The art of tough decision making is as much about the touchy-feely stuff as it is about business fundamentals, say 10 New Zealand business leaders. And they argue that any business leader who can make significant people-related decisions, directly impacting people’s livelihoods, and not be personally affected is unlikely to be well-rounded individual. As such, he or she probably shouldn’t be charged with steering the ship.
Contrary to popular perception, they believe that common sense, intuition born of experience and balance, not ruthlessness and thick skin, equips leaders best to make tough decisions.
Why? Simple, says Port of Tauranga CEO Jon Mayson. Leaders who are balanced emotionally, physically and “spiritually” are more capable of correctly interpreting and second-guessing the right market signals and prevailing moods.
Making strategic and tactical decisions about where to invest shareholder funds isn’t easy because leaders have to live with the long-term financial consequences of their decisions. But, these decisions become more “matter-of-fact” than inherently tough if the correct business disciplines – accurate number crunching, planning, good market intelligence and plenty of consultation – are in place, says leading entrepreneur and Endeavour Capital founder Neville Jordan.
From Jordan’s experience the real “toughies” are the decisions that pull at the heartstrings, especially where human emotions are involved. And it’s not limited to outcomes that directly affect people’s livelihoods (like redundancy) but also decisions that impact their confidence to perform effectively.
Obviously the scope and nature of tough business decisions varies greatly between companies and industry sectors. For Briscoes’ CEO Rod Duke, the biggest commitment on (some) inventory and the longest capex horizon are typically one and three years respectively. By comparison, Wellington’s Centreport boss Ken Harris won’t know if the tens of millions of dollars he’s committing to infrastructural port developments are successful for years down the track.
What makes business decisions innately tough, says Harris, is the need to make informed judgements on courses of action, based on data and possible risks scenarios that are constantly changing.
TelstraClear boss Rosemary Howard thinks CEOs must accept that there will be times when they’ll make mistakes. That said, often the best decision might be to act slowly. “Another good acid test is to check the options against the core values of the business. That level of alignment makes it easier to sleep at night – knowing you’ve made the right decision.”
Our 10 leaders
* Gilbert Ullrich, managing director, Ullrich Aluminium, Auckland
* Jon Mayson, CEO, Port of Tauranga, Tauranga
* Tim Miles, CEO, Vodafone, Auckland
* Jim Collier, CEO, Restaurant Brands, Auckland
* Jane Hunter, managing director, Hunter’s Wines, Marlborough
* Rosemary Howard, CEO, TelstraClear, Auckland
* George Bellew, CEO, Christchurch International Airport, Christchurch
* Ken Harris, managing director, Centreport, Wellington
* Neville Jordan, entrepreneur/founder, Endeavour Capital, Wellington
* Rod Duke, CEO, Briscoes, Auckland
* What attributes equip leader best to cope with tough decisions?
* How do you go about preparing for tough decisions?
* What are the most common tough decisions you face?
* Does the ability to handle tough decisions define good leader from less good leaders and if so, how?