Decisions, Decisions: The Decision-Making Models Every Leader Must Know
The core role of any manager is to make decisions. As a business leader, you may face dozens of high-stake decisions - day in, day out that affect customers, employees, contractors, stakeholders, their employees, the list goes on. The ability to make the right decisions at the right time can make or break a career.
It’s hard to imagine a senior corporate leader stood around scratching their head or locking themselves in a broom closet to agonise over whether they made the right call because great leaders are often great decision-makers. The best leaders balance intuition with reason to make the best possible call in a high-stakes environment.
Contrary to what many people assume, this ability to make great decisions isn’t innate – it comes with practice and knowing which decision-making model is right for the job.
What are decision-making models?
Decision-making models are, essentially, tools that help leaders make clear, unbiased decisions. Just as the design of tools differs for different DIY tasks, decision-making models suit different situations.
Here we will discuss four basic decision-making models, their pros and cons, and when to utilise them.
The Rational Model
The rational decision-making model involves using a clear-cut sequence of steps to tackle the issue at hand.
Think of this model as the antithesis of “going with your gut”.
This model breaks down into the following five steps:
- Clearly define the problem - take the time to fully understand it. Look at potential pitfalls and identify your ideal outcome.
- Identify your solution criteria – Create a list of “boxes” you need your solution to tick.
- Order criteria by importance – Organise your criteria boxes in order of importance. You’ll rarely find a solution that ticks every box equally, so you’ll need to have priorities.
- Brainstorm potential solutions - Spend some time coming up with solutions that tick these boxes.
- Pick the best fit – Identify and implement the solution that ticks the most high-priority boxes.
When to use: The rational model works well when you need to manage risk or uncertainty, as it allows you to objectively compare solutions with desired outcomes and make the safest choice. Stepping back to analyse the issue will show you where your priorities are, so in this respect, rational decision-making is well-suited to complex problems.
When not to use: This model is less appropriate if your problem is time-dependent and you need to make a rapid decision. Rational decision-making also relies on you having a full picture of the metrics involved and is therefore not suitable if you’re missing key information.
The Intuitive Model
As you might expect, using the intuitive decision making model involves following your instincts. While still a valid and recognised decision-making method, the intuitive model doesn’t have readily definable “processes” in the same way as other models we discuss here.
Though it isn’t wise to rely solely on your intuition too often, following your gut can save you from becoming bogged down with complex evaluations that only serve to sap time and lead you further away from an obvious solution.
When to use: Use the intuitive model when, and only when, you are in your comfort zone. You can only make the right instinctive decision if you have an in-depth knowledge of all processes involved. It is the ideal model to use with time-dependent decisions when you’re highly familiar with the situation.
When not to use: Do not rely solely on your intuition if you lack the experience to accurately predict the outcome of your choices. It may also be an unwise choice if making the wrong decision could result in severe, negative consequences.
The Recognition-Primed Model
The recognition-primed model sits somewhere between the rational and intuitive models; you’re using your experience and intuition but in a more structured way.
This model is ideal for leaders with expert knowledge of the situation - but need to place a greater emphasis on risk management.
How it works:
- Identify your immediate, intuitive solution – Ascertain what your gut tells you to do, first and foremost. Then identify the next best solution(s).
- Mentally test it out - Take your first solution and mentally work through how it would play out in practice. If it still seems viable, run with it.
- Repeat - If mentally working through the situation indicates your initial instinct is too risky, repeat the process with your second and third solutions until you find an option that fits.
When to use it: This model relies on making good intuitive decisions based on knowledge and prior experience and is best suited to making high-risk decisions quickly. It is often used by leaders in the emergency service industry - due to the high-risk nature of the problems faced.
When not to use it: Recognition-primed decision making is only appropriate in the above circumstances. If you’re comfortable and time is of the essence, yet the risk is minimal, you’d be better off relying solely on intuition. Equally, if time isn’t an issue, using the rational model could be a better move.
The Vroom-Yetton Model
The Vroom-Yetton decision-making model serves a slightly different purpose to the others we've discussed.
It specifically relates to group decision-making situations where the leader may choose to consult or collaborate with subordinates.
Vroom-Yetton helps you to decide:
- Whether to involve team members in the decision, and
- To what extent
Depending on these two factors, the leader will choose from the following five sub-models:
- Autocratic Type 1 – is an autocratic process where the leader makes their decision based on the available information.
- Autocratic Type 2 – is when a leader collects information from subordinates and then decides alone.
- Consultative Type 1 – the leader consults with group members individually to gather information and facilitate input. However, there is no stipulation that the input is used to make a final decision. Individual group members do not consult amongst themselves.
- Consultative Type 2 – in this case, individual group members can consult each other and share possible alternatives. Again, the leader is under no obligation to incorporate group solutions into the final decision.
- Collaborative Type 2 – the leader looks to the group for consensus through brainstorming and the decision is made collectively. The leader must not try to force their agenda.
Choose type 1 or 2 when:
- Time is limited (how limited will determine whether you choose option 1 or 2)
- You are experienced enough to make the call
- Your team members will not oppose the choice
Choose type 3, 4 or 5 when:
- You have enough time to consult (how much time determines whether you choose 3, 4 or 5)
- You need more information or lack experience
- Your team members could overturn your decision if they disagree with it
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