Whether you are a working mom, the U.S. President, the Saudi Arabia prince, or a high corporate executive, you have some sort of leadership role and will make many decisions in one single day. Some of them might be impactful business decisions, career decisions, or even life decisions.
We, humans, are bound to make decisions all the time. And there is a simple reason for that: nothing happens without us making decisions towards reaching a goal.
And if you are right now thinking, “I don’t make decisions,” well, that’s too bad because it means someone else is making them for you. Chances are, you always feel helpless and with a sense that you don’t have control over your life.
Making decisions gives us power because they give us some sort of control over the situation we are handling.
Making decisions means we have options. And having options means we have some degree of control because we are at choice. And having some degree of control helps us make progress.
There is no way to make any progress in anything in life without making decisions. Whether it is you making them or someone else. That’s a simple but important fact.
It is important because it helps us realize that since we have to make decisions, why not find a way to make better decisions. And why not make better decisions starting right now?
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Why Making Impactful Business Decisions Is Important?
As leaders, we often underestimate how important it is to make impactful business decisions. We forget that our outcomes are the direct result of our decisions.
What we remember is the strategy and tactics (especially if it was a kick-ass strategy that outsmarted our competition or something else epic), but we forget the decisions that led to those tactics.
Making impactful business decisions is critical because:
1) It defines the baseline goal and direction for our strategy, behaviors, and what we want to achieve.
2) It improves company’s bottom line (i.e. profit) and shareholder’s satisfaction (which ultimately will lead to stock price increases and growth of company’s value in the market)
3) It creates better and more inclusive work environments
4) It makes our employees happier and more productive
5) It generates a positive impact on the communities we serve
6) It attracts exceptional global talents to work with us
7) It lays out a foundation of trust between us and our suppliers, partners, clients, and communities
8) It ensures business continuity in the long run
What Constitutes Impactful Business Decisions?
Impactful business decisions are those strategic decisions that impact the 4 Success Pillars of Global leadership. During becoming a highly valued global executive, you’ll have to use the knowledge and skills that are the foundation of the 4 pillars, to make better decisions.
Let’s prime this discussion by saying that impactful business decisions are those that stay in the positive spectrum of the impact. You don’t want to make business decisions with a negative impact, do you? No, I’m sure nobody does. We value our reputation and our career progression.
Having said that, these positive and strategic business decisions always have an impact in one of these 4 areas of impact:
4 Areas Of Impact In Business Decision-Making
Personal Impact
How is this decision affecting you personally? How is it affecting your personal life, health, finances, relationships, and resources? And… don’t forget this one, how is it impacting your time?
Your relationship with time is crucial, as you can never be 2 places at once. Not last time I checked, at least. This means every decision we make will engage our time in a certain way, which means it won’t be used for something else. Every decision comes with a time trade-off.
Learning personal leadership and all the skills to manage it well is vital.
The key deliverables for impactful business decisions that affect personal leadership:
- It must shelter mental game or mental health from negative influences
- It must ensure continuation of good health, energy levels and lower stress levels
- It must provide greater performance and productivity
- It must guarantee 100% alignment with personal values and goals
- It must enable good self-care and the exercise of self-discipline
People Impact
The English poet John Donne, famously wrote in the 17th century that “no man is an island.” He meant to compare people to countries and expose the interconnectedness of all people (and therefore, all countries).
We are all connected somehow. Just because we can’t see a connection does not mean it’s not there.
All our decisions, business-wise or not, affect other people. They affect our relationships; they affect our co-workers; they can affect even the security guard downstairs.
When making business decisions, we have to understand and map all the connections and see the long-term consequences of these decisions. Are all these impacts and consequences also in our plans and strategies? Are they aligned with what we want in the long-term?
Impactful business decisions affect people. That’s a given, and it’s our jobs, as global executives, to make these impacts positive, long-lasting, and helpful to those we serve.
The key deliverables for impactful business decisions that affect people leadership are:
- Ensure inclusive, safe, and positive workplace and environment
- Secure transparency of narrative, results, issues, situations, and plans.
- Appreciate and reward excellent and hard work, centered in a meritocracy system.
