Conclusion
In today’s fast-paced and hyperconnected global economy, leaders are pressured to make multiple decisions and do so quickly. In such a volatile environment, leaders tend not to take the time to reflect and use sound judgment; the result is hurried decisions that lead to poor outcomes for themselves and their organization. In particular, leaders who operate in the blue zone tend to decide instinctively based primarily on their own experience, without paying enough attention to the changes in the larger context. Risk averse, they may either procrastinate when faced with difficult decisions or make decisions that may yield tactical benefits but be unviable in the long term. Leaders in the red zone are more willing to make bold decisions that could generate strategic long-term benefits. But given their self-centered and emotional personality, they tend to rush into decisions without heeding their intuition, let alone getting input from others—an oversight that could lead to ethical or even legal lapses that may have a high cost.
Wise leaders are more effective decision makers due to their unique decision logic—that is, the set of systems, processes, and reasoning principles they use in decision making—developed over time and tested in different scenarios. Context awareness and ethical clarity altogether form the cornerstone of a wise leader’s decision logic. Indeed, wise leaders decide with ethical clarity—that is, they rely on an ethical compass that tells them what is right or wrong not only in a particular situation but also in a larger context that is connected to a noble purpose. This clarity gives wise leaders discernment—the ability to judge well in crises and make ethically sound and yet pragmatic decisions using a combination of logic, instinct, intuition, and emotion.
A wise decision logic anchored by ethical clarity will enable you to avoid the decision-making traps that smart leaders often fall into, such as overreliance on data, rushing into decisions without enough contextual awareness, or favoring short-term gains at the expense of long-term rewards.
Here are some ways you can learn to infuse wisdom into your own decision logic and access it consciously to make highly productive decisions. You can use these points to assess past decisions and get a clearer picture of what your traps, flaws, and automatic tendencies tend to be (and where they are operating). You can also use them more dynamically as touchstones when you are engaged in decision making:
- In addition to relying on your experiences and instinct when making decisions, pay closer attention to the broader context and explore various options that resonate well with your own values and ethics.
- Rather than evaluating options based purely on their tangible benefits, assess them based on their ability to serve a larger purpose—and then decide which among these options will get you closer to your North Star.
- Don’t let tactical execution issues or emotions sway your discrimination and discernment when making strategic decisions that will affect your own or your organization’s long-term future.
- Avoid justifying your own unique decision logic to yourself or others, even when you have an inkling that it is flawed. Rather, become mindful of your decision traps—such as an emphasis on short-term benefits or overreliance on experience—and work to consciously avoid them so you don’t get blindsided by them.
- Pay attention to three components of good decision making. First, take the time to gather complete, appropriate, and unbiased data. Second, be mindful of the context in which the decision is to be made. Third, focus on making prudent and intuitive judgments with ethical clarity. Don’t compromise on any of the three components.
- If you get stuck while trying to make a tough decision, take into account whatever data are readily available to evaluate the external context and then ultimately trust your intuition in making the final decision.
- Focus on pragmatic and ethical approaches instead of idealistic and impractical ones.
Making a decision with discernment is the first step of wise decision making. Knowing when to stick with it and when to let it go is the second step. And that requires flexible fortitude, that is, the ability to know when to hold on and when to fold, which we explore in chapter 6.
Notes
1. Isaacson, W. Steve Jobs. New York: Simon & Schuster, 2011.
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3. Dediu, H. “Apple Stores Have Seventeen Times Better Performance Than the Average Retailer.” ASYMCO, April 18, 2012. http://www.asymco.com/2012/04/18/apple-stores-have-seventeen-times-better-performance-than-the-average-retailer/
4. Isaacson, Steve Jobs, p. 373.
5. “In a Fast World, Think Slowly.” HBR IdeaCast, August 16, 2012. http://blogs.hbr.org/ideacast/2012/08/in-a-fast-world-think-slowly.html
6. “Capitalizing on Complexity: Insights from the 2010 IBM Global CEO Study.” IBM. http://www-935.ibm.com/services/us/ceo/ceostudy2010/?sa_campaign=message/leaf1/gbs/study/CEO
7. Brooks, D. The Social Animal. New York: Random House, 2011.
8. Kiely, D. A. “Mulally: The Outsider at Ford.” Business Week, March 4, 2009. http://www.businessweek.com/stories/2009–03–04/alan-mulally-the-outsider-at-ford. “In God we trust, but rest of you need to bring data” is considered to be a favorite statement of N. R. Narayana Murthy. He repeated it in his interview on February 8, 2012.
