The Decision Accelerator
Imagine if every decision you made could make or break your company's future. Every day, employees at all levels are bombarded with decisions that shape the organization's trajectory. Each choice, no matter how seemingly small, has a ripple effect. Are your decisions propelling your company forward, or are they holding you back?
According to McKinsey, companies make tens of thousands of decisions daily, yet only 20% of them are considered high-quality decisions. (1) How can we raise the percentage of high-quality decisions? Executing a strategy involves navigating a sea of choices, big and small. Leaders can’t possibly oversee all of them. In fact, most decisions happen far from the executive suite, carried out by people on the front lines. As Matt O’Connell, CEO of Vistaly, told me, “On the ground, it’s the day-to-day, nitty-gritty stuff where you need to make quick decisions. The executives don’t care about the details—they just want the problem solved.”
Making good decisions quickly is critical, but it’s not easy. Decision-making is influenced by a number of factors—ranging from cognitive biases to stress and emotional pressures—that can cloud judgment and lead to inconsistent or rushed choices.
The Challenges of Decision-Making
Researchers from Washington University in St. Louis, while developing strategies for improving decision-making among scientists, identified several key factors that can undermine professional decision-making. These challenges aren’t unique to research. I’m sure you’ll recognize these in the corporate world as well.
Here’s how they break down:
Complex Situations: Team members often face ambiguous problems where the “right” decision isn’t obvious. This can lead to indecision or inconsistent solutions across teams.
Imagine a team needing to decide on the best approach to respond to a sudden market shift. Should they allocate more resources to a new product line or double down on existing offerings? This kind of ambiguity can lead to indecision or inconsistent solutions across teams.
Cognitive Biases: Biases like overconfidence, confirmation bias (seeking information that supports pre-existing views), and self-interest can distort judgment, causing people to make flawed decisions.
A project team might become overconfident about a new product's potential success, leading them to ignore negative feedback from early testers, ultimately resulting in a product launch that fails to meet market needs.
Emotional and Stress Factors: High-pressure environments can impair judgment. When stress builds up, people are more likely to make hasty, impulsive choices without considering long-term effects.
During a tight project deadline, a team leader might impulsively approve a major change without adequate review, just to save time. When stress builds up, people are more likely to make hasty choices without considering long-term effects.
Impediments to Effective Decision-Making are particularly common in unfamiliar or complex situations:
Unfamiliar Situations: Without enough experience or a solid framework to rely on, employees may misinterpret rules or norms, leading to inconsistent decisions.
A new manager might struggle to apply company policies during an unfamiliar situation, such as handling an employee conflict, resulting in inconsistent disciplinary actions.
Complexity and Ambiguity: Conflicting interests and incomplete information make it difficult to fully analyze situations, often resulting in poor judgment calls.
When different departments have competing priorities during a product launch, the lack of clarity can lead to decisions that do not align with the overall company strategy.
Cognitive Distortions: In high-stress situations, people might justify unethical actions by shifting blame or downplaying consequences, leading to misaligned or even harmful decisions.
A sales team under intense pressure to meet targets migh decide to misrepresent product features, rationalizing it as necessary to close deals.
Sound familiar?
This is where guiding principles come in. They provide teams with a clear, structured framework for decision-making that counteracts these common challenges. Well-crafted guiding principles can help employees navigate complex situations, minimize biases, and stay aligned with the company’s broader goals—even under pressure. They give teams a set of simple, actionable rules for making decisions quickly and staying in line with the company’s strategy. When employees don’t have to wait for approvals or second-guess their choices, they can act with confidence. They know they’re on the right path because they’re following principles that reflect how leadership wants things done.
Of course, it’s not as easy as just putting some rules in place. If guiding principles are too vague, they won’t offer enough direction. A principle like 'Do what's best for the company' is too broad and leaves too much room for interpretation, leading to inconsistent decisions. If they’re too rigid, they’ll stifle creativity and adaptability. A principle like 'Always follow the process without deviation' might prevent employees from adjusting to unique challenges, ultimately hindering innovation. The goal is to give teams enough guidance to make the right calls while leaving room for judgment and flexibility. Think of it as setting guardrails rather than a strict path.