- Establish fair, clear, and egalitarian compensation and benefits for employees, suppliers, and partners.
Organizational Impact
Each and every decision we make have an organizational impact. It could be a minor impact or a massive one, but always there is an organizational impact on everything we decide to do.
We will explore this later, but for anyone to make impactful business decisions that positively affect the organization, there are vital skills to master.
Regardless of how skillful the decision-maker is, however, there will always be key deliverables to watch out for. The key deliverables for impactful business decisions that affect organizational leadership are:
- Provide value to shareholders.
- Ensure business continuity and are financially sound.
- Create or maintain a positive working environment.
- Provide helpful products, resources, or guidance to the communities and clients we serve.
Business Culture Impact
Every behavior or decision we put out there will have a cultural impact. For you as a leader, for the people around you, and the overall organization.
Every decision and behavior will have a consequence, which will prompt people’s reactions. Be them the shareholders, the employees, clients, communities, or suppliers. You name it.
From my experience, this area is the most difficult one for leaders to map out. “How is my decision going to impact the culture and behaviors in this company?” Very often, people don’t even think about this question. They think about employees, about shareholders. But what about the culture per se?
Culture is not exactly a living being, but a company’s culture behaves like a living being. It grows, changes and can die. As a leader and corporate executive, our job is to make sure a company’s culture thrives.
Here are some key deliverables for impactful business decisions that affect cultural leadership:
- Ensure culture’s continuity according to vision, mission, values, and code of ethics
- Protect culture’s spirit and letter as one and the same, in other words, that everyone walks the talk
- Guarantee that unconscious biases do not have a seat in the decision-making process
- Secure the decision continuously improves the overall cultural competence of people and the organization
All right, so now you are thinking, “I understand the impacts, but can you give me some examples of what constitutes impactful business decisions?
- Changing providers and preferred partners (globally or not)
- Implementing a new payroll system
- Submitting a new drug for FDA approval
- Migrating a database to a new server, provider, or location
- Implementation of new or revamped cultural drivers
- Definition of hiring criteria and selection process
- Definition of firing criteria and performance metrics
- Making big branding modifications
- Establishing financial goals for a department or for the entire organization
- Creating, testing, and implementing a new product
- Outlining sales process, tools, and guidelines
- Defining succession plan process, criteria, and guidelines
- Asserting a crisis protocol and management plan
- Moving a business site to a new location
As you can see, there are an infinite number of examples we could think of. You can start brainstorming, taking these ones as an example.
In order to make these impactful business decisions, you will have to possess several essential skills to make sure you are making the best decisions that have positive and long-lasting consequences.
What Skills Do You Need To Make Impactful Business Decisions?
As we mentioned earlier, making impactful business decisions is not a small feat. Global executives who want to make impactful business decisions need several skills and competencies to ensure they are doing the right thing.
Decision-Making Theory
In psychology, decision-making is the cognitive process resulting in the selection of an option or a course of action among several other possibilities and options. To make better decisions, it is helpful to understand how this selection process happens, what’s involved, the influencing factors, and some of the tools necessary for this decision-making process.
Decision-Making Models
Theorists did not slack off in creating decision-making models. In fact, there are so many models that it is possible to get really confused about which to use when you know them all.
However, knowing the basic and most important ones can give you a vantage point when making decisions. It helps you identify critical points during the decision-making process and evaluate your options better. By understanding different models, you can quickly connect and address situations, as you can predict things better.
Group Decision-Making Process
As stated earlier in this article, no one makes decisions alone because no one is an island. Everyone is interconnected. How we make decisions with others has many theories, models, and propositions. We also have various factors that influence group decisions, like group thinking. Understanding how a group makes decisions is crucial in creating impactful and better decisions.
Options Selection Models
Options selection models are often also called tools for selection or methodologies for selection. These models basically outline how to evaluate and select options, based on which and how many options do we have in front of us. For example, the Pros and Cons tool is most suited for making binary decisions, like “yes or no” decisions. While Decision-making matrix helps you evaluate and select from several options. Each tool and its application is different and may have different uses.
Leadership & Decision-Making Styles
You can have a decision take forever to happen, or you can catalyze that decision. In other words, make it happen faster. Understanding leadership types and decision-making styles is important because it helps you catalyze the decision.
