Decision making is a key part of being a top executive in a company and CEOs are embracing various strategies to make sure their firms keep moving in the right direction. PHOTO | FILE
What you need to know:
Bridging gap between employees and boards, and downsizing are among key stressors.
On Wednesday this week, a group of CEOs and senior managers from both the public and private sectors met at the Tribe Hotel in Nairobi for a workshop dubbed Executive Decision Making.
In attendance was a rich mix of leading executives including Mohammed Hersi of the Heritage Group, Stephen Makori of Transition Authority, Paul Njeru (Quipbank), Asok Shah (Occidental Insurance), Rajendra Tewary (Comcraft), Jonah Tomno (Amaco Insurance) and Diana Mulili (Access Kenya), to name but a few.
The beauty of such high level workshops lies more, not in the academic theories shared, but in the rich insight that emerges from spontaneous discussions that occur both formally within the workshop as well as informally on the sidelines.
The real gold to be mined from such forums is that executives get to share their unique perspectives on the topic of the day sieved through the fine filter of practical experience.
And what topic would be more exciting to hear from CEOs than how they make decisions and face emerging challenges?
What followed was a frank and unbiased discussion on how the various executives responded to different situations and what models assisted them arrive at key decisions.
Preferring to start from the deep end, the first question we sought answers to was, “Which decisions do CEOs find most difficult to make?”
It was almost unanimous that these were humanistic in nature – decisions whose implementation could have varying negative ramifications on the workforce. They included cost cutting measures such as downsizing as well as disciplinary decisions.
The difficulty of these lay in the fact that it was impossible to make such decisions without emotional detachment. One had to employ the coldness of rational cognitive processes.
Emotional side of things
Unfortunately, most CEOs and senior managers confessed that their training had only solidified their rational thought processes without much adherence to the emotional side of things.
As such, a lot of CEOs find themselves in a hard place when decisions deemed necessary to protect shareholder value end up hurting the welfare of some employees and disrupting the morale of the rest of staff.
Many CEOs agreed that making such decisions required humaneness. This was defined as the capacity to relate effectively with our emotional side and balance it with our rational side.
Being humane means that sometimes we have to sacrifice a bit of our logical rationalities and embrace emotional tendencies that may sometimes be detrimental to the bottom line, but which lead to a more harmonious organisation.
The second set of difficult decisions were those on change. Organisations have a tendency to gravitate towards the comfort zone or status quo.
Seemingly minor alterations can have far reaching effects and thus many CEOs find themselves living in a bureaucracy-laden company where checks and balances are placed to monitor each decision, leading to slowdown of change.
Many CEOs recognised that such bureaucracy may pose problems to the growth of the company and were open to ideas on tackling this.
One senior executive from a leading bank attributed the lender’s growth to a new decision making model termed “action learning”.
In this model, superiors are incentivised to actively transfer knowledge to subordinates and encourage them to make decisions as and when the situation demands.
The participant said the corporate culture had since been modelled around the mantra, “Act. If wrong, it is generally easier to seek forgiveness that permission.”
Given the preconceived notion many of us have about banks being conservative, I was especially pleased by the free spirit exhibited.
Other challenges top executives face in decision making is consensus building, especially among their boards, and creating ownership among subordinates. CEOs remain the bridge between the staff and the board.
A number of CEOs, especially from quasi-government organisations, pointed out that getting their boards to rally around a single decision was not as easy as they may have preferred.
Often, creating consensus was tasked to the board chairman thus a harmonious relationship with the board chair was key.
As we wound up, we sought to examine which between “gut instinct” and “deliberate rationalisation” was the better decision making tool for CEOs. To paraphrase Shakespeare, To think or blink?
Malcolm Gladwel wrote a nice book titled Blink – The Power of Thinking Without Thinking, which tried to indicate the superior power of gut instinct. In response, Michael LeGault published Think – Why Crucial Decisions Can’t be Made in the Blink of an Eye.
The CEOs agreed that both perspectives were situationally right. There are decisions in which a few seconds delay can prove disastrous. Yet there are those in which deliberative thought was important.
But all CEOs tended to be agree that as you gain more experience, your gut intuitive capacity grows to a level you can no longer ignore it.
Participant George Gatehi summed it up perfectly: “Knowing is not the answer,” he said, “Sharing what you know is the solution.”
