Page 146 - HBR Leader's Handbook: Make an Impact, Inspire Your Organization, and Get to the Next Level

Focusing on Results 135

Making decisions when you don’t have all the data

While it’s critically important to have as much of the right data as possi-
ble to support your decision making, information will be lacking at times
or you won’t be able to get it on time, and you’ll have to make a decision
anyway. According to Ram Charan, a longtime adviser to senior execu-
tives and boards, more and more decisions will be made this way in the
future. As the pace of change continues to increase, qualitative factors
take greater precedence, and more and more variables come into play.
In the face of this ambiguity, leaders can’t always rely on analytics alone
for key decisions, whether it’s to enter a new market, acquire a company,
try a new marketing approach, offer a new service to internal clients, or
quickly respond to a customer problem.
When these situations arise, as they inevitably will, Charan suggests
a number of ways that you can forge ahead in his HBR article “You Can’t
Be a Wimp—Make the Tough Calls.” First, you need to sift through the
information that you do have and select the few most critical factors that
will truly matter in making the decision. Second, use your imagination to
shape a few options—that we could do A, B, or C—and play out their im-
plications. For example, if you tell customers that you will do A for them,
what would be the impact on your bottom line or on the use of other
resources? To what extent would it set a precedent? Would you have the
capacity to honor this promise? How might competitors respond? What
other second- or third-order effects might there be? Then, with these
options in mind, toss them around with your team or some trusted
colleagues, or even with an objective outsider. Encourage a spirited dis-
cussion of the risks and benefits. Make sure that you also look at the
different scenarios from a customer or stakeholder perspective. And use
whatever data you do have to help you clarify any of the choices.
(continued)