Decision making in uncertain times

 

Here is an excerpt from an article written by Andrea Alexander , Aaron De Smet, and Leigh Weiss  X for the McKinsey Quarterly, published by McKinsey & Company. To read the complete article, check out others, learn more about the firm, and sign up for email alerts, please click here.

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The timeline for companies to react to the coronavirus has shrunk dramatically. Here are five principles that leaders can follow to make smart decisions quickly during the pandemic.
Leaders know that making good, fast decisions is challenging under the best of circumstances. But the trickiest are those we call “big bets”—unfamiliar, high-stakes decisions. When you have a crisis of uncertainty such as the COVID-19 pandemic, which arrived at overwhelming speed and enormous scale, organizations face a potentially paralyzing volume of these big-bet decisions.
The typical approach of many companies, big and small, will be far too slow to keep up in such turbulence. Postponing decisions to wait for more information might make sense during business as usual. But when the environment is uncertain—and defined by urgency and imperfect information—waiting to decide is a decision in itself. For instance, delaying the decision to cancel noncritical surgeries can mean not freeing up physician and hospital capacity now and potentially exposing or infecting more people.To make bold decisions quickly in these uncertain times, leaders can follow these five principles.{Here’s the first.]

1. Take a breath

Pause and take a breath—literally. Giving yourself a moment to step back, take stock, anticipate, and prioritize may seem counterintuitive, but it’s essential now.

When asked what makes a great hockey player, Wayne Gretzky is said to have answered, “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” That is easier said than done. In a crisis atmosphere, it is tempting to jump from one urgent task to the next, to take charge of what’s right in front of you—to just execute. Yet this can be a tragic mistake. Research shows that the simple act of pausing, even for as little as 50 to 100 milliseconds, allows the brain to focus on the most relevant information. 1

A dramatic example of a leader who paused during a landscape-scale crisis is Captain Chesley Sullenberger. After a bird strike caused both of his plane’s engines to fail shortly after takeoff from LaGuardia Airport in January 2009, he had very little time to decide whether to try to land at a nearby airport, as the control tower was urging, or to aim for a water landing. With no training for such a scenario, he stopped and reflected for a matter of seconds—all that he could afford—to determine if he could get to the airport safely and instead pivoted to the Hudson River for landing. 2 All 155 people on board survived.

There are several ways decision makers can take a breath:

  • After telling your team you need a moment to think, try to gain a broader perspective.
  • Imagine yourself above the fray, observing the landscape from above. This is what leadership expert Ronald Heifetz calls a “balcony” perspective. Despite the “fog of war” that might obscure much of the current state of play, do your best to take a broader view.
  • Ask yourself and your team these questions: What is most important right now? What might we be missing? How might things unfold from here, and what could we influence now that could pay off later?

This ability to anticipate how things might unfold—and to begin to act accordingly—can help avoid knee-jerk reactions that lead to poor outcomes.

Ask yourself and your team these questions: What is most important right now? What might we be missing? How might things unfold from here, and what could we influence now that could pay off later?

In the coronavirus context, if you are a leader of a grocery-store chain, you are seeing a drastic increase in purchases. You must think about your supply chains, whether to ration items, and how to put safety protocols in place for customers. In addition, there are the questions of whether to modify store hours, whether to limit service to curbside pickup and delivery only, and how to handle staffing. All of these decisions are related, so you must pause and prioritize the most pressing issues first. That also means having the discipline to ignore distractions.

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Here is a direct link to the complete article.

Andrea Alexander is an associate partner in McKinsey’s Houston office, where Aaron De Smet is a senior partner; Leigh Weiss is a senior expert in the Boston office.

The authors wish to thank Chris Gagnon, David Mendelsohn, and Vanessa Monasterio for their contributions to this article.

And I wish to highly recommend these two books: Doris Kearns Goodwin’s Leadership in Turbulent Times and Nancy Koehn’s Forged in Crisis: The Power of Courageous Leadership in Turbulent Times.

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