This happens by helping you map out factors of impact or influence in a decision, as we stated above in the 4 areas of impact. It also helps influence other decision-makers to make a faster decision.
Simply put, understanding styles help you create rapport and trust amongst those involved in the decision-making process and analyze angles through other people’s lenses so that you can find common ground fast, to move the decision-making process forward.
Executive Presence
Quite frankly, it took me several years to really grasp what executive presence really meant in the corporate world. Executive presence, in a nutshell, is not a skill. It’s a set of several skills. Executive presence is how you show up with these skills during your performance.
It is said that people with a high executive presence make better and more impactful business decisions. It is also said that people that make good decisions are perceived with a higher executive presence. What comes first, the egg or the chicken? That’s the catch 22 that nobody gets. Executive presence is interconnected with decision-making because it requires a similar skillset.
Most good Global Executive Leadership Programs offer all the skillset you need to learn for executive presence and decision-making. Check out ours; you won’t regret it.
Business Acumen
Without knowing the problem and the stakeholder’s goals and business needs, you can’t make a good decision. Business acumen means understanding the intricacies of the business, like if it were your own household. How is the selling process, who is your customer, what is your strategy, how does your working capital empower your business, your product’s catalog, and many other things.
Business acumen does not happen overnight. And you better have a plan to consume (and retain) all the information you will need to acquire this acumen. Check out our Ultimate Guide for your first 90 days as a global leader. There, it details, step-by-step a plan for you to acquire the main acumen you need during your first 90 days in a new global position.
Financial Literacy
If you don’t know where to start in terms of improving your skillset for better decision-making and executive presence, start here. Gain financial literacy. I dare say that all other skills listed here are imminently useless if you don’t have financial literacy. At the end of the day, you have to provide value to your shareholders. And a lot of the value comes from the financials. If you don’t know how an action will impact your financials and your shareholder’s value, you likely will make poor decisions. Some decisions that look obvious may look completely different once you factor in the financials. And when you have many different options to choose from, financial literacy becomes even more critical.
Influencing Skills
Risking appearing like a parrot, I have to repeat myself here and say that no one makes decisions alone. We often try to pretend that we do, that we are fully independent. But we are not. We suffer the influence of many known and unknown factors while making a decision, while also influencing other people at the same time. We don’t make decisions alone, in the sense that this connectedness happens both ways. Even if you are the primary decision-maker, you are not making the decision alone because you are receiving influence from outside forces, like it or not.
Understanding influencing skills will not only help you influence people on certain decisions and help people make decisions faster, but will also help you know when you are being influenced and whether or not you want to keep with the results from that influence.
You are at choice when you have greater knowledge about influencing skills and all its factors.
Expectations Management
Making decisions is a 7-stages process. During this process, several people will be involved. Either actively or passively. Also, as we saw in the 4 areas of impact above, the result of a decision will impact the self, the people, the organization, and the culture. How to manage all these elements’ expectations during each step of the process is critical for a smoother result.
Critical Thinking And Reasoning
Critical thinking is the objective analysis and evaluation of an issue in order to form a judgment. Whenever you have a decision to make, you have the issue of selecting an option or a course of action. This will require objective analysis and evaluation so that you can form a judgment to make your decision.
Also, critical thinking will be required when using the models we mentioned above. Knowing the models alone will amount to you nothing. You need to know how to use and apply them. For that, you will require critical thinking and reasoning.
In a nutshell, critical thinking is a process of reasoning. And like any process, it has steps and these steps can be learned. So anyone can develop critical thinking.
Prioritization Skills
If financial literacy was the place to start your journey towards making better decisions, acquiring prioritization skills should be your second one. You cannot make selections well if you don’t know how to prioritize things.
And mind you, priorities start with value-setting. Yes, to make priority means you will put something first and something second, which means the basis for your prioritization will be your values and goals in that subject.
So goal setting, values definition, and prioritization go hand in hand.
Cultural Competence
Here comes the parrot again. We don’t make decisions alone. This means that our interconnectedness with people makes it imperative to possess cultural competence. We will engage and deal with people with different backgrounds, cultures, aspirations, and preferences. There is no way around this.
