How To Make Better Decisions As A Leader: Which Tools & Theories Can Help?

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As a leader, your team will look to you for guidance on what to do in various situations. This means it can sometimes be up to you to figure out what’s in the best interests of your team and/or organisation. So, no pressure.

Luckily, there are tools which can help you make good decisions. We’ll take a look at these tools and how to use them later. First, let’s get a better understanding of what decision-making is and why it’s important to make good choices.

Key Points:

  • Decision-making means committing to a course of action. It’s the process you use to determine an outcome, which is based on your preferences, values and beliefs.
  • When it comes to the workplace, your decisions will usually take into account the organisation’s principles and goals, which might not always neatly align with your own.
  • Good decision-making involves key leadership skills, including being decisive, organised, empathetic and adaptable.

What are the different types of decision-making?

There are many different types of decision-making, but here are 7 common examples:

  • Tactical: a more detailed breakdown of how to implement a wider strategy. Example – choosing how to spend your allocated budget
  • Organisational: choices that impact the organisation as a whole. Example – figuring out the structure of departments and teams
  • Policy: decisions that affect the values and aims of the organisation. Example – picking a suitable approval procedure for
    department budgets
  • Operational: everyday choices that have a short-term impact. Example – assigning tasks to team members
  • Personal: actions which impact people directly. Example – deciding which candidate to hire for a new role
  • Financial: choices that affect how money is spent, earned and economised. Example – allocating a cost to a specific product
  • Crisis-management: working out the best resolution for difficult or unexpected circumstances. Example – how to handle a cyber attack

Most decisions will likely fit into more than one category, so don’t worry too much about trying to squeeze them into a specific box. It’s more important to focus on how you can make good decisions, and the impact this can have on your team.

What are the benefits of making good decisions?

#1. Saves time and money

Some of the main benefits of good decision-making skills include saving time and money by using resources more efficiently. If you’re able to determine the best course of action quickly, you don’t waste time focussing on the wrong process or spending money on insufficient strategies.


Making a good decision about which training course to implement could save the company from forking out on one that’s too basic or offers low value for money.

#2. Avoids conflict

If you’re able to find a fair and logical solution with clear decision-making, there’s less room for resentment and frustration to grow. It will help your team focus on their roles and achieving the end goal, rather than who’s right or wrong.


Imagine one colleague believes you should be making an advert that focuses on the cost-saving benefits, while the other thinks it should be about the product’s features. As their leader, they look to you for the final decision.

Picking one idea over the other could cause a rift within the team. Sometimes this is the only way forward, and it can work out well as long as you can justify your choice.

💡The solution:

You suggest an advert that incorporates the two ideas – focussing on value for money. This reunites the team because a person they respect and trust (you) has made a strong, reasonable decision, which leads the focus back to your common goal – to make a memorable and profitable advert.

#3 Boosts team performance and wellbeing

Good decisions can boost your team’s confidence, morale and productivity. This also helps build strong relationships with your team and develops their trust in you.

A sure, sensible leader will be looked up to and respected, so you’ll generally have an easier time managing expectations, objectives and relationships in the workplace.

What is the potential impact of making bad decisions?

#1. Team failure

Bad decisions can make it more difficult for teams to achieve their goals. Nobody wants to struggle through the workday, so this could lead to self-doubt and lowered morale as your team isn’t getting the satisfaction they need from their work.

#2. Poor morale

Having to change a decision late in the process can also affect your team’s performance and motivation. They’ve worked hard on something that’s no longer needed and now have to work twice as hard to make up for the lost time and budget.

⏰Key Point: It’s important to remember that not every decision you make will be the right one. And that’s okay. Organisations with a healthy culture that value emotional intelligence will make themselves a safe place to fail.

As long as you own up to and learn from your mistakes, then they’re just learning experiences – workplaces also value leaders who can turn negatives into positives, so use bad decisions as a way to develop yours and your team’s skills.

How can leaders improve their decision-making?

Making good decisions isn’t something that comes naturally to all. But it’s a highly valued skill, especially for leadership roles as it’s a sign of well-developed soft skills, including problem solving, confidence, empathy, interpersonal skills, and various others.

Whether it comes naturally to you or not, you can train yourself to make good decisions.

The easiest way is by using decision making techniques to help you weigh up the options and arrive at the most logical conclusion.

  • Six Thinking Hats – this is an exercise that helps you analyse decisions in various ways, but focussing on one way at a time. Adopting this tool can help you understand various aspects of the situation and is a great way to get your team involved in the decision-making process.
  • Force Field Analysis – this tool can help you weigh up the pros and cons to help you figure out the most suitable choice.
  • Personal Ansoff Matrix: this tool helps you assess the risks of choosing a particular option for your personal development.

Alongside strengthening your decision-making, you can also learn other techniques to help you become a more confident, logical and authentic leader. These soft skills can help you in other areas of the workplace, as well as providing a strong background upon which you can build your decision-making skills, such as:

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Matthew Channell
Matthew is TSW Training’s Commercial Director. He writes about performance focussed learning, leadership, and management approaches that have real-world, sustainable impact.
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