How to Improve Decision-Making for Your Business by Becoming a Better Leader

By Consumer Dummies

Who do people in your business turn to in times of uncertainty, when they need to take action but don’t know what action to take, or when they have a problem they can’t solve on their own? Leaders. In short, leaders are the people others look to when a decision must be made. But you already knew that. What you may not know is what a leader isn’t: He or she is not the one with all the answers, and not necessarily the one with the authority.

Differentiating between leadership and authority

Despite their similarities, being a leader is not the same as having authority. Knowing the difference between being a leader and being in a position of authority is necessary for operating in a world where collaboration is essential. Here are some basic definitions:

  • Authority refers to officially possessing, often through a position, decision-making power.
  • Leadership refers to the quality that inspires others to move toward a common goal, to overcome hardship or difficulties, and to work together to achieve the objectives placed before them. Leadership combines vision with inspiration and telling the truth.

You can see the confusion anytime someone asks, “Who is the leader?” and everyone points to the person in charge. That isn’t leadership. It’s where authority resides. Now that same person may also be a leader, but it isn’t a forgone conclusion.

Although authority specifies which decisions you have the power to make, authority does not necessarily make you a leader. Plenty of people in authority have been ineffective leaders, and plenty of important leaders have come from the ranks of those without official authority.

Using your power for good

Leaders inspire. They turn the mundane into the meaningful and motivate others to pursue this higher purpose. They don’t have all the answers, but they ask the right questions. Leaders are decisive and visionary.

Anyone can be a leader. The notion that people fall into one of two groups — either leaders or followers — just isn’t accurate and has been debunked in the last place you’d expect: marine naval vessels. Even in strong command-and-control structures such as the military, each person can demonstrate leadership because it doesn’t have anything to do with authority. It has to do with responsibility. People are encouraged to take the initiative, come up with solutions, and act on them. This kind of trust in the capabilities of people up and down the chain of command is vital for success, not only in the military but in the civilian world, too. In fact, sustained high performance depends on it.

In environments where people are expected to take the initiative and act on the solutions they devise, the person in authority — you, as a business owner or manager — plays a completely different role: Your role is to facilitate the emergence of leadership. To foster leadership in your team, ask your employees what solutions they have to the issue at hand, and keep asking them for their ideas, even when they turn to you for direction. Then help them think through the solution (a mentoring role) and support implementation.

Some people in positions of authority wield power inappropriately just to boost their self-esteem, ego, and confidence. Doing so undermines staff morale and contribution. How you handle power and personnel when in a position of authority says everything about you.

Being a leader good enough to ask the tough questions

Groupthink — when people feel they need to conform to one view without question — is toxic for effective teamwork. It leads to important issues not being addressed and creative ideas not being offered. It preserves the status quo and leaves you and your company vulnerable.

If you move forward without clearing out the hidden issues, your leadership and your company’s growth get stuck in a holding pattern, and moving forward will feel like running waist-deep in glue. You’ll miss breakthrough moments in personal, team, and organizational performance.

Fortunately, effective leadership can overcome groupthink. Leaders must have the courage to ask the tough questions of themselves and their teams. Doing so puts the “unmentionables” on the table. By asking tough questions, you ensure that routine thinking doesn’t block achievement of your goal. The best time to ask a powerful question or two is when things are at a standstill or when agreement has come too easily. What is a powerful question? Here’s one example: “Is there something we’re missing here?”

To profit from powerful questions, do the following before finalizing the decision; this exercise is especially important when you’re making big, strategic decisions, such as whether to accept an offer to sell your business:

  1. Take a time-out between discussions.
    The purpose of this time-out is to give everyone a chance to ruminate on the issue at hand. Team members can take a walk together or alone. Don’t give specific instructions (you don’t want to lead them to a conclusion), but you can say, “Let’s take some time to think about this.”
  2. When you reconvene, ask for questions or offer one yourself.
    Breakthroughs can often result when you open up the conversation to explore alternatives not usually on the table. If allowing space for reflection hasn’t produced any questions, you can move to conclude the decision.