DECESION MAKING AND

PROBLEM SOLVING

Reference : Article published in ET IN 2023

While there are many qualities that go into creating an effective leader,
problem-solving and decision-making stand out as key components. An
organization, team, or project's success can be determined by a leader's
capacity to overcome obstacles and make wise decisions. We will
discuss the importance of these abilities in this post, as well as how
leaders can develop them to succeed in their positions.
Effective leadership is a delicate balance of numerous attributes, but
two essential skills stand out as fundamental pillars: problem-solving
and decision-making. A leader's ability to navigate challenges and make
informed choices can determine the success of an organization, team,
or project. In this article, we will explore why these skills are crucial and
how leaders can hone them to excel in their roles.

SYNOPSIS
Problem-solving is the art of finding solutions to complex or ambiguous issues. In a leadership
context, it often involves identifying obstacles, analyzing their root causes, and devising strategies to
overcome them. Here's why it's vital for leaders:

1. Adaptability: In today's fast-paced world, change is constant. Leaders who can effectively solve
problems are better equipped to adapt to new circumstances and keep their teams on track.

2. Innovation: Problem-solving encourages creative thinking. Leaders who foster innovation within
their teams can find unique solutions that give their organizations a competitive edge.

3. Conflict Resolution: Disagreements and conflicts are inevitable. Leaders skilled in problem-
solving can mediate disputes and maintain a harmonious working environment.

4. Efficiency: Effective problem-solving streamlines processes. Leaders can identify inefficiencies

and implement improvements, ultimately saving time and resources.

THE SIGNIFICANCE OF PROBLEM-

SOLVING
Decision-making is the process of selecting the best course of action from multiple
alternatives. Leaders often face decisions with high stakes and far-reaching
consequences. Here's why it's a critical skill:
1. Responsibility: Leaders bear the responsibility for the choices they make. A
well-considered decision can lead to success, while a poor one may have adverse
effects on the entire organization.
2. Risk Management: Decision-making involves assessing risks and rewards.
Leaders must balance these factors to make informed choices that minimize
potential harm.

3. Time Management: Procrastination can be detrimental. Leaders who make

decisions promptly keep projects moving and prevent paralysis by analysis.

4. Communication: Decisions need to be communicated clearly and effectively to

the team. Leaders who excel in this skill inspire confidence and understanding
among their followers.

THE ART OF DECISION-MAKING

Leaders can develop following steps and enhance the PS and DM skills:

1. Gather Information: Before making decisions or attempting to solve problems, leaders should
collect relevant data. Informed choices are more likely to yield positive outcomes.

2. Critical Thinking: Encourage critical thinking within the team. This fosters a culture of problem ..
3. Brainstorming: Invite diverse perspectives during problem-solving sessions. Different viewpoints
can lead to more comprehensive solutions.

4. Analyse Past Decisions: Reflect on past decisions and their outcomes. Learning from both
successes and failures can improve future decision-making.

5. Seek Mentorship: Experienced mentors can provide valuable insights and guidance. Learning
from others' experiences can accelerate skill dev ..

6. Practice Patience: Rushing decisions or solutions can lead to mistakes. Leaders should take the
time necessary to ensure they make the right choices.

7. Feedback and Evaluation: Encourage feedback from team members. Constructive criticism can
help leaders refine their problem-solving and decision-making approaches

DEVELOPING PROBLEM-SOLVING
AND DECISION-MAKING SKILLS
To illustrate the power of problem-solving and decision-making skills, consider the story of Jane, a
successful CEO. Jane faced a declining market share and internal conflicts within her organization.
She embraced problem-solving by conducting a thorough analysis of market trends, identifying
the causes of internal disputes, and devising strategies to address both issues.

