Q: Based on your considerable business experience, what do you think is the secret of good decision making?
A: It’s wise to keep clear of politics and stick to common sense.
Don’t make decisions at a meeting. Boards are there for debate, formal approval and to communicate critical conclusions. Good decisions are seldom made by a show of hands.
Coming to the right conclusion is an art, not a science, so don’t be fooled by a “decision deck” or PowerPoint presentation produced to prove a politically preferred answer. Decision making can be hampered by governance and procedure. I recently heard of a university that required 35 signatures to sign off a £250,000 project, by which time the price had increased by 10pc.
Many decisions are made by the wrong people. Too many executives at “head office” create policies and processes that tell frontline colleagues what to do. These people don’t know as much as staff on the shop floor. The best decisions are usually made by those who actually do the job.
Executives do more damage when they undermine the authority of junior managers. I’m fully in favour of top management meeting their most junior colleagues, but they mustn’t be tempted to interfere without getting approval.
Head office doesn’t run the day to day business. Top managers make strategic decisions, then support others throughout the organisation to make their own decisions, so they can turn strategy into reality.
Making strategic decisions is a lonely job, but no one should be doing it on their own. Talk to as many people whose opinion you respect as you can. Fill your mind with everything you need to consider. Why do things need to change? What are you aiming to achieve? How will the team react? Will your customers get a better deal? Lots of questions need to be answered by one big decision.
It helps to make a list, but keep it simple. To be more accurate, two lists are needed – one headed “for” the other “against”. There’s no need to think too hard; follow your instinct and put every key factor under one of the headings. You will quickly see whether you have an easy decision.
What else? Take the easy decisions straight away – just get on with it. The decision that most managers sleep on (for far too long) is whenever it’s clear that a colleague should be asked to leave. The boss always sleeps better when the deed has been done.
Honest entrepreneurs admit that the best decisions and big breaks are prompted by a piece of luck or a lightbulb moment, but they shouldn’t be embarrassed. True entrepreneurial skill is shown by having the experience to recognise a great idea when it’s staring you in the face.
The more you know about the business, the easier decisions become. But you won’t get much help from focus groups, a “deep dive”, a dashboard or consultants who commission market research. You need to live the business, meet as many colleagues as possible, study the company history and make it your number one hobby.
Your question made me think of our own major decisions. During 45 years in the boardroom, I have a pretty poor strike rate for mega decisions, but big forks in the road don’t come along very often. Usually, you only recognise the crucial calls in retrospect. The big ones only show their significance as events unfurl.
Thinking back, I reckon we have made no more than 10 vital decisions over the past 53 years. The first was to introduce key cutting to our shoe repair shops in 1969. This tentative toe into diversification has created the biggest part of today’s business.
My reluctant decision to sell our retail shoe shops in 1987 turned out to be a master stroke. Shoe shops were about to all but disappear from the high street, and while other shoe chains suffered, we were free to concentrate on developing our service business.
Buying a 110-shop competitor, Automagic, in 1995, turned us into a truly profitable business and taught us how to grow by acquiring poor performing competitors.
Our progress since then owes much to the decision to put frontline colleagues in control by introducing our “upside down management” approach.
For the past 20 years, the business has been led by my son, James, whose biggest decisions have been our diversification into photo retailing and the move into supermarkets.
My own best decision? That’s simple: it was marrying my late wife, Alex, who guided our company’s culture, taught me how to break the rules and firmly forced me to halt plans to float our business in 1991. It was a decision dominated by instinct.
Sir John Timpson is chairman of the high-street services provider, Timpson.
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