Is Decision Making and its process Overrated?

Thinking on this topic  for a while but what really prompted me to write the article is this piece of baffling story I read about GM. After the 2008 financial crisis when they were on the verge of going bankrupt GM was not only looking to shore up their North American operations but also find ways to get an olive branch for their Global Operations. US Lawmakers did not allow GM to use taxpayers money to bail out their Global Operations.

Looking into that article and going thru the events that happened and how GM’s leadership took the decisions they took I was wondering about “Decision Making” and its process. Read more articles on this topic including this one from HBR.  A lot of them talked about frameworks, others talked about complex leadership capabilities and while other talked about soft skills required. 

According to Wikipedia though it is..

"In psychology, decision-making is regarded as the cognitive process resulting in the selection of a belief or a course of action among several alternative possibilities. Every decision-making process produces a final choice that may or may not prompt action. Decision-making is the process of identifying and choosing alternatives based on the values and preferences of the decision-maker.
Decision-making can be regarded as a problem-solving activity terminated by a solution deemed to be satisfactory. It is, therefore, a process which can be more or less rational or irrational and can be based on explicit knowledge or tacit knowledge.”

Decision making and its process does not demand someone making a decision to consider long-term implications of their short-term actions. Rather most of the time it is driven to solve the problem at hand and immediate short-term returns. In software world we call it "Technical Debt". And this is where I really like the MIT 4-cap leadership Model . According to their model “An effective leader makes sense of the world. To act quickly and effectively in uncertain times leaders must overcome their own unproductive responses and help others do the same.” According to MIT for a leader to be effective and lead in uncertain times they need 4 capabilities

1. Sensemaking: is the process of mapping what is going on out there so we can act in this environment that is changing. So this complexity and the sense-making component, is extraordinarily related to managerial rating of leadership effectiveness. According to an article on Forbes this is the most underrated leadership skill that does not feature in any leadership model.
2. Relating: This capability deals with how we need to take the perspective of others and encourage diverse opinions and their expressions. This also deals with negotiation and developing solutions to problems in a win-win kind of manner.
3. Visioning: Focus on what you want, not just what seems possible. Rather focus on result than what it takes to get there. This also requires a leader to create a compelling image of possibilities for their organization and articulate a vision that addresses key challenges and opportunities. 
4. Inventing: This capability requires a leader to invent new structures and processes to get work done. Learn from initial efforts at making change and modify systems after they begin to show progress and respond to unintended consequences of the change process quickly. 

Coming back to decision making and what happened at GM. Did their leadership follow a model while making their decisions? And if so did that model purely look into short-term gains without thinking about long-term implications? 

We saw how Google in 2010 decided to pull out of China. They gave two reasons. Both business and moral. WSJ commented on this decision by saying 

 "The lessons to be learned from Google's exit are not necessarily transferable to other foreign companies operating in China. Many of these companies have also compromised long-stated principles. They may choose to follow Google and leave. But they should do so knowing that Google's principled stand did not imperil its future bottom line."

If we ever have enough data I would like to see these two cases/companies and their leadership behaviors compared and see how it effected both the short and long-term direction and vision of these two companies.

Some theories say that "Sometimes the best decision is not to decide.”  At a given point the urge to make a decision given the information a leader has changes the outcomes had that same decision been made under different circumstances. So given that it is the circumstances that define and drive the outcome of a decision we spend very little little time around sensemaking and the longterm effectiviness and instead spend time on the Cumbersome decision-making processes, cognitive biases, and a false sense of the permanence of decisions. Because they all can work against leaders’ ability to sense and adapt to rapidly changing realities.

Leadership is very Personal. It is about good management,  always distributed and always should work towards change in a good way.

Couple of years back I wrote a blog on leadership and why there is scarcity for great leaders. I boils down to one core principle which is Integrity.  While covering a lot of topics one of the things I talked about is how "The context of Leadership changed over the Decades, as is the context in which we are measuring them.“ This context of measuring a leader exactly is what played a role in the decision making process at GM.

So I think Decision Making is over-rated in ways it is not intended. Leaders still need to make decisions… there are going to be consequences one way vs other and that it what is their legacy. But the results touch many lives which is very personal. 

What are your thoughts…?