J., Finkelstein S., Why Good Leaders Make Bad Decisions. Harvard Business Review. Feb. 2009. HBR. Boston.

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