Q: Based on your considerable business experience, what do you think is the secret to good decision-making?
A: It is wise to stay away from politics and stick to common sense.
Don’t make decisions in a meeting. Boards are there to debate, formally approve and communicate critical findings. Good decisions are rarely made by a show of hands.
Coming to the right conclusion is an art, not a science, so don’t be fooled by a “decision platform” or PowerPoint presentation produced to prove a politically preferred answer. Decision-making can be hampered by governance and procedure. I recently heard of a university requiring 35 signatures to sign off on a £250,000 project, by which time the price had risen by 10%.
Many decisions are made by the wrong people. Too many “head office” executives create policies and processes that tell front-line colleagues what to do. These people don’t know as much as the shop staff. The best decisions are usually made by those who actually do the work.
Executives do more damage when undermining the authority of junior executives. I am completely in favor of top management meeting their most junior colleagues, but they must not be tempted to intervene without their agreement.
The head office does not manage day-to-day business. Senior managers make strategic decisions and then help others across the organization make their own decisions, so they can turn strategy into reality.
Making strategic decisions is lonely work, but no one should do it alone. Talk to as many people whose opinion you respect as possible. Fill your mind with everything you need to consider. Why do things have to change? What is your objective ? How will the team react? Will your customers get a better deal? Many questions must be resolved by one big decision.
It helps to make a list, but keep it simple. To be more precise, two lists are needed, one directed “for” the other “against”. There is no need to think too much; follow your instincts and place each key factor under one of the headings. You will quickly see if you have an easy decision.
What else? Make the easy decisions right away – go for it. The decision that most managers sleep on (too long) is whenever it is clear that a colleague should be asked to leave. The boss always sleeps better when the deed has been done.
Honest entrepreneurs admit that the best decisions and big breakthroughs are driven by a fluke or a lightbulb moment, but they shouldn’t be shy. True entrepreneurial skill manifests itself in the experience necessary to recognize a great idea when it’s staring you in the face.
The more you know about the company, the easier the decisions become. But you won’t get much help from focus groups, “in-depth analysis,” a dashboard, or consultants commissioning market research. You have to live the company, meet as many colleagues as possible, study the history of the company and make it your number one hobby.
Your question made me think of our own important decisions. For 45 years on the board, I’ve had a pretty low strike rate for mega decisions, but the big forks in the road don’t show up very often. Usually you only recognize crucial calls in retrospect. The great ones only show their importance as events unfold.
Looking back, I don’t think we’ve made more than 10 life-saving decisions in the last 53 years. The first was to introduce key cutting in our shoemaking workshops in 1969. This attempt at diversification created most of the business today.
My reluctant decision to sell our retail shoe stores in 1987 turned out to be a masterstroke. Shoe stores were on the verge of disappearing from the main street, and while other shoe chains suffered, we were free to focus on growing our service business.
The purchase of a 110-store competitor, Automagic, in 1995 made us a truly profitable business and taught us how to grow by acquiring underperforming competitors.
Our progress since then owes a lot to the decision to put frontline colleagues in control by introducing our ‘reverse management’ approach.
For the past 20 years the business has been run by my son, James, whose most important decisions have been our diversification into photo retail and moving into supermarkets.
My best decision? It’s simple: It was about marrying my late wife, Alex, who guided our company culture, taught me to break the rules, and forcefully forced me to stop IPO plans. of our company in 1991. It was a decision dominated by instinct.
Sir John Timpson is chairman of high street service provider, Timpson.
Send him a question at [email protected] and read more answers from his Ask John column here