3 Secrets to Making Great Decisions

I worked with a vice-president of a major corporation who was a great decision maker.

“You make such good decisions. What’s your secret?” I asked.

“First, I decide if I have a choice,” he told me. “If not, I don’t waste my time deciding.”

That advice has often saved me from mulling over a fact of life that can’t be changed. When I genuinely have a choice in a difficult leadership decision, I rely on ten helpful questions.

1. What are my options?

J.C. Cain, a distinguished doctor of Mayo Clinic, once told me, “A great diagnostician knows the most symptoms. Any practicing doctor can diagnose the common illnesses. At Mayo, we specialize in knowing and thus seeing what’s not obvious.” Similarly, those who know the most options see what’s not obvious and make a better decision.

Robert McNamara, former president of Ford Motor Company, once asked an executive who brought him a decision, “What did you decide not to do?” He wanted to know that the person had thought of more than one way.

The secret in developing options is doing our thinking early. If we wait till the last minute, we don’t have time. I’ve become so option-driven that my son, Fred, gave me an engraved sign: BUT on the other hand. Increased options increase our chance of being right.

2. Is this mutually beneficial?

Maxey Jarman, who built Genesco to become the world’s third largest apparel company, was one of my mentors. He acquired many businesses as he built the corporation, and he would say, “Don’t drive a bargain so hard that the other person becomes a loser.” That creates a wedge in the relationship and generates retaliation.

Some decisions are difficult to make mutual. Several times, I’ve had to let an employee go. I agree with the chairman of a bank who called such moments “throw-up time.” No effective executive I know enjoys firing people.

Yet many times, looking back, both the employee and I have seen it was the best thing that could have happened. Roger Hull, who was chairman of Mutual of New York, once said to me, “I’ve lived long enough to have people whom I fired come back and thank me for their termination.” (I don’t want to paint this too rosy; the hurt of being let go can last a long time.)

Harvard University commissioned a thirty-year study of successful CEOS. One common trait among them: altruism. I define altruism as this—”I give before I receive.” That attitude makes for mutually beneficial and better decisions.

3. What’s the risk?

Once in New York City, I looked out my hotel window and saw several teenagers walking an eighteen-inch ledge, thirty stories up, with no railing to grab. I couldn’t look. These students hadn’t calculated the risk and the reward.

This principle of calculating the risks is seen in the verse, “What good will it be for a man if he gains the whole world, yet forfeits his soul?” The benefits of temporary gain are offset by permanent loss.

I’ve heard some Christians confess things in a small group that they should have kept to themselves. I think they got a short-term reward—they felt better—but in the long run, their confession proved disastrous to relationships. The risk was too high.

To accurately assess the risk, we must know when enough is enough. A 27-year-old man I know, worth $3.5 million, recently ran across a business deal that promised to convert his present net worth into $25 million. He asked my advice.

“What can $25 million do for your family,” I said, “that $3.5 million can’t? It’s too risky. You’ll be jeopardizing your wife and children’s security.”

He gambled and lost. Fighting bankruptcy, he and his wife are laden with debt during the years they should be enjoying their small children.

Money isn’t the only thing we need to say “enough” to. What about prestige, ministry, power?