Balancing Risk and Empowerment in Decision Making

Decision making is a trade-off between risk and time. As leaders, we need to create an environment where our people feel free to make decisions but that we don’t let them create too much risk.

As leaders, we say we want our people to be empowered and to go out and make decisions. We say we’re okay with them making mistakes and we’ll still support them making decisions on their own.

But not really.

I’m lucky to have a huge leadership lab in the form of the SmartBrief on Leadership weekly pulse poll. Every week I ask a leadership-related question and thousands of people respond to those polls. Sometimes I get a little sneaky and conduct my own experiments over the period of a few weeks. I conducted one of these experiments recently.

First I asked “Would you rather have a team member make decisions and make mistakes or make no decisions and leave that up to you?”

Unsurprisingly, all us empowering leaders were eager to give our team members the latitude to make decisions and make mistakes. 96% of respondents said they’d rather have a team member make a decision even if they make mistakes. A measly 4% of respondents wanted the team to leave all decisions up to them.

I observed we want our team members to take the initiative, take action and move things forward, even if they make mistakes. It is incumbent upon us as leaders to ensure that, when they do make mistakes, we realize we gave them the latitude to take action — handling the mistakes in that context accordingly. While we need to hold them accountable for the mistake, we also need to ensure they learn from it and do so in a way that we don’t make them afraid to make more mistakes in the future. Heck, I believe so strongly in this notion of decision making and empowerment that I dedicated a whole chapter of One Piece of Paper to the topic (grab a copy here and check out Chapter 13).

The following week I conducted the second part of my experiment.

I then asked “When I make a decision that results in a mistake, my leaders either:

– Accept the mistake, coach me and encourage me to make future decisions or
– Punish me for the mistake and discourage me from making future decisions

It’s not shocking that 72% said their leaders accept the mistake while 28% get punished for making the decision and making the mistake. Yes, there’s the normal “I think I’m better at this than I really am” bias at play here but the difference is pretty significant.

Clearly the majority of folks work in a supportive environment where they’re given latitude and authority to make decisions even if they result in mistakes. The worrisome part is the almost 30% don’t work in such an environment.

So how do we get past this dynamic of wanting to make decisions and have room to make mistakes without getting pounded by the boss? How do we keep ourselves from saying we want our folks making decisions but not turning into Mr. Hyde on them on the back end and punishing them?

In the first case, I’d suggest providing the feedback to your boss that you feel stifled in your ability to make decisions. Explain how that environment results in less initiative and agree upon levels of decision making authority in which you’re free to operate. Perhaps that will reduce the “punishment zone.”

As far as creating the right environment for your team to make decisions, put the right boundaries in place and ensure YOU adhere to them. For example, tell your team members they can make any decision up to $25,000 in spending. Sure they’ll make some bad choices but it’s incumbent on you to let them make those decisions then provide coaching (not punishment) on the back end. An approach like this will balance the amount of risk you take while still creating an environment where people feel empowered to make the call.

Decision making is inherently a trade-off of time and risk as well as a balance of who is or isn’t involved in the decision making process (and yes, shameless plug – we teach a course on Deliberate Decision Making that provides the tools required to be a better decision maker – drop me a line if you’re interested in learning more about the program). As a leader, your job is to manage all these trade-offs and ensure your people understand decision making criteria, rights, and risks.

The more time you invest in thinking through the decision making process and the corresponding authority/responsibility, the faster your team will make decisions and the better those decisions will be. Additionally, your team members will be much happier and feel more valued because you actually let them make the call.

– Mike Figliuolo at thoughtLEADERS, LLC

If you want to learn how to make and drive better decisions as a leader, grab a copy of my book One Piece of Paper: The Simple Approach to Powerful, Personal Leadership or download the audiobook version at Audible.com.  There’s an entire chapter dedicated to decision making.

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