Leader decisions part 2: How well do leaders make decisions?

Since 2002, my colleagues and I have been documenting how leaders approach complex decisions with an assessment called the LDMA (Lectical Decision Making Assessment). The LDMA asks test-takers to explain how they would approach and resolve a complex workplace decision.

For more, see Part 1 & Part 3.

In an earlier post, I described results from an analysis of the VUCA skills of 2057 leaders. We found that, on average, the level of leaders’ VUCA skills did not rise to the complexity demands of issues faced in their roles. This post provides additional evidence (from the same 2057 leaders) related to four specific aspects of the decision-making process, including:

• whether or not leaders described something that looked like a decision-making process when prompted to do so,
• whether or not the decision-making process described in response to this prompt seemed to be related to the process actually applied when leaders addressed the dilemma posed in their assessment,
• whether or not leaders could provide more than one satisfactory solution to the dilemma posed in their assessment, and
• whether or not leaders considered the context in which the dilemma posed in their assessment developed as a potential cause of the problem.

We found that:

• When asked to describe a general decision making process for resolving dilemmas like the one addressed in the assessment, only 54.5% of test-takers described an actual decision making process — one that minimally involved problem identification, data gathering, and a decision making or implementation step. Most of the remainder either limited themselves to gathering information (then making a largely intuitive decision) or simply describing an implementation process (as though a decision had already been made). The vast majority of the decision making processes described were missing several key elements of a reasonable process, suggesting that most of the leaders in our sample had never truly learned a formal decision-making process.
• The decision-making processes described by leaders often did not resemble the decision-making process they actually applied when resolving the dilemma. Only 39.4% of the leaders in our sample described a decision-making process that was clearly related to the process they applied when addressing the dilemma. This suggests a gap between decision-making knowledge and decision-making skill.
• When asked to provide a second approach to solving an ill-structured problem, only 20% of test-takers generated a second approach they viewed as equal in quality to their first approach. This was true despite the fact that all of the dilemmas addressed by test-takers were designed to have no single correct solution and many possible reasonable solutions.
• Although 35% recognized that the organizational culture, process, structure, or other context may have played a role in creating the problem described in the dilemma, only 7.9% described one or more specific ways in which the culture or context could have contributed to the problem. Put another way, most leaders looked for proximal causes in the form of particular stakeholders or specific events. And most often, it was individual people who were viewed as the cause of a problem.

These results, combined with those reported in the earlier VUCA article, suggest that one of the most important things we can do for individual leaders is to help them become better decision-makers—and that means building both decision-making knowledge and skill.

Not one of these variables was highly correlated with the developmental score (Lectical Score) received on the LDMA, indicating that (1) complex reasoning is not necessarily required for the development of these skills and (2) more complex reasoning does not guarantee their presence. This doesn’t mean that thinking complexity isn’t important. It’s still the best single predictor of overall decision-making performance. But it does mean that thinking complexity is not sufficient to guarantee a high quality decision. In other words, we can’t make an optimal decision without a nuanced understanding of a given problem, but we can have a nuanced understanding of a situation and still lack the specific skills required to turn that understanding into a high quality decision.