Why do leaders make bad decisions? How to make good decisions?

Making decisions is a critical part of any leadership role, and as a manager, your choices can significantly impact your team and your career. However, with so many factors to consider and much pressure to get things right, it can take time to make mistakes. This blog will explore why managers sometimes make bad decisions and provide practical tips for making better choices. From considering all your options and aligning with your long-term goals to eliminating stress and trusting your intuition, we’ll give you the tools you need to make informed and effective decisions. So if you want to become a more confident and capable manager, read on!

Impact of bad decisions taken by the manager

Bad decisions taken by a manager can have significant impacts on a team:

• Decreased productivity: Poor decision-making can lead to inefficient allocation of resources, leading to reduced efficiency and productivity.
• Decreased morale: If employees perceive that their manager’s decisions are unfair or incorrect, it can decrease confidence and job satisfaction.
• Increased turnover: Employees may leave the organization if they are dissatisfied with their manager’s decisions or leadership style.
• Financial losses: Incorrect decisions regarding finances or investments can result in monetary losses for the organization.
• Damaged reputation: If a manager’s bad decisions are made public, it can damage the team’s reputation and hurt its prospects.
• Lost opportunities: Poor decision-making can result in missed opportunities for growth and expansion.
• Decreased innovation: If a manager is unwilling to take risks and make bold decisions, the organization may miss out on opportunities for growth and innovation.
• Decreased customer satisfaction: If a manager’s decisions negatively impact the customer experience, it can lead to reduced customer satisfaction and loyalty.

Why do managers make bad decisions? 

• Inexperience in leadership: Lack of experience can result in a manager making poor decisions. This could be due to a lack of exposure to different situations or training in decision-making.
• Personal life pressures: Personal life problems such as financial difficulties, family issues, or health problems can significantly impact a manager’s decision-making abilities and lead to poor decisions.
• Time pressure: Managers may feel pressure to make a decision quickly, resulting in insufficient time for careful consideration of all options. This can lead to hasty or poorly thought-out decisions.
• Stress and overwork: High levels of stress and overwork can lead to burnout, impairing a manager’s ability to make effective decisions.
• Senior leadership pressure: Managers may feel pressure from senior leadership to make decisions that align with the organization’s overall strategy, even if those decisions may not be in the best interest of their department or team.
• Pressure from individual team members: Managers may also feel pressure from individual team members, who may have vested interests and agendas.
• No clear personal values: Without a clear set of personal values and beliefs, managers may struggle to make decisions that align with their ethics and principles.
• No solid decision-making process: A manager’s lack of systematic and structured decision-making can result in poor decision-making.
• Ego and power: Ego and a desire for power can sometimes cloud a manager’s judgment and lead them to make poor decisions.
• Lack of balance between emotion and logic: Poor decision-making can occur if a manager relies too heavily on emotions rather than logical thinking and analysis. This can result in decisions that are not well thought-out or not in the organization’s best interest.

These are signs that as a manager you may be about to make a bad decision

• If you make decisions too quickly: If you are not taking the time to carefully consider all options and weigh the potential consequences, it may indicate a hasty decision that could have negative consequences.
• If you don’t take others’ opinions into inconsideration: If you are not seeking input from others or not considering it while making a decision, you may be missing out on essential perspectives that could help you make a more informed decision.
• If you have limited information: If you do not have access to all the relevant information, your decision may not be based on a complete understanding of the situation.
• If you’re too emotional: If your emotions cloud your judgment, you may be unable to make a rational and objective decision.
• If you only follow your gut: While intuition can be valuable, relying solely on gut feelings without considering other factors can lead to poor decisions.

In general, it’s important to approach decision-making objectively, seeking input from others and considering all relevant information to minimize the risk of making a bad decision.

Examples of bad decisions at work

• Hiring the wrong person for a job
• Making impulsive decisions without considering the consequences
• Ignoring important data or feedback from employees
• Refusing to delegate tasks or responsibilities
• Failing to adapt to change or new technology
• Cutting corners or taking shortcuts to meet deadlines
• Prioritizing short-term gains over long-term success
• Micromanaging employees or not giving them enough autonomy
• Focusing too much on profit over employee satisfaction
• Not correctly communicating with employees
• Ignoring workplace values or ethical considerations
• Failing to provide adequate training or resources to employees
• Making decisions based on personal biases or prejudices
• Refusing to listen to diverse perspectives or opinions
• Making unilateral decisions without consulting with others or seeking input.

Steps to make good decision as a manager

• Weigh all the options: Take the time to consider all relevant options and weigh their potential outcomes. Don’t decide too quickly, but take the time to think things through.
• Make sure the decision aligns with the teams’ long-term goals: Ensure that the decision you make aligns with your overall organizational goals and strategies.
• Eliminate stress: Try to manage stress and reduce its impact on decision-making. A calm and relaxed mind can make informed and thoughtful decisions.
• Ask the difficult questions: Be bold and ask tough questions and seek input from others. This can help you identify potential problems or challenges before deciding.
• Give importance to the data: Use data and analytics to make your decisions whenever possible. This can help you to make more informed and objective decisions.
• Trust your intuition: While data and analysis are important, it’s also important to trust your intuition and instincts. This can help you make decisions that align with your personal values and goals.

Framework for managers to make better decisions

These are a set of questions the manager should ask themselves next time before making a decision, and they should only move ahead with the decision when they have a clear answer for each question.

• What is the problem?
• Why am I making this decision?
• What is my decision?
• What other choices do I have?
• What will be the results of my decision? Short-term and long-term?
• How will my decision impact other team members?
• Who will be in support of this decision?
• Who will help me in the execution of my decision?
• Do I have the resources to implement my decision?
• How can I minimize potential harms associated with the decision?
• What if my plan fails? Do I have a different option?

Conclusion

In conclusion, making good decisions is essential to successful leadership and requires careful consideration, data-driven analysis, and a focus on organizational goals and values. You can become a more confident and influential leader by understanding the common reasons why managers make bad decisions and taking steps to mitigate these risks. Whether you are looking to improve your decision-making skills or avoid common pitfalls, this blog has provided valuable insights and practical tips to help you achieve your goals. So take these lessons, and start making the decisions to help you and your team succeed.