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What if your leaders are bad decision-makers?

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By Institute for Corporate Productivity from i4cp Good decision-making is influenced by a number of variables – and not all of them are under the control of the decision-makers. Excellence in decision-making is influenced in equal parts by leadership development efforts and corporate culture. If your leaders are not good decision-makers, it’s time to determine which factors are tripping them up. For example, when provided with appropriate leadership development, the decision-maker is in control of his or her own ability to cull through data, identify what’s relevant and what’s superfluous, create alternative scenarios, assess risks and rewards, and recommend or implement solutions. The decision-maker’s sphere of influence and the trust and confidence of those impacted by decisions are also factors. However, the decision-maker could be constrained by other variables that may not be under his or her direct control: access to data, the quality of the data, authority to act, hidden agendas, and more. The culture of the organisation can facilitate or impede decision-making. A key finding in i4cp’s The People-Profit Chain is that leaders in high-performance organisations are 3.2x more likely to be seen as good decision-makers. Performing this fundamental responsibility well – making choices, formulating strategies, setting policies – is a necessity for organisations to achieve success. Leadership development Learning and developing decision-making skills must become a required focus for every leader and high-potential employee. These skills can be honed through a combination of formal and informal processes. Experiential learning: This type of hands-on learning--business simulations, role-playing, case studies--is favored to a high/very high extent by 32% more high-performance organisations than lower-performance firms as an approach for accelerating leadership development, according to i4cp’s How High-Performance Organisations Accelerate Executive Leadership Development. For example, games/exercises provide a fun way to reinforce important decision-making concepts. Firms such as i4cp member Microsoft Corporation, Procter & Gamble, Qwest Communications, and Hewlett-Packard have participated in such programs with Peak Experiences International, Inc., just one of the companies providing experiential learning activities such as a maze experience using strategic planning and collaborative decision-making. Coaching: Coaching was found to be the leadership development tool most highly correlated to market performance in i4cp’s Accelerating the Path to Leadership survey. Additionally, The People-Profit Chain™ report references a Harvard Business Review article highlighting Chevron’s group of decision analysis experts that has trained over 2,500 decision-makers through multi-day workshops and certified over 10,000 more through its online training module; the group also coordinates data gathering, builds and refines analytical models, and coaches decision-makers. Informal learning: This mode of learning is becoming increasingly important, according to i4cp’s The Top 10 Critical Human Capital Issues: Enabling Sustained Growth through Talent Transparency. Informal learning may occur through daily interactions and shared relationships or through social learning, such as microblogs and online communities of practice. Decision-making in its simplest form is enhanced by helping employees learn institutional knowledge. For example, an i4cp study conducted in partnership with American Society for Training and Development (ASTD), Informal Learning: The Social Evolution, found that informal learning is effective for determining such things as: who the go-to people are for specific information; the names, faces, titles, and responsibilities of key personnel; and how to get things done from a process standpoint. Culture The facilitation of decision-making must be supported by an organisational culture that encourages accountability and shared knowledge so that leaders can make and execute their decisions. Accountability: A key differentiator in leadership, according to The People-Profit Chain, is in holding managers accountable for the development and engagement of their direct reports. This includes ensuring that employees have access to training in decision-making and are encouraged to enroll in such learning opportunities through performance management discussions and the creation of personal development plans. Shared knowledge: To ensure broad access to the collective wisdom of the workforce, organisations must provide a means for gathering and sharing information and insights. The i4cp report How High-Performance Organisations Accelerate Executive Leadership Development presents, for example, how i4cp member The Boeing Company uses an internally-developed online application to support collaboration and knowledge transfer across the enterprise as independently contributed content, or as groups. The Facebook-like application includes contributions from subject matter experts and communities of practice. It is often said that “knowledge is power,” but according to i4cp, knowledge that is collective, collaborative, and continuous is unstoppable.

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