Jane's decision-making prowess was equally impressive. She carefully evaluated various options
to reposition the company in the market and resolved internal conflicts through transparent
communication and compromise. Thanks to her adept problem-solving and decision-making, the
company not only regained its market share but also became a more cohesive and innovative
organization.
Problem-solving and decision-making are indispensable skills for leaders. They enable
adaptability, innovation, and efficiency while reducing risks and conflicts. Leaders who actively
cultivate these skills can guide their teams and organizations to success even in the face of
formidable challenges. Whether you are an emerging leader or a seasoned executive, dedicating
time to hone these skills will undoubtedly enhance your leadership capabilities and contribute to
the prosperity of your endeavoures.

A CASE STUDY
Q: Why are problem-solving and decision-making skills important for
leaders?
A: Problem-solving and decision-making are essential skills for leaders because
they enable them to navigate complex challenges, make effective choices, and
guide their teams toward success. These skills help leaders address issues, seize
opportunities, and achieve their organizational goals.

Q: What is the difference between problem-solving and decision-making?

A: Problem-solving is the process of identifying, analyzing, and finding solutions
to problems or challenges. Decision-making, on the other hand, involves choosing
between different options or courses of action to address a specific issue or
opportunity. Problem-solving is a component of decision-making, as leaders often
need to solve problems in order to make informed decisions.

TENTATIVE THOUGHTS AND

ANSWERS
Q: What are some common barriers to effective problem-solving
and decision-making?
A: Common barriers include cognitive biases, lack of information, time
constraints, emotional factors, groupthink, and resistance to change. These
barriers can impede a leader's ability to make rational and effective
decisions.

Q: How can leaders improve their problem-solving skills?

A: Leaders can enhance their problem-solving skills by practising critical
thinking, gathering relevant data, considering multiple perspectives,
brainstorming solutions, and seeking input from others. They can also learn
from past experiences and continually refine their problem-solving
techniques.

TENTATIVE THOUGHTS AND

ANSWERS
There are five main decision-making models designed to help leaders analyze
relevant information and make optimal decisions.
Once again, each of these models takes a unique approach to decision-making,
so it is important to choose the model that will work best for you and your unique
situation. With that said, let's take an in-depth look at each model and the
situations where each one is most applicable.

THE 5 MAIN DECISION-MAKING MODELS

l
The rational decision-making model involves identifying the criteria that will have the biggest impact on your decision's outcome and then
evaluating possible alternatives against those criteria. The steps of the rational decision-making model are:
Step #1) Define the problem: You'll want to start by identifying the issue you are trying to solve or the goal you are trying to
achieve with your decision.
Step #2) Define criteria: The next step is to define the criteria you are looking for in your decision. For instance, if you are
deciding on a new car, you might be looking for criteria such as space, fuel efficiency, and safety.
Step #3) Weight your criteria: If all of the criteria you define are equally important to you, then you can skip this step. If some
factors are more important, you will want to assign a numerical value to your criteria based on how important each factor is.
Step #4) Generate alternatives: Having defined and weighted the criteria you are looking for, it's time to brainstorm ideas and
develop a few alternatives that meet your criteria.
Step #5) Evaluate your alternatives: For each possible solution you come up with, you should evaluate it against your criteria,
giving extra consideration to the criteria you weighted more heavily.
Step #6) Choose the best alternative: After evaluating all possible alternatives, select the option that best matches your
weighted criteria.
Step #7) Implement the decision: The next to last step in the rational decision-making model is simply putting your decision
into practice.
Step #8) Evaluate your results: It's essential to evaluate your results anytime you make a decision. Looking at your decision
from a retrospective point of view can help you decide if you should use the same decision-making process in the future.
When to use this model
The rational decision-making model is best employed when you have numerous options to consider and plenty of time to evaluate them.
One example of a scenario where this model might prove useful is choosing a new hire from a pool of candidates.

1) RATIONAL DECISION-MAKING
MODE
Sometimes, taking action quickly and choosing a "good enough" option is better than getting
bogged down in searching for the best possible solution. The bounded rationality decision-
making model dictates that you should limit your options to a manageable set and then
choose the first option that meets your criteria rather than conducting an exhaustive
analysis of each one. Going with the first option that meets your minimum threshold of
requirements is a process known as "satisficing." While this may not be the best process for
every decision, a willingness to satisfice can prove valuable when time constraints limit you.
When to use this model
The bounded rationality decision-making model is best employed when time is of the
essence. It's the best model to use when inaction is more costly than not making the best
decision. For example, suppose your company has encountered an issue causing extended
downtime. In that case, you may want to use the bounded rationality decision-making model
to quickly identify the first acceptable solution since every minute wasted is costly.

