Making Decisions in Uncertain Times

Making good, fast decisions is challenging under the best of circumstances. The trickiest are the decisions we call “big bets”— which are unfamiliar and have high-stakes. When you have a crisis of uncertainty, organizations face a potentially paralyzing volume of these big-bet decisions.

The typical approach of many companies, regardless of size, will be too slow to keep up in such turbulent times. Postponing decisions until we have more information might make sense when business is ‘normal’. But waiting to decide is a decision in itself when the environment is uncertain.

The decision-making reaction time during the coronavirus crisis has shrunk dramatically. Here are some principles that leaders can follow to make decisions quickly when needed.

Breathe

Pause and take a breath—literally. Allow yourself a moment to step back, take stock, anticipate, and prioritize. This may seem counterintuitive to one’s first reaction, but it’s essential now.
When Wayne Gretzky was asked what makes a great hockey player, he answered, “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” That is of course easier said than done. During a crisis, it is tempting to jump from one urgent task to the next and focus mainly on that which is right in front of you—to just execute. This however can be a tragic mistake. Research shows that the simple act of pausing, even only for a second or two, allows the brain to focus on the most relevant information.
Ask yourself ‘What is most important right now’? ‘What am I missing’? ‘What could we influence now that could pay off later’? Involve your team with these questions and ask for their input.

Involve People

Leaders often feel an urge to limit authority to those at the top during a crisis. It is during these times that they should reject the hierarchical model that they might be more comfortable with in normal times. Instead, it may be a better idea to involve many more stakeholders and encourage different views and debate. This approach can lead to smarter decisions without having to sacrifice speed.
The fishbowl model in which decision makers and key experts sit around a table (or virtual one) can be helpful when making decisions during a crisis. Include at the table one or two decision makers, multiple experts, and one or two “empty seats” for other relevant stakeholders in the gallery to rotate in as they have points to share. A majority of stakeholders can just observe the meeting, which builds understanding without having to make an extra communication step afterward.

During a live meeting, stakeholders watching the fishbowl can contribute information and ideas by temporarily taking one of the empty seats and participate only briefly before returning to the gallery.

Using this approach, it is possible to involve a large number of stakeholders and experts without sacrificing speed. Especially when things are unfamiliar and the decisions you are considering are bold. Many points of view may be needed to make sure the decision makers aren’t missing something.

Make the Critical Small Choices

Some small choices that leaders make in the short term could have a very big impact over the long term as a crisis unfolds. These are not always easy to spot, but leaders must look for them.

For example, Netflix has gone to lower-resolution streaming in some locations during the coronavirus to ease the data load on information networks. Although most people won’t notice the difference in quality, this decision could mean that the internet doesn’t crash.

Leaders must anticipate multiple possible scenarios for how things might unfold over time. No one can predict the future but anticipating a range of possible pathways and general scenarios can be extremely helpful in thinking through what might happen.

Consider making a list of five to ten actions that if made today might, depending on what happens, make a difference later. If we fast-forwarded a few months and identified a small decision or action that would have made all the difference if we had taken it, what might that decision or action be?
Include your team to help identify which small decisions or actions you should address now, in case they become the difference makers down the road. These decisions could range from actions to save cash and ensure liquidity to actions to beef up the resilience of your supply chain by quickly exploring alternative suppliers

Set Up a Nerve Center

In stressful times, leaders will likely need to make more big-bet decisions than before and also will be worried about their employees. When making high-stakes decisions, it is important to be able to focus on the issue at hand. Minimizing distractions is key in this case. Leaders need to be calm in order to make clear decisions and not to make errors in judgment. Creating a nerve center can help leaders focus on making strategic decisions.

A strategic decision comes with a high degree of uncertainty, a large likelihood that things will change, difficulty in assessing costs and benefits, and a result of several simultaneous outcomes. A tactical decision comes with a clear objective, a low degree of uncertainty, and relatively clear costs and benefits. Tactical decisions are important—sometimes crucial. Yet they are often better left to those on the edges of an organization who can act effectively without raising issues to higher levels.

One way to ensure that the right people will be the ones making tactical decisions is to set up a nerve center. This is a network of cross-functional teams with clear mandates connected by an integration team that sees that decision making occurs thoughtfully and quickly. Each team focuses on a single area or scope; often, the teams are for workforce protection, supply chain, customer engagement, and financial stress testing. There is a central team that keeps everyone coordinated and ensures collaboration and transparency. In a crisis, leaders should set up the nerve center quickly and with the knowledge that it won’t be perfect.

Hospitals deal with emergencies all the time and are well equipped to do so. However, the COVID-19 pandemic is different. It requires setting up a nerve center so that decisions on staffing and the allocation of scarce resources can be made more quickly and by the right people. Some tactical decisions that might have been made in the nerve center, such as the allocation of ventilators and the scheduling of elective surgery, will now need to be considered strategic decisions. It might be a strategic decision to convert a university dorm or hotel to a hospital space, but making sure the space is functional is a tactical decision for the nerve center.

Empower Leaders Who Have Good Judgment and Character

During business as usual, some people who get ahead are of a certain type. They say and do the right things, know how to navigate the system, and manage messages so that people hear what they want to hear. However, many of these usual suspects, who typically are tapped to lead special initiatives, are ill suited to lead in a landscape crisis of uncertainty.

Leaders with the right temperament and character are necessary during crises. They stay flexible but can still make the tough calls, even if that makes them unpopular. They gather differing perspectives to help arrive at decisions, with the best interests of the organization (not their careers) in mind.

When making the move to empower other leaders, don’t just pick the usual suspects as they may not be the right choices during a crisis. Identify people who have done as many of the three following things as possible to increase the likelihood of them being successful in the current times of uncertainty:

  1. Have previously lived through a crisis (personal or professional) and shown their personal resilience
  2. Made a tough, unpopular decision because it was the right thing to do.
  3. Willingly have given bad news up the chain of command to leaders who didn’t want to hear it
    You may not be able to find people in your organization who meet all three criteria but beware if you empower leaders who meet none of them.

Go Big or Go Home

Unprecedented crises demand unprecedented actions. Lessons from the past suggest that leaders are more likely to underreact. What is necessary is to take the bold and rapid actions that would likely feel too risky in normal times.

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