Not possessing cultural competence is a recipe for disaster when it comes to making decisions. We are very likely to make poorer decisions if we don’t know our audience correctly. Remember at the beginning of this article; we mentioned that decisions would impact (besides self) people, organizations, and culture? That’s right, behind each of these elements, there is a person — a person with a background and set of experiences.
Raising your cultural competence will ensure better decisions because you will understand your audience better. Which means you can evaluate the impact of your decisions so that they are as positive as possible.
“Cultural competence is defined as a set of values, behaviors, attitudes, and practices within a system, organization, program or among individuals and which enables them to work effectively cross culturally. Further, it refers to the ability to honor and respect the beliefs, language, interpersonal styles and behaviors of individuals and families receiving services, as well as staff who are providing such services. Striving to achieve cultural competence is a dynamic, ongoing, developmental process that requires a long-term commitment.” (Denboba, MCHB, 1993)
For leaders to honor and respect these differences, they must first acquire this cultural competence, which happens in a process.
Change Management
Change management is a sub-skill inside uncertainty management, but I separated it here because it is a very basic skill to possess for the decision-making process.
Listen, not all skills in the decision-making process are meant for making the decision.
In the 7-stages process of decision-making, once you make the decision, there are still 2 stages to go: taking action on the decision and reviewing the decision.
Change management is needed to take action on the decision. Your decision will move you from point A to point B, regardless of what the decision was. Managing this change is critical for a good implementation of the decision and seeing the best results.
Uncertainty Management
Uncertainty management is a powerful skill to have for decision-making. Because shit happens. Yes, we live in an uncertain world, and things change all the time. Knowing how to deal with all the uncertainties is key for the decision-making process.
Problem-Solving
If critical thinking is the process of analyzing and evaluating things objectively, problem-solving is right the next step after you collect this information. It will be used to best solve your problem. Choosing the best alternative from your options, and making the decision, will require a lot of problem-solving capacity from you.
Time-Management
In this article, I said something fundamental about time that I hope you didn’t miss. I said that every decision comes with a time trade-off. Because you can’t be at 2 places at once. Once you decide to do something, it means you are also choosing not to do something else.
Time management goes hand in hand with prioritization, in the sense that the better you know how to prioritize your things and decisions, the better your time will be spent. And the more fulfilled you will feel too, mind you.
Our methodology Tower Of Action® helps individuals revamp their performance and their relationship with time by assisting them in learning how to prioritize better, manage their time, and focus on what really matters. Check out our free High-Performance Workshop to learn all that.
Success Mindset
Nothing good can really ever happen if you don’t have what I call, Success Mindset.
The truth of the matter is that if you don’t have a Success Mindset, even when success happens, you won’t see it, much less celebrate it.
Success Mindset is all about your positive and “can-do” attitude and how you perceive life. We have to curb negative thoughts as much as possible and focus on brighter perspectives about each situation we are facing.
There are 7 ways you can show up in life and perceive things. You can learn how you show up and perceive this by taking the Energy Leadership Index Assessment, or E.L.I. Assessment Pack. But caution. This is a pandora box. You can not unlearn something once you have learned it. This is a powerful tool that will change the way you see things.
And listen, this is not me saying. The Forbes Coaches Council highlights this assessment as one of the top 5 corporate assessments for talent development. Plus, there is plenty of research out there showing the positive effects of the E.L.I.
Common Roadblocks For Decision-Making
Making decisions can be easy for some and difficult for others. Some people might ponder for a lot of time, and others are capable of making decisions faster.
So why are some decisions so difficult and others are easier?
Let’s talk about the main roadblocks to good decision-making. Here are a few things that can delay your decision-making process or reduce your capacity for making a good decision:
Limited Data And Information
If we want to make good decisions, we should always start with information. We need data and information to make educated decisions. The lack of data can significantly impact your decision-making and, therefore, your results.
How we collect, analyze, and evaluate our options and information depends on our leadership and personality type. Everyone does it differently, and that’s why we said it’s essential to learn about styles.
So, when faced with having to make an important decision, you should ask yourself if you have the correct information you need to make informed decisions.