2) BOUNDED RATIONALITY DECISION-

MAKING MODEL
The Vroom-Yetton decision-making model presents seven "yes or no" questions
for a decision-maker to answer followed by five decision-making styles for them to
choose from. It's the most complex decision-making model on our list, requiring
decision-makers to utilize a decision tree to arrive at the right decision-making
style based on their answers to the model's questions.
When to use this model
The Vroom-Yetton decision-making model was specifically designed for
collaborative decision-making and is best employed when you involve multiple
team members in the decision-making process. In fact, one of the main objectives
of this model is to determine how much weight should be given to the input from a
leader's subordinates.

3) VROOM-YETTON DECISION-MAKING
MODEL
Have you ever heard that it's often best to go with your gut? While making decisions
based only on instinct may not seem like the best idea to those who prefer a more careful
and logical approach, there are plenty of instances where going with your gut is the best
way forward.
For example, if you don't have much information to consider, instinct may be the only tool
for finding the best solution that you have available. Likewise, trusting your instinct can
often yield the best results in cases where you are already deeply experienced with the
matter at hand since nothing hones instinct better than experience.
When to use this model
The intuitive decision-making model probably shouldn't be the first model you turn to
when you need to make a decision, but there are instances where it can be useful. We've
mentioned a couple already, including cases where there isn't enough information for you
to make a more informed decision and instances where your own experience is more
reliable than the available information. The intuitive decision-making model can also be
useful in cases where you don't have a lot of time and need to make a decision quickly.

4) INTUITIVE DECISION-MAKING MODEL

The recognition primed model is similar to the intuitive decision-making model in that it relies heavily on
the decision-maker's experience and instinct. However, the recognition primed model is a little more
structured than intuitive decision-making and includes the following steps:
Step #1) Analyze available information to identify possible solutions: The first step
in the recognition primed model is to brainstorm possible solutions based on your available
information.
Step #2) Run scenarios through your head: For each possible solution, run the scenario
through your head and see how it plays out.
Step #3) Make a decision: The recognition primed model dictates that the solution that leads to
the best possible outcome when you visualize it in your mind is the solution that you should choose.
When to use this model
Like the intuitive decision-making model, the recognition primed model works best in instances where:
You don't have a lot of information available.
You trust your instinct and experience.
Time constraints are a factor.
With that said, using this model effectively does require a certain degree of creativity and imagination
since you will have to visualize the outcome of each possible solution.

5) THE RECOGNITION PRIMED MODEL

Understanding the different biases
Preventing biases from getting in the way of your decision-making skills starts with identifying the types of biases you need to be aware of,
including:
Confirmation bias: Confirmation bias entails favoring or focusing on information that confirms your pre-existing beliefs and ignoring
information that runs counter to those beliefs. While it's important to trust your own experience and beliefs, you don't want to subconsciously
favor information just because it aligns with what you already believe to be true.
Availability bias: Information that is easily accessible in your memory often gets undue weight, and this is known as availability bias.
One example of availability bias is overestimating the likelihood of an event just because you can remember a similar event happening to
you in the past.
Survivorship bias: Survivorship bias entails focusing only on the solutions that have generated success in the past. While it's important
to consider past results, ignoring possible solutions just because they are unproven will place unnecessary constraints on your decision-
making process.
Anchoring bias: Anchoring bias is the tendency to "anchor" yourself to the first piece of information you learn. Information should not get
extra weight just because you have known about it for longer, and new information can be equally important to consider.
Halo effect: The halo effect occurs when positive experiences with or impressions of one aspect of a possible solution cause you to view
the entire solution positively. Rather than being blinded by the positives, seek out and consider the negatives as well.

Decision-making biases