A decision is basically a judgment. One tends to assume that decisions are based on facts, but that is rarely the case. Peter Drucker, one of my favorite writers on management, teaches us that decisions are based on conflicting opinions about conflicting alternatives. Opinions are like the scientific hypothesis. In science, one finds the validity of a hypothesis by testing it. So the question to ask is: What do we have to know to test these opinions? What will be the criteria for measuring the possible consequences of the various opinions? In management, this is not a mathematical calculation; it is risk judgment.
When there is consensus, there is no need for a decision. A decision is needed when there is disagreement. However, disagreement alone is not enough to provide alternatives for a decision. A decision without alternatives is a gamble. During the execution, you may find that the final decision is wrong. If you have gambled, the alternative is failure. If you have weighed alternatives, the alternatives examined will give you a fallback position.
So, to be an effective manager, make sure you have organized disagreement. You will never be able to lead your organization through these rapidly changing times if you have surrounded yourself with only those who agree with you without question.
Now the alternative to making a decision is “to just do nothing and maybe the problem will go away.” This can actually be the best course of action if the problem is of little consequence and the alternatives will make little difference to the outcome.
In many situations, if we don’t act, we’ll probably survive. But maybe by acting the company will be far better off in the long run. Act or don’t act, but don’t hedge or compromise. However, during the execution listen to those inner demons asking the tough questions. Nine times out of 10, they are probably of no concern, but the 10th time might be the one. When it is, act quickly to change course.
As an executive, you are not paid for doing things you like to do. You are paid for getting the right things done – making effective decisions.