Wise Decision-Making: Stepping Up to Sustainable Performance
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A 3 pillar model for Wise Decision Making
Focusing on factors over which leaders can exercise some control, our model addresses:
- 1. Self Leadership: how leaders exercise self-governance
- 2. Motivational Drivers: what drives leaders’ choices
- 3. Hygienes: how leaders nourish their decision-making ‘health.’
From smart to wise, what’s the difference, and why should it matter?
Smart decision making is critical to create and capture economic value. But it is unlikely to equip leaders (and organizations) to deal with today’s complexity, or ultimately earn legitimacy.
Wise decision-makers take specific measures to address modern business dilemmas in a holistic way. Not only do they create and capture economic value, they build more sustainable and legitimate organizations.
Step by step to sustainable performance: A guide to the study
1. Concepts, data, and a clear framework with practical tools and steps.
- Discover the areas in which your C-suite peers are most challenged
- Gauge your own propensity for wise decision-making
- Pinpoint avenues for personal development and coaching to make wise(r) decisions
- Identify ways to take these concepts and tools to your teams and Board.
2. Dashboards
- 1. A round up for individual leaders, with key questions and tools.
- 2. Key questions for Boards and leadership talent strategists
Topline Findings
1: SELF LEADERSHIP: Leaders are on the path from smart to wise, but missing vital steps and opportunities
Most leaders are smart problem-solvers. Yet few reflect on their experience, or ‘reflect in action’ (think about thinking). When they feel cheated, problem-solving becomes more difficult still. Many are self-confident and optimistic (which is vital for leadership). On the downside, fewer systematically stop or adapt a decision in the face of counter-evidence or risk. Leaders are also missing opportunities to balance self-confidence with decision-making engineering and mechanisms that will help them transcend bias. Often neglected, too, is the involvement of diverse, qualified (and especially confrontational) stakeholders. In human interactions, compassion is fragmented, so is humor, (a way to diffuse tension and pride).
- Leaders are missing their rear-view mirror: only 10% consciously reflect on their experience. Only around 1 in 10 reflect on past events, or recall the past to see if they have changed. Those who do are gaining knowledge and perspective.
- Few leaders master reflection in action: only 12% always think about thinking. ‘Reflection in action’ involves taking a step back. On average, across 5 practices, only around 1 in 10 leaders always do this when making a difficult decision (12%), 35% generally do. Around twice as many always take distance on the content level (19%) than in terms of feelings, habits, and mental leaps/generalizations.
- Many leaders are speeding without a safety belt: 40% display high self-confidence (which may cause some biases). Self-confidence is critical for leaders. 4 in 10 strongly believe they'll succeed at most endeavors. But under 5% really agree that thinking about all the risks makes them hesitate or delay difficult decisions.
- Leaders are under-using a powerful toolkit to transcend bias: 33% will always stop or adapt a decision facing counter-evidence. Of a range of bias management tools presented, 3 are buried at the bottom of the toolbox, used by only 30%-40 e.g., imagining the advice they would give someone else if they were not involved. In the middle, deployed by 40%-60%, is intuition. Combining System 1 (fast, intuitive) and System 2 thinking (slow, rational, analytical) is smart, yet only around half of leaders do.
- Leaders are failing to systematically involve the right people in decisions: 52% generally or always use stakeholders as allies to validate their opinions. 30% of leaders systematically interview top executives one-on-one, 23% involve different groups. Only 36% select stakeholders on knowledge or competence, 4% involve ‘difficult’ people. Looking at what leaders generally or always do, the majority are creating good conditions. Even then, 52% use stakeholders as allies.
See the Full Amrop Report for more:
- Why reflecting on experience can lead to wiser decisions.
- 5 ways to exercise reflection in action.
- Ways to underpin confidence and minimize overconfidence biases.
- A Toolkit to help transcend bias, and good news on ambiguity-handling.
- The fragmented nature of compassion, and the why and how of humor.
2: SELF LEADERSHIP: The moral guiding light is in sight, but often lost in the clouds
Leaders place a high premium on ethics. How high they set the moral bar for business. How keenly they scrutinize the ethics of a result. How easily they can describe their own ethical (moral) codes. Their positioning on tensions between profit, planet and people. Still, the majority faced ethical blockages over the past 3 years. Overcoming these is perhaps not helped by the fact that only around half can easily describe their personal mission or strengths and weaknesses, or say that their values and principles help them navigate dilemmas.
