Few business leaders evaluate and consistently review the
quality of decision-making in their organisations. There is too little time to
look back, say many CEOs, and results are often murky or inconclusive, even in
retrospect.
Intelligence failures by the CIA leading up to the Iraq war
forced a thorough overhaul of agency decision-making processes.
There are
valuable lessons for CEOs from that review in the way we evaluate employees,
understand customers and anticipate competitors:
Be sceptical in
evaluating information: Understand where specific information came from to
help evaluate its accuracy–and relevance. Too often, decisions are made with
faulty data, leading to undesirable outcomes. Solve this problem by asking
people to source information on major assertions.
Be more cautious in
drawing conclusions: The same information can be interpreted in multiple
ways by different people. Provide opportunity in your organisation for
conclusions to be challenged by alternative viewpoints. The CIA, for example,
sets up “red teams” that are specifically tasked with finding weaknesses,
errors and bias.
Avoid “top-down”
influence: If employees know that you, as CEO, are looking for certain
conclusions, any meaningful decision-making process is rendered useless. People
believe their careers are tied to conforming to senior management’s “vision,”
so avoid politicising your decision-making process.
Beware of
over-compensating for past errors and previous experience: While we are all
products of past experience, but don’t be held hostage by it. People and
markets change, so continually challenge what you think you know. But don’t get
caught in “analysis paralysis,” and once a decision is made, don’t allow
second-guessing. “Learning from past mistakes is imperative,” said Thomas
Fingar, former chairman of the National Intelligence Council. “Worrying about
them is pointless.”
