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Business Visioning

Decisions, Part One — Choosing a Decision Style

Regardless of your actual title in an organization, your job involves making decisions. New staff members start making decisions the day they are hired, and beginning with their decision to accept the job, we hope their decisions will be good ones. One of the basic tenets of Bottom-Line Training — clear, documented expectations — is based on the belief that when people fully understand what is expected of them, they will make better decisions.

With that said, the amount of decision-making required, along with the negative impact of poor decisions, tends to increase as people progress to leadership positions. In order to move ahead as an organization, decisions need to be made. Sometimes, organizations get stuck because one or more managers avoid making important decisions, fearing that their choices may be the wrong ones.

The managers I know who are best at making and implementing decisions are those who have come to terms with the fact that there is almost never one perfect answer to a given business situation. Therefore, instead of trying to make the perfect decision, they simply do their best to make a good decision and then move on to see what happens next. As Peter Drucker wrote in The Effective Executive:

” A decision is a judgment. It is a choice between alternatives. It is rarely a choice between right and wrong. It is at best a choice between ‘almost right’ and ‘probably wrong’ — but much more often a choice between two courses of action, neither of which is provably more nearly right than the other.”

One of the tools that effective managers use to make better decisions is an understanding of the various decision styles and which style will work best in a given situation. Understanding these styles can help you, too.

The Four Decision Styles

The decision making process has been analyzed by many scholars and business consultants, including Victor Vroom. He studied when and how to involve others in order to obtain the best implementation of a decision. In our management training at Zingerman’s, we focus on a simplified version of Vroom’s model. We group decision-making into four basic styles: Command, Consultative, Consensus, Delegated.

1. Command Decisions

As the name suggests, a command decision is made by an individual alone. Although the decision-maker may solicit information from others, he or she does not look to others for advice or opinions. The command style works well when the decision is likely to be easily accepted by others in the organization. For example:

a) In crisis situations — “The storeroom is on fire; I’m calling the fire department.”

b) When the decision is consistent with strongly held and well-understood organizational principles — “Coming to work drunk is unacceptable; I’m sending you home.”

c) For issues that do not warrant a investment of organizational resources — “Yes, let’s run those flyers on gold paper, not on blue.”

The command style is not a good choice when you face an important decision and need acceptance and support of that decision by others.

2. Consultative Decisions

In consultative decision, the decision-maker has the final say but actively solicits the suggestions and opinions of others and takes these opinions into account when making the decision. The ideas, suggestions, and recommendations of others give the decision-maker better information upon which to base the decision and also ensures that others have a stake in the outcome and implementation of the decision.

Two important tips for using the consultative style effectively:

Make sure everyone clearly understands that you welcome and encourage their input but that you will be making the final decision and it may not agree with some of the suggestions you have received.

If your decision does go against the advice or suggestions of specific individuals, touch base with them to explain your reasoning. By demonstrating that you didn’t ignore their input, you increase the likelihood that they will actively support the implementation of the decision, even though it does not reflect their beliefs.
3. Consensus Decisions

Consensus making decision is by far the most effective for getting organizational buy-in. It is also initially the most time consuming. An argument can be made that the initial time spent in obtaining consensus is saved later on during implementation because everyone involved has invested in the decision’s success.

Reaching consensus not the same as taking a vote. In a true consensus decision, the proposal has evolved to a point that everyone involved agrees to support the decision as if it was his/her preferred plan of action (which it may or may not be). For example, in Zingerman’s Partners’ Group meetings (our version of a board of directors), we define “reaching consensus” as “every member is at least 80% satisfied with the proposal as written and can leave the meeting supporting the decision 100%.”

Obviously decisions can also be made by majority vote and often, the term “consensus” is used loosely. “The consensus of the staff was to have the party on July 4″ probably means that the majority voted for July 4. Voting is usually quicker in the short run (the most recent presidential election notwithstanding), but results in winners and losers that can hinder efforts to implement the decision. The more important the decision and the more that effective implementation depends on acceptance and support by those affected, the stronger the case for consensus.

4. Delegated Decisions

Sometimes we assume that we should be involved in making a certain decision, but in fact we don’t need to be — and sometimes should not be. There are many situations in which individuals on our staff, working alone or as a group, are much better qualified than we are to evaluate alternative courses of action. One of the most successful things we’ve done is form a Benefits Committee chaired by the HR director and made up of representatives from throughout the organization. This group is responsible for evaluating organization-wide benefits, including health care coverage, insurance providers, paid time-off policies, and for making recommendations on new or modified benefits to the Partners’ Group for final approval.

In the past, our HR director would bring recommendations directly to the Partners’ Group, but every decision we made caused dissatisfaction somewhere in the organization. Now the committee, made up of managers, supervisors, and front-line staff, wrestles with the tough issues: how to provide benefits that appeal to longer-term, established employees (looking for health care, 401Ks, family insurance coverage), as well as to the many student-aged staff (looking for higher hourly wages and generous employee meal benefits), while still meeting budget targets. There is now much greater organizational acceptance of benefits decisions and better understanding of the budget constraints because all of the key constituencies have a say.

As managers, who know that it’s only a matter of time before the opportunity for yet another decision will present itself, so it makes sense to try to learn from each decision we make. As you think about past decisions and evaluate their bottom-line impact, add decision style into the mix and see if next time in a similar situation, you might choose a different style. It’s also possible to “mix and match” decision styles. For example, a manager may delegate a decision to a group, along with making a command decision that the group must use consensus to reach its decision. Of course, choosing the most effective decision style is only one part of making and implementing an effective decision.