Imagine this: You’re a general manager for a manufacturing company and orders are up. You know you should be celebrating, but instead, you feel gut punched. Your plants are facing severe capacity and material constraints and you know you can’t fill these orders. Now you have to decide which ones to fill, which to delay, and which to turn away.
Your decision will favor winners and losers: desperate customers, angry sales reps, and frustrated factory employees. And, if you don’t get it right, your reputation with all of these stakeholders will take a serious hit.
Here’s another tough decision scenario: You were just told that you’ve been laid off. It’s not entirely surprising since your company — and the community you live in — has been struggling. Do you stay in your depressed community where your kids go to school? Or do you move to another state where jobs are more plentiful?
This decision is full of bad options and a good dose of uncertainty. If you move, you’ll incur expenses and may even lose any unemployment benefits you’re receiving. If you stay, you’ll be in the same boat as your neighbor who has been out of a job for two years.
Every leader has to make tough decisions that have consequences for their organizations, their reputation, and their career. The first step to making these decisions is understanding what makes them so hard. Alexander George, who studied presidential decision-making, pointed to two features:
- Uncertainty: Presidents never have the time or resources to fully understand all of the implications their decisions will have.
- “Value Complexity”: This is George’s term to explain that even the “best” decisions will harm some people and undermine values leaders would prefer to support.
The decisions that senior leaders, middle managers, frontline employees, and parents have to make often have the same features. Uncertainty and value complexity cause us to dither, delay, and defer, when we need to act.
What steps can leaders take to deal with these factors when making decisions?
Our initial reactions to uncertainty often get us deeper into trouble. Watch out for the following four pitfalls.
- Avoidance. It often feels like problems sneak up on us when, in reality, we’ve failed to recognize the emerging issue. Instead of dealing with problems when they begin to simmer, we avoid them — and even dismiss them — until they are at a full boil. For example, perhaps your plants have been running at near capacity for a while and there have been occasional hiccups in your supply chain. Instead of addressing these issues, you accept them as normal. Then, “suddenly,” you’re unable to fill orders.
- Fixation. When a problem presents itself, adrenaline floods our body and we often fixate on the immediate threat. In this fight or flight mode, we’re not able to think strategically. But focusing exclusively on the obvious short-term threat often means you miss the broader context and longer-term ramifications.
- Over-simplification. The fight-or-flight instinct also causes us to oversimplify the situation. We divide the world into “friends” and “foes” and see our options as “win” or “lose” or “option A” or “option B.” Making a successful decision often requires transcending simplifications and discovering new ways to solve the problem.
- Isolation. At first, we may think that, if we contain the problem, it’ll be easier to solve. For example, it may feel safer to hide the problem from your boss, peers, and customers while you figure out what to do. But as a result, you may wait too long before sounding the alarm. And, by then, you’re in too deep.
To avoid these pitfalls — or to get out of them once you’ve fallen into them — it’s best to take incremental steps forward without committing to a decision too quickly. Below are five things you can do to reduce uncertainty as you evaluate your options.
- Assess the situation. First, fairly consider and add up the risks of not acting. Seeing these costs will push you out of avoidance. Second, consider the pluses and minuses of your options. Walk through different scenarios to uncover hidden risks and discover new options. For example, if you’ve lost your job, then not acting carries unacceptable risks. Moving to a high-employment area might make sense, but it comes with costs. Make lists of the costs and benefits of moving and not moving.
- Don’t get stuck. Challenge any either/or assumptions you’ve made. Ask, “Can we do both?” and “What other options are available?” For example, can you focus your job search on a high-employment region without actually moving until you find a job? If you do find a job elsewhere, would it be possible to work remotely?
- Add others’ perspectives. Grab a lifeline. Don’t stew alone about the choices in front of you. Instead, talk to people you trust about the decision and your assessment. Chances are that, if you expand your circle, you’ll expand your options.
- Try a test run. Find a low-risk, small-scale way to test your options. For example, if you can’t fill all customers’ orders, can you test having a few sales reps call select customers to delay orders and see what the response is? Can you outsource a few critical orders to another manufacturer? Use these tests to reassess the costs and benefits of your different options.
- Take a step. Break a complex decision into simple steps. Determine the very next step you need to take and then take it. For example, the next step is not: “Move to Omaha.” Instead, it might be: “Call three recruiting firms in Omaha.”