Being in an organization's management and leadership position requires making many decisions. Depending on how many decisions one has to make in a short period, this can result in decision fatigue. According to registered psychotherapist Natacha Duke, MA, RP, decision fatigue is a phenomenon where the more decisions a person makes over a day, the more physically, mentally, and emotionally depleted they become. If this kind of depletion continues, an individual can experience job burnout, and if not dealt with quickly, it can result in a complete lack of interest in their job and other aspects of their life.
One way to manage decision fatigue and possibly burnout is to reduce the stress of making decisions and the number of decisions made through delegation and distributed leadership.
However, the biggest challenge I see leaders and managers have with delegation is a fear of the quality of the decisions made.
In this article, I’ll outline how to identify decisions to be delegated and what tools or frameworks can be used to help make those decisions. I’ll also discuss decision-making pitfalls to avoid.
Embracing a distributed leadership mindset means delegating the authority to make decisions to those closest to the work. A few things are required before this can be done successfully.
The first is ensuring that the organization is competent to make these decisions. By that, I mean if there’s a specific business domain, it’s well understood, so people understand the context in which the decisions are being made. From a technical standpoint, they have the required knowledge and skills to make informed decisions.
The second is ensuring well-defined boundaries. I typically refer to these boundaries as guard rails that provide freedom within the organization.
Clearly defined processes, a focus on outcomes—not output—building a culture of continuous improvement, and fostering a culture of risk-taking allow the following types of decisions to be made organizational-wide and do not require a decision-making bottleneck.
Another filter to apply is what Jeff Bezos calls Type 1 and Type 2 problems. The question to ask is, is this decision reversible? If it is reversible, it’s a Type 2 problem, and it’s “safe” to decide and act quickly and probably delegate. If it’s not reversible, then it’s a Type 1 problem, and this decision should be made slowly before acting and shouldn’t be delegated.
Here’s a snippet from Jeff Bezos’s letter to shareholders in 1997:
As organizations get larger, there seems to be a tendency to use the heavy-weight Type 1 decision-making process on most decisions, including many Type 2 decisions. This results in slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention.
I have seen this happen in companies with only 20-30 people. Size isn’t necessarily a requirement for this problem to occur. The real issue I see is that as companies get larger, the CEOs and executives become dumber, in the sense that an increasing number of things are happening that make it difficult for them to be aware of and have direct involvement with. This can be particularly jarring for founders who have, up to that point, been very involved in every aspect of the business.
These decisions should be made slowly and thoughtfully, not alone, and typically fall into the domain of complex and Type 1 decisions. Typically, the organization leadership team would make these decisions together, as they require a broad breadth of expertise and experience.
Complex decisions involve multiple factors, stakeholders, and potential outcomes, making them more challenging and time-consuming than simple or routine decisions. Some characteristics of complex choices include:
Examples of complex decisions include developing a corporate strategy, designing public policies, or making medical treatment choices for patients with multiple health conditions.
To effectively tackle complex decisions, decision-makers often rely on structured approaches, such as decision-making frameworks, to break down the problem into more manageable components and systematically evaluate potential solutions.
Structured approaches to decision-making are crucial when dealing with complex decisions because they provide a systematic and organized method for navigating the intricacies of the decision-making process. Here are some key reasons why structured approaches are essential:
Structured approaches to decision-making are essential for navigating complex decisions because they provide a roadmap for analyzing the situation, evaluating options, and reaching a well-reasoned conclusion. By embracing these approaches, organizations and individuals can improve the quality and effectiveness of their decision-making, even in the face of uncertainty and complexity.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It is a strategic planning tool used to evaluate the internal and external factors that can impact an organization's or individual's success.
Components:
Example: A company considering launching a new product might use a SWOT analysis to assess its internal capabilities and the external market conditions before deciding.
A decision matrix is a tool for evaluating and prioritizing different options based on weighted criteria.
Components:
Steps:
Example: A company trying to decide which software vendor to choose might use a decision matrix to evaluate each vendor based on criteria such as price, features, user-friendliness, and customer support.
PEST stands for Political, Economic, Social, and Technological. It is a framework used to analyze the macro-environmental factors that impact an organization's performance.