9. We use the definition of discrimination in thefreedictionary.com (http://thefreedictionary.com/discrimination) and Oxford Dictionary (http://oxforddictionaries.com/definition/english/discrimination).
10. Camille, N., A. Tsuchida, and L. K. Fellows. “Double Dissociation of Stimulus-Value and Action-Value Learning in Humans with Orbitofrontal or Anterior Cingulate Cortex Damage.” Journal of Neuroscience 31 (2011): 15048; Kovach, C. K., et al. “Anterior Prefrontal Cortex Contributes to Action Selection Through Tracking of Recent Reward Trends.” Journal of Neuroscience 32 (2012): 8434–8442; Damasio, A. R. Descartes’ Error: Emotion, Reason and the Human Brain. New York: Picador, 1994; Kennerley, S. W., et al. “Optimal Decision Making and the Anterior Cingulate Cortex.” Nature Neuroscience 9 (2006): 940–947.
11. Moreno-Lopez, L., et al. “Neural Correlates of Hot and Cold Executive Functions in Polysubstance Addiction: Association Between Neuropsychological Performance and Resting Brain Metabolism as Measured by Positron Emission Tomography.” Psychiatry Research, September 5, 2012, 214–221.
12. Blakemore, S. J., and T. W. Robbins. “Decision-Making in the Adolescent Brain.” Nature Neuroscience 15 (2012): 1184–1191.
13. Tamir, M., and B. Q. Ford. “When Feeling Bad Is Expected to Be Good: Emotion Regulation and Outcome Expectancies in Social Conflicts.” Emotion 12 (2012): 807–816; Ford, B. Q., and M. Tamir, “When Getting Angry Is Smart: Emotional Preferences and Emotional Intelligence.” Emotion 12 (2012): 685–689; Tamir, M., and B. Q. Ford. “Should People Pursue Feelings That Feel Good or Feelings That Do Good? Emotional Preferences and Well-Being.” Emotion, February 6, 2012, 1061–1070. doi:10.1037/a0027223.
14. Pillay, S. Life Unlocked: Seven Revolutionary Lessons to Overcome Fear. New York: Rodale, 2010.
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18. Marshall, G. “Stimulus Discrimination.” A Dictionary of Sociology Encyclopedia.com, September 4, 2012. http://www.encyclopedia.com/doc/1O88-stimulusdiscrimination.html.
19. Foresman, C. “Apple Store May Be Shifting from Customer Experience to Profit Machine.” Ars Technica, August 28, 2012. http://arstechnica.com/staff/2012/08/op-ed-apple-store-may-be-shifting-from-customer-experience-to-profit-machine/; Elmer-DeWitt, P. “Report Traces Apple Store Turmoil All the Way to Tim Cook.” CNNMoney, August 29, 2012. http://tech.fortune.cnn.com/tag/apple-stores/
20. Kawamoto, D., B. Heskett, and M. Ricciuti. “Microsoft to Invest $150 million in Apple.” CNET, August 6, 1997. http://news.cnet.com/2100–1001–202143.html
21. “Photos: Microsoft-Apple Collaboration, the 10 Greatest Moments.” http://www.techrepublic.com/photos/photos-microsoft-apple-collaboration-the-10-greatest-moments/479462?seq=8
22. Lunsford, L. “Praise Heaped on Veteran Airman for Pulling Off Rare Feat.” Wall Street Journal, January 16, 2009. http://online.wsj.com/article/SB123205611103787217.html
23. “Seven Generation Sustainability.” eAlmanac. http://www.ealmanac.com/1891/numbers/seven-generation-sustainability/
24. Hemp, P., and T. A. Stewart. “Leading Change When Business Is Good: An Interview with Samuel J. Palmisano.” Harvard Business Review (December 2004): 60–71.
