Business Case Studies, Executive Interviews, Colin Carnall on Decision Making

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Executive Interviews: Interview with Colin Carnall on Decision Making
May 2008 - By Dr. Nagendra V Chowdary

Colin Carnall
Director of Executive Programs at Warwick Business School, The University of Warwick, Coventry, UK

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    To fully understand the senior leadership development, we need to deal with both behavior and knowledge. It is not the knowledge of academic disciplines but rather a process of working and helping leaders develop more effective choices. Appropriate patterns of behavior are important. But how senior leaders come to formulate plans and goals, the information they use and the thinking underpinning their decisions becomes a relevant target of the leadership development activity. A recent survey of the leadership throws up an interesting and balanced set of findings on leadership effectiveness which are set in the context of this argument. The findings are summarized as follows:

  1. Leaders think that the ability to deliver 'the numbers' is the most respected leadership quality.
  2. Roughly one-third of the internally sourced and promoted leaders fail, usually because of their poor people skills or interpersonal qualities.
  3. Thirty percent of the leaders fail to demonstrate the key qualities necessary for effective leadership
  4. Twenty-five percent of the organizational plans and strategies fail because of improper execution
  5. 'Strong' leadership can enhance the successful execution of plans by 20% or more.

    The first result is not a surprise but, in the order of importance, the leaders surveyed and found: 'Deliver the numbers', the ability to take 'tough decisions' and the ability to create a strategy for success ranked as the top three with interpersonal skills ranked fourth. Moreover, looking at the third finding, it is interesting to note that many of these 'key qualities' relate more to the ability to cope with ambiguity than with the impact upon people, ability to learn, handle feedback, cope with complexity and think broadly using multiple perspectives very much in evidence. Finally, turning to the 'execution of business plans', the issues identified in the survey are almost entirely focused on the analytical and the performance agenda… i.e., Churchill's 'Pester, Nag and Bite'. If there is an interest in dealing with people, here it looks at how to call people to account.

  • Events in business never proceed exactly as planned. Such intangibles as friction, uncertainty, fluidity and disorder complicate the decision making. What is the cost of poor decisions? How to avoid strategic errors in decisions?
    In war this is known as 'friction'. Remaining adaptable is the key.

  • Brutal competition, ethical strife, unanticipated changes in the market place, technological shifts, and a lingering recession, etc., can leave a company battle worn out. Accordingly, many have advocated a combat philosophy, also known as maneuver warfare as it emphasizes action in the midst of uncertainty. What lessons, if any, should corporate leaders pick up from warfare as regards business decisions? For instance, the use of speed, surprise and concentrated force against an opponent's weakness to achieve maximum impact with a minimum resource commitment in the presence of strategic uncertainty and hostile intent, etc., are some of the critical elements in maneuver warfare. Should business decision makers adopt these elements?
    Certainly, when competition is fierce. But not to the extent that it leads to other errors. For example, 'in a competitive situation' and 'mature markets', a common error is to withdraw too early.

  • Decentralized decision making is described as the delegation of significant decision-making authority down through the ranks. The aim is to give those closest to the action the latitude to take advantage of the onthe- spot information unavailable to their superiors. What according to you is the difference between decentralized decision making and delegation of authority? When does decentralized decision making make sense?
    They are the same in practice because you cannot disassociate yourself from the consequences of decisions by noting that you have delegated authority. As a leader you remain accountable.

  • How important are the counselors, advisors and mentors in making strategic decisions?
    Senior leaders make growing use of such people. Senior roles are lonely!

  • Jim Collins, in an article in Fortune (June 27, 2005) distinguished between bad decisions and wrong decisions. What according to you is the distinction between bad decisions and wrong decisions? What are the 10 most-important-ever corporate decisions made, according to you?
    Bad decisions are those made through a process judged to be illegitimate and therefore less likely to be effective. Wrong decisions are just wrong in the circumstances and are more easily remedied.

    Not sure whether I can give a meaningful response to last part of this question.

  • Any examples of really bad decisions? What lessons do you think these bad decisions offer?
    Look at the books written about failure e.g.., The Challenger Disaster.

1. Decision Making Case Study
2. ICMR Case Collection
3. Case Study Volumes

The Interview was conducted by Dr. Nagendra V Chowdary, Consulting Editor, Effective Executive and Dean, IBSCDC, Hyderabad.

This Interview was originally published in Effective Executive, IUP, May 2008.

Copyright © May 2008, IBSCDC No part of this publication may be copied, reproduced or distributed, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or medium electronic, mechanical, photocopying, recording, or otherwise without the permission of IBSCDC.

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