Recognizing these challenges in the scientific field, researchers developed the SMART Strategies™ to give scientists a structured approach to decision-making. (2)
Seek Help – Consult others when in doubt.
Manage Emotions – Stay calm to think clearly.
Anticipate Consequences – Think ahead about potential outcomes.
Recognize Rules and Context – Understand the rules and the situation.
Test Assumptions and Motives – Question your own beliefs to ensure sound reasoning.
These strategies can be adapted for corporate teams to create a decision-making framework that supports better choices across different situations.
Building strong guiding principles takes careful thought. If you’re stuck trying to figure out what should be in the guiding principles, think about what you might look for if you’re approving a decision. Ask yourself questions like: Does this align with our core mission? Will this decision positively impact our customers? Is this approach sustainable in the long term? Does this empower the team to take ownership while staying within strategic boundaries? You can think of guiding principles as pre-approvals. As long as the team is accountable to the principles, they don’t need to seek your approval on the decision.
Well considered guiding principles reduce the need for leaders to be involved in day-to-day choices and free them from an overload of meetings and emails. More importantly, they empower the people closest to the work to make high-quality decisions, enabling the organization to move faster and with greater precision. They cut down on hesitation and prevent different people from interpreting the company’s goals in different ways. Talk about a win-win situation. You get more time, and the team gains speed and engagement.
Attributes of a Good Guiding Principle
Clarity
Make it easy to understand. A good guiding principle should be straightforward enough that anyone can apply it without needing more explanation. Keep the wording simple.
Actionable
It needs to guide behavior. If someone can’t figure out what to do next after reading the principle, it’s not helpful. It should suggest a clear course of action.
Aligned with Strategy
The principle has to support the company’s overall goals. It should reinforce what the organization is trying to achieve and steer teams toward those outcomes.
Flexible
While clarity is key, guiding principles should still allow for some interpretation. They should be adaptable enough to fit different situations, while still keeping teams on the right track.
Memorable
If it’s too complicated, it won’t stick. Make the principles short and to the point so people can remember and use them.
Examples of Guiding Principles
Many companies have guiding principles that help shape decision-making. Here are some well-known examples:
Customer Obsession (Amazon): Always start with the customer and work backward.
Every decision is focused on delivering value to the customer, which ensures the end result meets their needs and enhances their experience.
Fail Fast, Learn Fast (Google) Embrace speed, but don’t be afraid to make mistakes. It’s better to make progress than to wait for perfection.
Teams are encouraged to act swiftly, learn from failures, and continuously improve.
Judgment (Netflix) You look beyond short term fixes in favor of long term solutions.
It’s about empowerment with accountability, creating an environment where people are trusted but also responsible for the impact of their actions.
These examples have a balance of clarity, actionability, alignment with strategy, flexibility, and memorability. That’s what makes guiding principles effective—they’re simple rules that enable better decision-making across the organization.
Empowering decision-making is about creating clarity. It’s about defining decision types, providing guiding principles, and trusting employees. This results in a more agile organization where employees are more engaged and aligned with strategic goals. When the framework is in place, thousands of decisions across the business become higher quality, driving agility and alignment.
Footnotes:
(1) McKinsey & Company. (n.d.). Decision making in the age of urgency. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/decision-making-in-the-age-of-urgency
(2) DuBois, James M., et al. “Professional decision-making in research (PDR): The validity of a new measure.” Science and engineering ethics 22.2 (2016): 391-416. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4819725/
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This post is an excerpt from my upcoming book, a practical handbook for executing strategy from an operator’s point of view. Drawing on decades of real-world experience, it’s designed to help leaders turn strategy into action through clear, actionable steps. Stay tuned for more insights and updates as we get closer to launch!
