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.
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
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.”
What attributes equip leader best to cope with tough decisions?
Gilbert Ullrich There’s no substitute for industry experience when it comes to surviving tough markets and economic conditions.
Jon Mayson Self confidence, the ability to think on your feet, and adherence to core company values – integrity, teamwork, innovation and communication – help me cope with difficult decisions. Business decisions shouldn’t be tough unless they’re totally unexpected. Avoiding the unexpected means being adequately briefed by good people around you.
Tim Miles Business education and experience help with rational decision making. When it comes to dealing with people, honesty is key ingredient in managing staff expectations – especially when someone isn’t performing or where they have unrealistic aspirations. It’s more important to be up-front rather than string them along with false hopes.
Jim Collier Day-to-day management activity doesn’t usually require tough decisions. If it does, there’s probably something wrong with the organisation. You make difficult decisions easier the more you articulate vision and align the organisation behind it.
Jane Hunter Experience at the management and board level is by far the biggest asset when it comes to (handling) tough decisions. Having grown up on vineyard, I rely lot on intuition.
Rosemary Howard I take the philosophical stance that impacting our industry isn’t beyond our control. It’s easier to make tough decisions when the entire organisation is aligned to your business model.
George Bellew Balanced CEOs are in better shape physically and psychologically to make better decisions and second-guess what impact the unexpected will have on the market place – especially when it’s not possible to have the complete picture of something. To strike the right balance, CEOs need good support infrastructures both within and outside their work environment.
Ken Harris Sound values add sound framework to all the decisions we make. Balanced individuals are more equipped to make the right decisions for all stakeholders.
Neville Jordan It’s important for leaders to remember that they’re only ever making decisions based on incomplete data. So it’s important to develop feel for the right judgement call.
Rod Duke Being able to cope with stress is minimum entry point for any business leader. Typically that comes down to good intuition and balance. For me, balance means having home life that’s unrestrictive on time that can be spent on the business.
How do you go about preparing for tough decisions?
Gilbert Ullrich I give branch managers free rein until they call for help. It’s critical to have intimate knowledge of your local and global market and industry. That means having communication networks that can feed through market intelligence on what the market’s doing at any time. It’s equally important to watch commodity and forex price movements closely.
Jon Mayson Staying in touch with the market and economic analysis is large part of our decision-making process, but all decisions boil down to common sense. Preparation depends on good delegation, then if necessary, taking the reins on difficult decisions. That means ensuring you understand the business and the needs and aspirations of customers and the industry – especially during expansion.
Tim Miles You can only get to the point where you’re comfortable with what’s right by thorough homework. My management team tends to make unanimous decisions.
Jim Collier Sufficient research ensures clear enough vision to make critical decisions. That means understanding everything you can about every aspect of future deals.
Jane Hunter I’m great believer in planning and communicating expectations early. The trick is to second-guess what volumes are right for each market, especially in light of low crop and constantly changing dollar. That means doing your homework. Frank and open dialogue with trustworthy agents and distributors provides market intelligence needed to make informed decisions.
Rosemary Howard We’re paid to make judgements with as full view of the direct and indirect consequences as possible. That means thinking everything through and delivering outcomes in sync with the company’s values.
George Bellew It’s important to have management team that’s capable of analysing information and being alert to the ebbs and flows of the business. That means picking up on the signals the market is trying to convey. Preparing for tough decisions requires as much solitary reflection as it does attracting divergent views from the management team – and global net