Another way to explore information collection is to ask experts in the field. Reviews, round-ups, and product/service profiles are always useful.
Lack Of Specific And Clear Selection Criteria
Unfortunately, no one trained us in school on how to make decisions. Nobody ever told us that as soon as we identify that a decision needs to be made, we have to, first thing ever, map out our selection or decision criteria.
Decision criteria mean your priority points that make or break your decision-making process. Or, in other words, the “filters” that you will use during your decision-making process.
For example, if I am buying a new showerhead, my criteria could be: the price max is $80, it must have a valve trim for water volume adjustment, and it must have a water-saving feature.
Having criteria helps you limit options and drill down to what you really want (and need). It’s critical for decision-making. I dare say all decisions should start first with the criteria definition.
Not Recognizing The Real Issue
Sometimes, when faced with a decision, we think we know the real problem and why we need to make a decision. And during the decision process or when implementing the decision, it is when we really understand what is going on.
For example, the reason why we decided to change showerheads was that the current head did not have a water-saving feature. Turns out, though, that just buying the showerhead was not enough to really use the feature, and we had to decide on another improvement, which was not in our budget.
That’s why research to recognize and define the real issue (or what you want) is so important. For you to really understand what’s at stake and what the consequences of a decision there are, you’ll have to deep dive into gathering more information, not only on the decision you are about to make, but also into the process around the product or service or project you are looking into, and so on.
Having Too Many Options
Another frequent roadblock to decision-making is having too many options. Good Salespeople are trained never to give buyers too many options because they know this detracts people from making decisions.
For example, the last time I had to buy a showerhead, I went nuts. There are so many options and so many prices, so many features, and so many variables. Where to even start?
My best suggestion for when you are faced with a decision that has too many options is to step back and make sure you have your selection criteria and your priorities straight. Even before beginning any option’s analysis or reading reviews.
Your objective is to filter the options based on what you need and want, which is driven by your selection criteria. The fewer options you have, the easier it will become to make a better and faster decisions.
Lack Of Prioritization
Truth be told, sometimes other decisions affect your current decision.
In the corporate world, we frequently call this decision game-board. You might have a limited budget for 3 different types of things you have to do. Which one to start with, how to fit them all into the budget? How will this sequence affect other decisions (or the so called, spill effect)?
Consider always creating your decision game-board by having a list of priorities. What needs to come first? What do you (i.e. your shareholder) value the most? Why is it important? And so on.
For example, your department needs to invest in new laptops for the team, but important functional training also needs to be done. You’ll need to decide what takes priority and which results you need first.
Consultation with stakeholders, including board members and even shareholders, is usually recommended when prioritizing your corporate game-board.
We think we know what our stakeholders want, but sometimes we don’t. People change their minds and priorities all the time. So fine-tune what they are before making critical decisions. You don’t want to decide on something, only to learn later that it’s not what most stakeholders wanted and affect your reputation.
Too Many Opinions And Naggers
Who has never experienced this: you are fixing something (be it a vase that broke or a computer code with an issue), and people surround you, all telling you what to do, where to fix, how to fix, making a fuss. You can barely think with all the noise.
Sometimes, in our executive lives, decisions look like this too. We have our opinions, but our peers, bosses, and team members all have different views. Of course, they want things to go their way.
Getting input from others is good, especially from our stakeholders, as we saw in the previous topic.
But bringing too many people to the discussion is also not efficient. It’s very unlikely that you’ll find homogeneous opinions and get something out of this convoluted process.
Bringing a diversity of opinion is good, if:
- you are backed with the right information to support you
- you have clear selection criteria
- your priorities are set straight
- you know your problem and what your goals are
- you brought the right subject matter experts to the conversation
Even after having all these things lined up, having too many people in the discussion will only deter the final decision.
It’s always recommended to have the right people only instead. Not more, not less.
And how do you know who the right people are? You know by identifying key subject matter experts (SME) in the key areas of your selection criteria. One SME per criterion is enough.
Consider bringing more people to the table when you have a decision that has a massive impact.
Letting Emotions Take Over
We sometimes let our emotions take over when making decisions. And sometimes, we even call it “intuition” to make us feel better. Well knowing it’s not. It’s pure emotion.
