Should you abandon or commit to a struggling strategic activity? Should you invest in the latest technology or not? These are just two examples of complex decisions that are about more than technical expertise. In gray-area situations, problems cannot be fixed by applying turnkey solutions, analyzing all the available data or consulting specialists. Managers are left with a puzzle: it seems that there is no ideal solution. This managerial paradox can be a source of confusion and bewilderment, and can result in paralysis or lead to hasty, ill-considered decisions. Badaracco proposes untangling these Gordian knots using a five-step framework by which you question yourself about the consequences of your decisions; your obligations; the feasibility of the solution; and your core values. The final stage consists of summarizing your findings to come up with a pragmatic, ethical solution that is acceptable not just to your but to everybody else as well.
Analysis: conduct a detailed assessment of the implications of your decisions
In a complex or even paradoxical situation, start with a rational, financial approach to decision-making. How can you fully consider the available options and analyze their consequences? How can you put yourself in position to evaluate every alternative from a cost-risk-benefit angle? You might think that this is the ABC of management but many top-notch leaders skip this essential step, as illustrated by the recent Volkswagen scandal. The German car giant employed a string of fraudulent techniques between 2009 and 2012 to reduce emissions from some of its engines during testing, a scam that ultimately cost the company $20 billion. Badaracco insists that it is possible to guard against blind spots if you are willing to distrust your initial gut instinct, devise a decision tree to list existing alternatives, and — most important of all — if you do not embark on the process in isolation. You need devil’s advocates equipped with sharp, critical minds who can act as counterweights and safeguards. Surrounding yourself with such individuals is the best way not to miss any unwelcome repercussions!
Empathy: measure your obligations to all stakeholders
Even the most elaborate decision tree is not enough in itself to untangle gray scenarios, however. Such situations often have ethical dimensions that elude economic analysis. Even if a company’s goal is profitability, it is impossible to manage in terms of return on investment alone. Before taking any decision, you should consider the obligations that tie you to all your stakeholders: employees, customers, shareholders, suppliers, regulatory authorities, local communities, and so on. Even stakeholders who are less established than others and may have a low profile should be identified and included.