Components:
Example: A company planning to expand into a new country might use a PEST analysis to assess the viability and potential challenges of entering that market based on the political, economic, social, and technological conditions.
Wardley Maps is a strategic planning tool that helps visualize the landscape of a business, market, or ecosystem. Developed by Simon Wardley, the maps help organizations make better decisions by understanding the relationships between different components and their evolution over time.
Wardley Maps offer a robust framework for understanding the complex interactions between different components in a business or market. By mapping out the value chain, assessing the evolution of each element, and analyzing the resulting landscape, organizations can make more informed decisions about where to invest, what to outsource, and how to position themselves for long-term success.
Components
Stages of Evolution
Steps to Create a Wardley Map
Online Retailer:
Ride-sharing App:
The Cynefin framework is a decision-making tool that helps leaders and managers understand the complexity of different situations to make better decisions. Developed by Dave Snowden in 1999, it categorizes issues into five distinct domains, each requiring a different approach to problem-solving and decision-making.
Clear (formerly Simple or Obvious) Characteristics: Problems in this domain have clear cause-and-effect relationships that are easily understandable by everyone. Best practices are known and widely accepted.
Decision-Making Approach: Sense – Categorize – Respond
Example: Following a standard operating procedure for routine tasks.
Complicated Characteristics: Problems in this domain have clear cause-and-effect relationships but are not immediately apparent and require expert analysis. There are multiple correct answers.
Decision-Making Approach: Sense – Analyze – Respond
Example: Diagnosing issues in machinery that require specialized engineering knowledge.
Complex Characteristics: Problems in this domain have unknown cause-and-effect relationships that can only be understood retrospectively. The system is dynamic and unpredictable.
Decision-Making Approach: Probe – Sense – Respond
Example: Developing a new market strategy with uncertain customer preferences and competitor actions.
Chaotic Characteristics: Problems in this domain have no apparent cause-and-effect relationships and require urgent action. The environment is highly turbulent.
Decision-Making Approach: Act – Sense – Respond
Example: Crisis management during a natural disaster.
Aporetic (formerly Disorder) Characteristics: This is the state of not knowing which domain a situation belongs to. Decisions are often based on personal preferences rather than situational appropriateness.
Decision-Making Approach: Break down the situation to categorize it into one of the other domains.
Example: There is confusion and lack of clarity about how to proceed.
Complicated Domain Example:
Scenario: An automobile manufacturing company faces a technical issue with a new engine design.
Decision-Making Approach: Sense – Analyze – Respond
Outcome: The expert analysis leads to a fix that resolves the engine issue and improves the design for future production.
Complex Domain Example
Scenario: A tech startup is trying to develop a new app that caters to evolving user preferences in social media.
Decision-Making Approach: Probe – Sense – Respond
Outcome: The iterative process allows the startup to refine the app in response to natural user behavior, leading to a more successful product launch.
These frameworks provide structured approaches to decision-making by helping organizations and individuals systematically analyze the factors that can influence the success or failure of a particular course of action. These tools allow decision-makers to make more informed and strategic choices aligned with their goals and objectives.
Steps in structured decision-making
Mastering decision-making and problem-solving is crucial for success in leadership and management roles. Decision fatigue can be challenging, but delegation and distributed leadership strategies can help alleviate this burden. When delegating decisions, it's essential to consider the organization’s competency, clearly define boundaries, and differentiate between simple, routine, operational, tactical, group, data-driven, and crisis decisions.
Strategic and ethical decisions should not be delegated and require careful consideration by the leadership team. Structured decision-making approaches are essential for complex decisions involving multiple variables, uncertainty, high stakes, and long-term impact. Frameworks like SWOT analysis, decision matrices, PEST analysis, Wardley Maps, and the Cynefin Framework provide systematic methods to analyze the situation, evaluate options, and reach well-reasoned conclusions.
By embracing these strategies and tools and following a structured process of problem identification, information gathering, alternative generation, evaluation and selection, and implementation and monitoring, leaders can enhance the quality and effectiveness of their decision-making. Investing the time upfront to employ a thorough, objective approach pays dividends in better outcomes, even in the face of complexity and uncertainty. Mastering the art and science of decision-making is an ongoing journey well worth the effort for any leader striving for success.