In a world where change is accelerating, where new products and services are developed in ever-faster cycles, the quality of decisions is ultimately the most important test of leadership. Ironically, many managers and leaders are still working with Old World decision-making skills, even while their companies are trying to succeed in a Light Speed world.
A critical skill that leaders must learn in a Light Speed world is how to juggle and manage complex decision processes. As I describe in my latest book, “The Leadership Equation,” there are five – and only five – types of decisions: autocratic, consultative, consensus, delegated, and democratic.
To be effective in a Light Speed world, more decisions have to be made “consultatively.” In a consultative decision, one person or one group ultimately makes the decision – because it’s their responsibility to do so. In a consultative decision, the leader engages people up front, clarifies that it’s her role to ultimately make the decision, and then gains people’s input. She makes it clear that she is open to different ideas – and she actively creates opportunities for people to speak up. But there’s no expectation that consensus will be reached; instead, people are encouraged to make their case, listen to other arguments, and then listen and answer questions as the leader comes to a conclusion.
There are three keys to success in a consultative decision: First, the leader needs to say up front how the decision process will go and who will make the final call. Roles and responsibilities at each step need to be mapped out. Second, there must be regular updates to remind people when they’ll have opportunities to contribute. Third, it’s key to record the ideas and feedback so that people know their views were heard.
The advantages are obvious: Instead of everyone needing to agree before a decision is made, a consultative decision can flow smoothly to a conclusion. Because people can speak their minds, unfettered by the need to agree with everyone else, unconventional thinking has a better chance to be heard.
Contrast this to a consensus decision. When using consensus, everyone must agree – a much more difficult and time-consuming process. And to what end? Some would say the end is greater “ownership” in the decision. But our experience working with hundreds of different organizations is that people actually lose trust in consensus decisions for several reasons. First, people may have stifled their feelings in order to reach agreement, resulting in a “faux” consensus. Second, people may feel that they had to water down the quality of the decision in the urge to reach consensus. Finally, when people perceive their leaders failing to take responsibility to make decisions, they lose confidence and trust. What’s the point of leadership, they ask, if the people in charge don’t actually manage and make decisions?
Last week, I worked with the executive team from a large organization to help them learn how to manage decisions more effectively. The CEO turned to me afterward and said: “I realize now why we have so many problems with decision making in our company: We aren’t clear at all about how we are going to make a decision. So people simply assume it’s going to be consensus, or assume that the team asked to develop some recommendations is going to make the final call. This has been a huge eye-opener for me!”