For example, let’s say you want that iPad, but you know you should spend that money on new training. Instead, you decide to get the iPad, purchase the training, and get a loan to close your financial gap. That’s all fine and good until you find out that your credit suffered a hit because of the hard credit inquiry of the loan, and you cannot get that mortgage refinancing the next month. All because you wanted the new freaking iPad so much, although yours is quite fine.
So the bottom line of this topic is: when we let our emotions take over, we might impact other decisions and other long-term consequences that might not seem to have to do with the current decision.
Always check in with yourself, and ask “Am I being emotional about making this decision right now?” If you receive a mental “of course not! I’m perfectly rational right now!” chances are that your emotions took over. If that’s the case, sleep on the decision and make it at a later moment, when you have the time to reconsider and rethink your priorities.
Experiencing Decision Fatigue
Decision fatigue is real. It happens to all of us.
Decision fatigue is the deterioration of the quality of decisions over time after the individual has made too many decisions. In other words, the brain gets tired of making too many decisions and starts to circuit-break.
Everyone is different, so everyone has their own limit for starting to experience decision fatigue. Whatever your limit is, the truth is that you will always reach a point where your brain gets tired of deciding stuff. In which case it will start to make bad decisions.
“What was I thinking?”
I hear that a lot from clients who experienced decision fatigue but had to make a decision anyway. A decision that they (sometimes) end up regretting later.
Dealing with this expertly needs the following things:
- Self-awareness: knowing your own limit before experiencing decision fatigue.
- Strategy Plan: planning things ahead of time is key. Do it when you are refreshed and energetic. Leave the brainpower for when you have to make spot decisions due to uncertainties and surprises
- Street smartness: learning how to avoid the things and decisions that quickly depletes your brainpower is essential. This way, you safeguard your “decision juice” for when it is really needed
- Removing distractions: every time you encounter a distraction, you have to make a decision. Did you know that? Yes, every single time you are faced with a distraction, your brain has to make a decision: is it important to pay attention to this distraction or not? It sounds stupid, but that’s exactly what your brain does. And this mere act of making this simple decision is depleting your “decision juice.” So, remove distractions as much as possible.
- Simplifying your life: if your routine has many checkpoints where decisions are needed, how about simplifying them to make sure you don’t deplete your brainpower? A lot of experts suggest simple things like choosing your outfit the day before, or using Waze instead of selecting your path on the go, and so on. Try to map out those simple things that you have to decide on during the day and simplify your routine.
- Taking breaks: the same way distractions deplete “decision juice” from our brain, taking breaks replenishes it. That’s why most experts recommend taking breaks every other hour, meditating once or twice per day, and having a self-discipline routine that prioritizes sleep quality.
Rember. Your sole objective is to leave as much as “decision juice” or brainpower for decisions, for when they are really needed.
10 Steps to Better And More Impactful Decision Making
Making better and impactful decisions is a learning process. Here you can see a list of things you can start doing, until you make practice perfect.
Step 1: Get acquainted with decision-making theory and models.
Step 2: Learn the main skills for good decision-making.
Step 3: Always have clear goals, aspirations, and priorities.
Step 4: Give it a deadline to make your decision to avoid procrastination.
Step 5: Simplify your life and smaller decisions to avoid decision fatigue.
Step 6: Use decision-making selection tools and models.
Step 7: Filter the options and define selection criteria.
Step 8: Do some scenario analysis before making the final decision.
Step 9: Take expert advice but avoid overflow of opinions.
Step 10: Evaluate your decision-making process and lessons learned.
There you go, global leader. You now have a deeper understanding of decision-making and how to make them more impactful and positive.
If you are interested in improving your decision-making skills and want to learn more in-depth about it, check out our Global Executive Leadership Program. In it, we go over how to make powerful and impactful business decisions by using the 4 success pillars of global leadership.
In case you have a specific business decision to make, in which you might be a bit stuck, you can purchase one of our executive coaching packages. During your program, we can help you get rid of the business decisions roadblocks, as you learned above, and map out all the elements and selection criteria for you (and other decision makers) make the best decision.
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