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The Cost-Risk Analysis All Leaders Should Weigh When Making a Hard Decision

The Cost-Risk Analysis All Leaders Should Weigh When Making a Hard Decision
Photo Credit: Stocksy
By Courtney Connley

Textbook leadership advice doesn’t always apply to women who also need to address for bias. In our series, When the Rules Don’t Apply, experts will explore real, nuanced solutions to help women executives navigate their lived experiences as they rise up in leadership.

Let’s face it, fear is an inevitable emotion that we all face at some point in our careers, if not regularly. The fear of failure, lack of inclusion, or for many women leaders, a fear of not being liked, can crop up daily, and can impact how we make decisions, lead, and show up at work.

According to Dr. Laurie Cure, author of Leading Without Fear, fear can be seen as a motivator when we have control over our circumstances. That’s why, she says you’ll often hear sports leaders talk about how they use fear as a driving factor because the outcome of their game is often dependent upon their personal performance. But in moments like today where so many factors are uncertain, with the slow economy, inflation, and the unknown impact of AI, Dr. Cure says that fear can easily impact not only a leader’s productivity, but also the productivity of those around them.

“I was working with an executive leader who had an individual on her team who for a number of years had really been leading from a place of fear,” Dr. Cure says. She explains that the leader was aggressive in their body language and tone, and they often withheld important information from their team when communicating, all of which are signs of fear-induced behavior. As a result, Dr. Cure said that the team started to shut down.

“They worked around him,” she says. “They didn’t come forward with creative ideas or solutions, and it impacted their objectives, their finances, and the projects they led.”

In addition to fear impacting productivity and a leader’s relationship with their staff, Susan Steinbrecher, executive coach and CEO of Steinbrecher and Associates, Inc., says that fear can also lead to delayed decision-making, which can cause missed opportunities for growth.

“That’s a big problem because I’ve seen people get stuck in analysis paralysis where they keep wanting more and more data,” she says. “But that can sometimes lead to missed opportunities like entering a new market, adapting to a changing customer need, or capitalizing on an emerging trend. All of those are things you’re going to have to react very quickly to if you’re going to benefit from them.”

Delayed decision-making, she says, also impacts company morale because “when decisions are delayed you lose momentum and productivity from your team.”

“They’re all sitting around waiting for leadership and wondering, ‘Are we doing this or not,’” she says. “Then they become uncertain, they become disengaged, and there’s an impact on morale because they’re not seeing things move forward or they’re not seeing the leadership that they’re expecting.”

While it’s common advice to tell leaders to eliminate fear when making a decision, Steinbrecher says that following this advice isn’t as simple as it may seem. For leaders who are faced with a tough situation that has no clear answer, Steinbrecher says that following the below three steps could help.

1. Get Honest and Assess Your Current Business Situation

This means, Steinbrecher says, getting a comprehensive understanding of the current state of your business, your industry, and the broader economic environment that you’re in. This can be done by gathering all relevant data and information about your company, along with listing the uncertain factors in your organization.

“Really get an assessment of what the challenges are that you’re facing, the risks, and the opportunities because everybody always thinks about the downside of uncertainty, but there might be several opportunities that could be further leveraged,” she says. Doing this, Steinbrecher explains, will help you dig into the reality of what’s really happening in your company and industry versus overthinking with fear about the unknown.

“Having a diverse support circle is critical when making decisions.”

– Susan Steinbrecher, Executive Coach and CEO of Steinbrecher and Associates, Inc.

2. Create a Decision-Making Process

After doing a solid assessment of your business, Steinbrecher says leaders should then create a decision-making protocol to ensure that all decisions are run through a standard set of eyes and processes. Part of this protocol, she says, should include time for leaders to breathe and think through the decision they’re about to make without quickly reacting. But to avoid sitting in this stage for too long, she says leaders should “have a process in place that says within a period of time we need to be moving to the next phase.”

“You have to have a code of conduct or a way that you go about making decisions as an organization because that’s your way of navigating through complex times,” she says. This includes having clear objectives of what you’re hoping to get out of the decision-making process and having a diverse set of leaders and individuals you consult with when making your decision.

“Don’t just look at what one person says or one group says. Talk to subject matter experts, key stakeholders in your business, and team members themselves, especially those who are closest to the customer,” she says. “That’s when you’ll start to gather the right intel that’s going to allow you to make better informed decisions.”

For women leaders who often second guess themselves due to systemic biases and barriers at work, Steinbrecher says that having a diverse support circle is critical when making decisions.

“It’s essential for women leaders to build that network of peers or mentors, coaches, and allies who can provide guidance and support and encouragement when you’re ready to say, ‘Hey, I’m about to pull the trigger on something pretty significant here. What have I missed? Can you help me think through that?’ And allow half those people to tell you, ‘You’ve made great decisions. You’re in the position you’re in because you’ve done that and trust that no one is perfect,’” she says.

Once you’ve gotten informed insight from others, Steinbrecher says you should then start weighing the alternatives to the decision you’re about to make. Ask yourself, she says, “What are the pros and cons of this decision? What are the risks associated with it? What is the short-term implication and the long-term implication? And of course, if there are risks, then how would we mitigate them?”

“Trust that no one is perfect.”

– Susan Steinbrecher, Executive Coach and CEO of Steinbrecher and Associates, Inc.

3. Monitor Closely and Learn the Outcomes of Your Decision

After finalizing your decision, Steinbrecher says leaders should then communicate to their team the challenges they’re facing, the decisions they’re making, and the rationale behind those decisions so that all parties are aware of what’s going on as a company. Then, once the decision has gone into effect, she says leaders should quickly pay attention to the outcomes they are noticing to see if they should adjust their approach.

If there is negative feedback or perceived failure from a decision, Steinbrecher says leaders should then take a step back and ask themselves and their team why they think that outcome occurred. “It’s not a point the finger thing,” she says. “It should be a debrief or an exercise of what happened. Why do we think that happened? What did we potentially miss? What did we get right?” Doing that kind of analysis, she says, is helpful because it builds corporate wisdom by allowing leaders to see what valuable lessons they learned from their mistakes.

“That discipline is very important,” she says. “But you don’t see it often because so many of us are always just onto the next project.”