When bad things happen to good bosses

Companies are looking for decisive leaders. But is decision-making all it's cracked up to be?

There's an interesting observation about the state of corporate decision-making in Andrew Wahl's “The Vanishing Boss” (see page 65), the provocative lead-off article to our cover package this issue. Marty Parker, managing director of an executive recruiting firm in Toronto, tells Wahl that there is a big demand these days for senior managers with “entrepreneurial” qualities — meaning people who can make a decision and cut through what Parker describes as “analysis paralysis.” That's a term used frequently in software development, by the way — a field that's similar to management in that it involves trying to find solutions to highly complex, and potentially unsolvable, problems, simply because there are so many factors to consider and so many shifting parameters.

In fact, analysis paralysis — the state of being side-tracked by the terms of discussion rather than addressing the task at hand — is not always a bad thing, because it can lead to more thorough consideration of factors. It's an antidote to heuristics, decision-making by rule of thumb. As Parker implies, the trend in corporations is to have more people contribute to decision-making, and the chances of analysis paralysis increase. But the upside remains, and so the quality of corporate decision-making has improved. Companies make decisions more slowly, but they are making better ones.

This might stick in the craw of the old-schoolers of the corporate world — the seat-of-the-pants, snap-decision types. And I'm not sure on what basis you could prove that companies are making better calls. But it is easy to see the factors that have contributed to the democratization of corporate decision-making.

One of them is the legacy of Enron, WorldCom and other debacles. That's not just because many of the more infamous blowups were run by autocratic leaders or executive teams — Enron's “smartest guys in the room” complex. It's also because the fallout of those scandals has been executives in handcuffs. The lesson is right out of Butt-Covering 101: share decision-making authority and decrease the likelihood of ending up the fall guy. But a more positive factor is often overlooked: the role of IT. Managers are sharing more of the information needed to make decisions simply because it's easier to share information. You don't need a meeting or a corporate retreat — you just need an e-mail message thread.

Anyway, let's accept for the moment that all this has improved the quality of decision-making. The question is: How come so many companies still screw up? Maybe just those companies that don't make good decisions are doing the screwing up. But I doubt it.

In fact, it seems to me the new way of making decisions has a few failings. One is the time it takes. Another (and it might sound heretical in this age of empowerment) is that the more you give people authority to make decisions, the less inclined they may be to think they have to put those decisions into action. And third, the resources devoted to a collaborative decision process might detract from the resources devoted to making the decisions work.

After all, it's execution that matters. Are companies getting any better at that?