Bracing for a future that involves AI and ever-increasing data sets, CIOs face great cultural challenges.
4 styles of decision-making: A leader's guide
Know when to use the different styles of decision-making – and when it's time to try a different approach
Many people think that decision-making is a result of personality rather than a strategic choice. With that said, leaders need to understand that personality can’t stand in the way of making critical corporate decisions. Successful leaders can alter their approach to decision-making to accommodate the demands of diverse business situations.
[ Why is adaptability the new power skill? Read our new report from HBR Analytic Services: Transformation Masters: The New Rules of CIO Leadership ]
This article will break down four styles of decision-making, when to apply them, and when it’s time to try a new approach.
1. Directive decision-making
A directive decision-maker typically works out the pros and cons of a situation based on what they already know. Directive decision-makers are very rational and have a low tolerance for ambiguity. Their decisions are rooted in their own knowledge, experience, and rationale, rather than going to others for more information. The upside to this style is decision-making is quick, ownership is clear, and it doesn’t require extra communication. However, directive decisions can sometimes be made impulsively, without all the necessary information.
When to use directive decision-making
This style of decision-making lends itself well to situations characterized by stability, repeating patterns, and consistent events. Reserve directive decisions for instances where there is a clear and undisputed cause-and-effect relationship; in other words, a right answer exists and is understood collectively.
A leader’s role in directive decision-making
A leader needs to sense the situation, categorize it as a scenario that calls for a direct decision and respond appropriately. Make sure there are best practices in place for recurring processes. When classifying the situation, remember to ask yourself: Is this my decision to make, and do I have all the required information to make this decision? Delegate if necessary, but remember to communicate in clear, direct language. It’s a leader’s job to understand when extensive, interactive communication is unnecessary and to make direct decisions based on the information they already have.
Signs you need to use a different approach
When operations are running smoothly, it’s easy for leaders to fall victim to complacency. Leaders need to be mindful of the changing complexity of particular situations. If you start using direct decisions to make complex jobs simple, you need to change your approach. Understand that changing circumstances call for changing decision-making styles.
2. Analytic decision-making
Analytic decision-makers examine much information before taking action. For example, analytic leaders rely on direct observation, data, and facts to support their decisions. However, unlike directive decision-makers, an analytic decision-maker will seek information and advice from others to confirm or deny their own knowledge. These decision-makers have a high tolerance for ambiguity and are very adaptable, but they like to control most aspects of the decision process. This style is a well-rounded approach to decision-making but can be time-consuming.
When to use analytic decision-making
Analytic decisions are helpful in situations where there may be more than one right answer. Use this style of decision-making to solve problems where the cause-and-effect relationship is discoverable but not immediately apparent. Primarily, you’re using this approach to explore several options or solutions and using fact-based management to guide appropriate action.
A leader’s role in analytic decision-making
Unlike directive decision-making, leaders need to analyze all the information available to them before deciding on a course of action. It’s beneficial to assemble a team of industry experts to assist with analytic decisions; however, leaders need to consider conflicting advice and ideas openly. At the same time, leaders need to consider the viewpoints of non-experts in order to make the most of the analytic decision-making process.
Signs you need to use a different approach
The most significant warning sign of overuse of the analytic decision style is analysis paralysis. If you find yourself functioning in a state of over-analyzing or over-thinking without action or reaching a decision, you need to drop this approach.