25. LaMonica, M. “IBM Vows to Make Computing Pervasive.” CNET, September 23, 2003. http://news.cnet.com/IBM-vows-to-make-computing-pervasive/2100–1012_3–5080866.html; and “Smarter Cities.” IBM Journal of Research and Development 55, nos. 1&2 (2011).
26. “Speeches: Samuel J. Palmisano.” IBM, November 9, 2011. http://www.ibm.com/ibm/sjp/11_09_2011.html
27. Thompson, D. How Prediction Markets Turn Employees Into Visionaries. Boston: Harvard Business Press, 2012.
28. Ibarra, H. “Is ‘Command and Collaborate’ the New Leadership Model?” Harvard Business Review (blog), February 3, 2012.
29. Ibid.
30. Radjou, N., J. Prabhu, P. Kaipa, and S. Ahuja. “The New Arithmetic of Collaboration.” Harvard Business Review (blog), November 4, 2010.
31. Fast Company Staff. “Letter from the Editor: The Lessons of Innovation.” Fast Company, February 14, 2012. http://www.fastcompany.com/magazine/163/the-lessons-of-innovation
32. “Your Personal Best: Jill Bolte Taylor.” Success. http://www.success.com/articles/936-your-personal-best-jill-bolte-taylor
33. Suszynski, M. “What Is Anticipatory Anxiety?” Everyday Health, April 28, 2010. http://www.everydayhealth.com/emotional-health/anxiety/what-is-anticipatory-anxiety.aspx; Pillay, S. S. Your Brain and Business: The Neuroscience of Great Leaders. Upper Saddle River, NJ: FT Press, 2011; Lieberman, M. D., T. K. Inagaki, G. Tabibnia, and M. J. Crockett. “Subjective Responses to Emotional Stimuli During Labeling, Reappraisal, and Distraction.” Emotion 11 (2011): 468–480; Kanske, P., et al. “How to Regulate Emotion? Neural Networks for Reappraisal and Distraction.” Cerebral Cortex 21 (2011): 1379–1388.
34. “Crisis Is the New Normal, Says Carlos Ghosn.” Renault Nissan, November 21, 2011. http://blog.alliance-renault-nissan.com/blog/crisis-new-normal-says-carlos-ghosn
35. “Leading in the 21st Century.” McKinsey Quarterly, June 2012.
36. Sacks, D. “Working with the Enemy.” Fast Company, September 1, 2007. http://www.fastcompany.com/magazine/118/working-with-the-enemy.html
37. Ibid.
38. For an explanation of the Mithya Wheel, go to http://mithya.prasadkaipa.com/pyramids/mithyawheel.html
39. Kip Tindell, interview with Prasad Kaipa and Navi Radjou, January 25, 2012.
40. “Three Good Hires? He’ll Pay More for One Who’s Great.” New York Times, March 13, 2010.
41. “Putting Our Employees First.” Container Store, http://standfor.containerstore.com/putting-our-employees-first/
42. Personal interviews with seven Google and Facebook employees, September 2012.
43. Madrigal, A. C. “The Steve Jobs ‘Reality Distortion Field’ Even Makes It into His FBI File.” Atlantic, February 9, 2012. http://www.statmyweb.com/s/reality-distortion-field
44. Palmisano, S. “Thoughts on the Future of Leadership.” IBM, September 11, 2011. http://www.ibm.com/ibm/sjp/09_20_2011.html
45. Prasad Kaipa served as a consultant to various projects at Boeing between 1992 and 2011. During that period, he had an opportunity to interact frequently with Alan Mulally who worked at Boeing until September 2006.
46. We gained insight into IBM’s decision logic involved in selling the PC business to Lenovo and exiting the hard disk business from interviews we conducted with Bernie Meyerson, vice president, innovation and global university relations, IBM, on October 24, 2011, and Ted Hoff, global head of leadership development, IBM, on February 4, 2011.
47. “HP to Keep PC Division.” HP, October 27, 2011. http://www.hp.com/hpinfo/newsroom/press/2011/111027xa.html