- Many leaders are missing their personal True North: 45% can easily describe their personal mission. 73% can easily describe their values and ethical code, 65%, their principles (how they treat others). Only around half can easily describe their mission, strengths & weaknesses.
- Leaders place a high premium on ethics, but face barriers: 82% believe businesses should operate at the highest moral level, but 71% meet ethical blockages. 54% believe business should obey the letter and spirit of the law. 28% say businesses should aim higher. 99% check for ethical misconduct in judging a success. Yet 71% had to take a professional decision against their ethical principles in the last 3 years.
See the Full Amrop Report for more:
- A question catalog to kick off a Life Plan and Goals.
- Planet, profit or people? Discover leaders’ position on 5 dilemmas - and test yourself.
3: MOTIVATIONAL DRIVERS: Leaders are driven by service, virtue, and entrepreneurship – but not to self-sacrifice.
Presented with 6 leadership styles and 3 paradoxes which we relate to smart versus wise decision-making (and core leadership motivations), leaders tend towards indicators associated with our concept of wise leadership. They seem moved more by service than by sovereignty, more by virtue than by value, more by entrepreneurship than execution.
However, driving these tensions into the epicenter of leaders’ lives and presenting 5 hypothetical career moves designed to test their key motivators, Need For Power, (prestige, social eminence, and superiority), is strongest. Only a few leaders see as a promotion a position designed to appeal to purely ‘wise’ values and demanding a temporary personal sacrifice.
- Leaders are driven by ‘sustainable entrepreneurship’: 86% strive to fulfill the organization’s objectives, even when it’s not to their own benefit. 86% are moved more by service than by sovereignty (CORE INTERESTS). 60% are moved more by virtue than value (PURPOSE). 69% tend more towards an entrepreneurial, than an executive style (STRATEGIC PRIORITY-SETTING).
- Power is the strongest career motivator: 63% of leaders saw a job description answering the ‘Need for Power’ as a promotion. Of 5 hypothetical career moves testing key motivators, ‘Need for Power’ (prestige, status) emerged the most attractive, seen as a promotion by 63% of leaders. Only 10% are tempted by a position appealing to ‘wise’ values and demanding a temporary financial sacrifice.
See the Full Amrop Report for more:
- 3 paradoxes unpacked, with avenues for leaders to reconcile them
- 5 career moves, and their pull for leaders
4: HYGIENES: Many leaders are engaging in personal mindfulness practices – but feedback is often skipped.
Proactive feedback-seeking is vital for self-awareness and development, but far from widespread. (We recall that only around half of leaders can easily describe their strengths and weaknesses). ‘Mindfulness’ or ‘reflective’ practices are another hygiene. They help us gain awareness, insight and ‘flow’. In terms of specific activities, walking is the most widely practiced, with a highly positive effect on decision-making. However, its effectiveness is far surpassed by a far less common practice: meditation.
- Leaders are missing vital feedback: 58% actively seek feedback on their attitudes and behavior and take it into account. We recall that only 46% can easily describe their strengths and weaknesses. The importance of feedback cannot be over-emphasized.
- Meditation is the most powerful mindfulness practice: 95% of those engaged in it report a highly positive effect on decision-making. Of specific practices presented, walking is most widely practiced, (49%) and most often (62% several times per week/daily), with 74% reporting a highly positive effect on their decision-making. Only 18% of leaders meditate, but 95% report a highly positive effect,).
See the Full Amrop Report for more:
- A Feedback Toolkit with 5 common feedback traps.
- How do different mindfulness affect decision-making?
In Conclusion
The path to wise leadership is a never-ending process of self-reflection and learning. Our findings suggest that if most leaders are on the way, too many are submerged by daily business, cognitive overload and short-term imperatives. Too few are taking time for self-reflection, and miss the guiding frameworks that will enable them to step back and re-orient.
“Leaders are often very lonely when taking decisions,” one CEO told us. It is perhaps this isolation that is undermining wise decision-making – isolation not only from others, but from ourselves. The right stakeholders and engineering to transcend thinking traps are management essentials. Just as important are personal processes: feedback, coaching to identify true motivations, strengths, a Life Plan, and avenues for self-development. These are just some of the steps all leaders can take today – irrespective of age or seniority.
Where to start? Perhaps the journey begins in mindfulness, with one or two habitual and recognized reflective practices. These enable internal answers to emerge – also when it comes to which external support to seek, from whom, and why.
