Jim Schleckser is the Founder and CEO of The CEO Project, a firm that builds advanced advisory groups for CEOs of high-growth companies.
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Many great CEOs talk about how important making decisions is as part of their job. For many leaders, the perception is that making decisions is what they get paid to do. This makes sense, given that most CEOs have earned their position based on their smarts, wisdom and experience. Who else would you want to make the kinds of key decisions that could change the future trajectory of the business?
The catch here is that this can become almost an addiction where the more decisions you make, the more value you think you’re adding. And this is a mistake.
Jeff Bezos, the founder of Amazon, has famously said that he strives to make just three good daily decisions. Three. That’s it.
But I’ll even up the ante further: Only four of your CEO decisions per year may ultimately matter.
Let me explain.
Quality Over Quantity
The first decision you must make as a leader is deciding which decisions are worthy of your time. The decision to decide is your first move, and being aggressive about letting others decide when they are able can be a winning strategy. You should only focus your time on the limited few items that might make a big difference.
Think about it: If you want to follow the Bezos model of making three good daily decisions, you must be rigid in your filter of what matters most.
So how do you do that?
Some issues are obvious. Making a strategic decision about an acquisition or adding a new member to your executive team is well worth your time. Those are high-leverage decisions with long-lasting impact; you must make those calls. At the same time, choosing what color the napkins should be at the company’s BBQ is not something you should be worrying about. That’s a no-brainer to delegate.
The trickier issues are somewhere in between. When choosing whether or not to get involved in non-obvious decisions, I like to use the metaphor of whether the risk involved is above or below the waterline. If the issue is critical enough that the wrong choice could sink the ship, then that issue deserves your time and attention.
If it’s an above-the-waterline issue, that becomes a great opportunity to delegate to someone else—and maybe even use it as a development opportunity for someone on your succession plan.
Another filter to use is whether the decision is reversible or not. If the decision will result in something irrevocable, that might deserve your attention—especially when it’s below the waterline.
But even a critical decision that’s reversible—meaning you can undo it later at some cost—could be an opportunity to delegate and develop.
Think of it like a grid, with risk and reversibility on each axis. The higher the risk and the less reversible an issue is, the more likely it becomes that it’s a decision that only you, as the leader, can make.
The Four Decisions That Count
I recently spoke to a client who helped put the decision-making question in an even grander context. He told me, “Jim, out of all the decisions I make during the year, I realize that only four will be important. The problem is that I only understand which ones they are after I've made them.”
This is such a good point. He was saying that even when he limited himself to making three decisions a day—which adds up to something around 1,000 for a year—for him, only four of those decisions really mattered in his business. And it was only later that he realized which ones they were.
The notion is for a CEO not to get bogged down with all the decisions. Limit what you have to make decisions about and realize that probably only a few really matter to the business. Each CEO will only realize which decisions mattered after they reflect on the year as a whole.
The key lesson for us leaders, then, is that we truly must be disciplined when deciding which issues we invest our energies in, because it’s not always clear which ones will have the most impact. That’s why you can’t let yourself become inundated with the hundreds of other inconsequential decisions that might come across your desk. It is a better move to limit the decisions to the ones that might matter and invest time in determining the best available answer.
You must do everything you can to ensure that the decisions you make are linked to the critical issues that will shape the future of your business.
Ultimately, deciding is the skill you’re getting paid to use.
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