Wise Decision-Making: Stepping Up to Sustainable Performance

An ambiguous, complex business environment. An inter-connected world. A society switched-on 24/7 to corporate errors. The life of a leader has never been tougher. And despite the best efforts of many, trust remains fragile. Leadership today is filled with difficult social, environmental and ethical dilemmas.

Based on the input of 363 business leaders, this global Amrop study gauges the current health of leadership decision-making, to support the journey from smart to wise.

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 business dilemmas in a holistic way. Not only do they create and capture economic value, they build more sustainable and legitimate organizations.

Focusing on factors over which leaders can exercise some control, our model includes a clear framework with practical tools, and addresses:

Self Leadership: how leaders exercise self-governance
Motivational Drivers: what drives leaders’ choices
Hygienes: how leaders nourish their decision-making ‘health.’

Topline Findings

1Self Leadership I: 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 - and so is humor as a way to diffuse tension and pride).

Leaders are missing their rear-view mirror: only 10% consciously reflect on their experience.
Few leaders master reflection in action: only 12% always think about thinking.
Many leaders are speeding without a safety belt: 40% display high self-confidence (which may cause some biases).
Leaders are under-using a powerful toolkit to transcend bias: 33% will always stop or adapt a decision facing counter-evidence.
Leaders are failing to systematically involve the right people in decisions: 52% generally or always use stakeholders as allies to validate their opinions.

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.

2Self Leadership II: 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.
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.

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.

3Motivational 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, 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' 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.
Power is the strongest career motivator: 63% of leaders saw a job description answering the ‘Need for Power’ as a promotion.

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

4Hygienes: 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. ‘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.
Meditation is the most powerful mindfulness practice: 95% of those engaged in it report a highly positive effect on decision-making.

See the Full Amrop Report for more:

A Feedback Toolkit with 5 common feedback traps.
How do different mindfulness practices 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.

Downloads

Just the essentials - read the Executive Summary highlighting our key findings and takeaways.

Executive Summary

Our Full Report includes a question catalog and a Feedback Toolkit with 5 common feedback traps.

Full Report