What is the biggest decision you are facing at work? When I ask this question, most leaders tell me about a business decision—their budget, bringing a new product to market, or implementing an IT system.
But this isn’t the whole story… or even the real story.
Because, I get a different answer when I ask them to tell me the decision that had the most impact on their business in the past year. When I ask the question this way, they tell me about letting go of an underperforming leader who was destroying morale, restructuring the team, or forming a working group to solve a problem with a customer.
The decisions that actually matter most are people decisions.
Leaders assume decisions related to strategy, operations and customers are the most important. But hindsight tells us it’s the people decisions that matter most to business success.
I was speaking with the CEO of a public company, who reflected on his important decision. A business unit head had recently resigned. He had to decide whether to promote a high-potential leader to run the business unit, or go to market and hire someone with a proven track record. The Board pressured him to bring in someone with industry profile, who could give investors confidence. His executive team and the company culture he had built had him leaning towards promoting and developing someone from within. Not any easy decision.
The problem with his decision was the haphazard way he was making it. He asked his advisors casually about the top candidates. He reflected on the choice on his way to work. He had no meaningful criteria for determining the best candidate. Sure, he had a leadership competency framework and a position profile. But, they were meaningless, because he hadn’t done the hard work of focusing on where the business unit was headed, and who the business needed to take on those challenges. On top of this, he hadn’t sought out perspectives that were different from his own.
Contrast this with his approach to a recent business decision. Faced with an underperforming division, he formed a working group to set criteria and explore all options. He hired a strategy consulting firm to develop new options. Then he evaluated all options with different stakeholders represented. The entire time he kept the Board, investors, key customers and his leadership team fully engaged. A much more deliberate approach to making a decision.
It turns out that we spend too little time thinking carefully about the decisions that matter most—people decisions. And it comes down to what psychologists call Overconfidence Bias.
Overconfidence Bias shows up when our confidence in our judgment is greater than the accuracy of our judgment. Most of us fall into Overconfidence Bias when it comes to people decisions. And it leads to bad decisions.
The first step to defeat Overconfidence Bias is to define the most important decision you will make. This is because Overconfidence creeps in when we don’t take the decision seriously enough.
What is the most important decision you are facing?
Chances are it’s the most important decision you will make this year. To help you figure out the most important decision you are facing, I’ll share some common ones.
These are the top 5 decisions leaders make about people:
- Who will you hire or promote to face an important business challenge? Stella has an impressive resume, and she interviewed well. Are you ready to take the bet that she’ll succeed on your team?
- Who will you invest your time and effort in to develop? Derek is the millennial on your team who has been pushing to lead a larger project. Are you ready to take a chance on him by givinghim responsibility for a new account, and all the coaching, monitoring and feedback required?
- Are you ready to invite someone new to your inner circle? Your inner circle has been getting, well… stale. No new ideas or provocations to challenge your thinking. Jessica is the hotshot finance leader who joined the organization last month. Can you trust her?
- Who will you reach out to for support? At the back of your mind, you know you’re stalling on a significant priority. If you’re ready to face the music, who are you going to reach out to?
- Who deserves less of your time and effort this year? She’s the person you’ve worked with since you started, but she takes your energy away. He’s the one you hired with great optimism. But his results aren’t there, and now you’re losing confidence in him. Is it time to let go?
What is the most important people decision you face?
Any of these people can make or break your success—both your business success and your personal success. But most of us will make people decisions informally or superficially. We don’t realize that it’s these decisions that leaders tell us in retrospect were their most important decisions.
Your success this year depends on figuring out the most important decision you will make. Because once you’re clear on the decision you need to make, you will naturally be more deliberate about how you’ll make the decision.