What should business leaders do before making important business decisions? It’s a simple question, but the answer can affect the future of a business. If it’s a critical decision, the wrong one will steer it off the rails while the right decision will allow it to experience unprecedented success.
The worst thing, of course, is for a business leader to not make a decision, which, in a strange sort of way, is also a decision. An indecisive business leader will lose credibility as a leader. This can be an unreasonable expectation because a leader does not always have enough time or information to make a reasonably accurate decision.
It can be difficult to make a sound decision about things like:
- Moving the company to a new location or opening up new branches in another location.
- How to deal with a good employee who has made a mistake that has financial losses for the company.
- Whether it is better to reveal bad news to stockholders and face the consequences or wait to see if things turn around.
- If the business should adopt a new technology or wait to see how competitors fare with it.
While there is no way of always making a right decision, great leaders can adopt a three-fold strategy when it comes to decision making: First, they can use logical intelligence; second, they can use emotional intelligence; third, they can use intuition. If a leader uses one or more of these three strategies, he or she will have done their best to come up with a good decision.
Let’s take a look at these three strategies:
1. Using Logical Intelligence
Logical intelligence is looking at all the facts and coming up with a reasonable prediction of how things could work out. Fortunately, it has never been easier than today to gather all the necessary data about a business. Once you get help with and find the right BI software, a business can start to gather all available information about business operations. Since BI can gather a large amount of data rather quickly and present it in a way that it is easy to comprehend and analyse, a leader can review a vast amount of information and get a clear understanding of the big picture based on critical data points.
2. Using Emotional Intelligence
Emotional intelligence is highly useful for making a decision after a fact. While it is unreliable before the facts, it can prove highly useful after the facts. When Elon Musk and his entire staff watched their rocket blow up shortly after a launch, a wave of shock, anguish, and despair swept through the large crowd of Space X employees. In an instant all their hard work, late nights, and intense dedication to the mission appeared to have come to nothing.
Ignoring the press, who were eager to get this immediate reaction, Musk faced his employees and gave an impassioned speech about how he would never give up, no matter the financial cost, and he hoped that they were with him on this mission to push humanity to become a space-faring civilization.
Suddenly, instead of feeling disheartened and wanting to give up, his employees were aroused with a fiery new determination to make the next rocket launch a complete success. If Musk had not made that instant decision, chances are that Space X would have slowly fallen apart in the coming months and years because of a huge collapse to company morale. If he had waited long enough to craft a polished speech, his words would not have had the same emotional impact and it would not have turned massive discouragement into fierce desire to overcome.
A leader shows emotional intelligence, when he or she manages their emotions in a crisis, as well as guides the emotions of everyone in the company. A leader’s emotions are contagious, and his or her mood resonates with others. In fact, it sets the tone of the corporate culture.
3. Intuitive Intelligence
Sometimes there is not enough information available to make a decision. In this case, logical intelligence is not possible and emotional intelligence is not relevant. Conrad Hilton attributed his success as an hotelier to his uncanny intuition.
In an article about his remarkable ability, Street Directory shares this story: “Once his remarkable intuition helped him buy a prestigious old hotel in Chicago. The sale was based on sealed bids. All the bids were to be opened on a select day and the hotel would go to the highest bidder. Some days prior to the deadline, Hilton offered a bid of $165,000, but that night he went to bed feeling restless and did not sleep well. The next morning he changed his mind. “It just didn’t feel right,” he said afterward. He increased his bid to $180,000. This was just right-he outbid his close rival by a mere $200.”
Leadership Is About Managing Uncertainty
Great leaders must overcome the challenges of too much information, too little information, or the fear of making a terrible mistake, and the best way to do this is by applying logical intelligence using data gathered with technology, emotional intelligence to manage people, or intuitive intelligence when neither logical nor emotional intelligence work.