Why Weak Decision-Making Is Dangerous For Business, But Is Difficult To Spot

Leadership is not the same as good management.

Corporate leadership is usually seen in the context of ‘managing’ the journey of a company in a defined direction.

l

Efficient management of people, resources and environment may help the company progress smoothly on course in an agreed direction. However, the success or failure of the company, or whether the company is able to fully leverage the market opportunity is often dependent on the leader’s ability to make tough decisions, sometimes involving making a choice between progressing in the agreed direction, or changing the direction.

Leadership is about leading i.e. setting the direction and ensuring that the troops are aligned to move in that direction, and encouraging them to move in that direction.

Use the analogy of an army in the past, marching on to conquer new geographies and it is easier to visualize what a leader’s role is. Leadership involves the ability to see far in the horizon; imagine what the land beyond the mountains looks like based on assessing the current environment; and then chart the most optimal route; stock up on the necessary supplies; communicate the plan to your troops; create smaller manageable groups and identify people among them to lead those contingents. Then before the onset of the journey, the leader’s role is to give a rousing speech to motivate the troops, and as you move along in the defined direction create the mechanism to review if the progress is happening at the right pace and in the right direction.

Sometimes, the journey may be more difficult than imagined and the leader may have to reassess the plan. Often, when you reach the top of the mountain you may realize, that the vision of what lay ahead was different than what it actually is.

It is during such times that good leaders make tough decisions, while weak leaders keep ambling along on the same plan hoping that somehow things will change for the better. This is the crucial difference between definite leadership and the mere ability to manage the march in the agreed direction. This is the difference between good managers and great leaders.

If managing change is tough, deciding to change is tougher

Changing direction is a tough call as it may require the company to realign its direction and resources. It requires conviction, confidence, the ability to convince others that the changed strategy or direction is a good decision and then the ability to reorganize the resources and people in the new direction. Of course, it calls for a vision that can assess what the outcome of a new direction could be. And it certainly calls for courage to give up what was debated and decided previously as a good direction, and embark on a new journey or a new direction. It also calls for emotional maturity, as suggesting a new direction may often mean debating against the very decisions/directions that you earlier fought your way for. Even if it is in the best interest of the organization, it is a difficult decision as it involves a whole lot more effort, not the least to convince the rest of the team to realign their views and plans.

To be able to pull off such a tough change in plan requires a leader with great competence and one who enjoys respect from the rest of the army.

The impact of indecisiveness or lack of foresight and vision is not measurable under normal measurement trackers, and hence managements need to debate at board meetings, on whether the direction needs adjustment.

When a leader guides the company and manages people & resources well in an agreed direction, it is visible as a ‘success’ because there were milestones identified and measurement criteria defined, and it is easy to ‘see’ that the company is progressing well. Or if the leader is not driving the progress well, that is easy to spot for the same reasons.

However, since the outcomes of an alternate direction are in the ‘unknown’ zone, absence of push in that direction is not visible.

Great leaders introspect. They assess the environment, and the factors that led them to take the original decision. They are not afraid of thinking of alternatives.

Apple may not have been relevant if Steve Jobs had not decided that Apple is NOT a computer manufacturer and bet on music players and mobile devices as the new direction. It took great leadership to change the Indian Tobacco Company into ITC, a multi-category brand, including hospitality – something that was not at all related to the business they were originally in. It took great leadership to reimagine Titan from a watch brand to a fashion accessory brand.

Great leaders take bold, difficult decisions. All decisions are not necessarily right. Because, a decision is nothing but choosing from amongst the various options available, all of which would have different outcomes in the future. All scenarios of possible outcomes are based on assumptions. And hence, it is dependent on the leader’s conviction on these assumptions and outcomes that will set the direction and pace for the company. And success will depend ultimately not on whether the decision was right, as any of these decisions could have been right, but on whether the leader was able to align the team, resources, products and processes to the decision.

This article was originally published in NextBigWhat on February 3, 2014 (Read here).

Advertisements

Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s