Decision-Making is of prime importance for good leadership. Generally it is thought that a good leader makes all the decisions and they have to be the best.

In this modern age, it is impossible for one person to make all the decisions and for all the decisions to be the best. There are too many unseen variables and too many people involved in implementation for a leader to make all the decisions and for them to be the best ones.

However, understanding the types of decisions and the people involved in making them can help the leader to manage the complexity of decision making. The factor that makes decision-making easier and the types of decisions are given below.

Decisions are Data-Based

A good leader makes decisions based on data, which is analyzed for patterns of information. The information is then used to make decisions that are well thought out.

While it is true that you cannot know everything, doing an analysis of available data about a predicament will, nevertheless, lessen the risk of failure.

While all decisions need to be data-based, there are at least four different types of decisions:

1. Paradigm Decisions

Paradigm decisions are those which provide guidelines for decision-making for all people in an organization or team. Decisions such as: Having a smoke-free organization, having a non-discrimination policy, etc. are paradigm decisions. They help team members and leaders to make the right decisions when they are faced with a dilemma.

Such decisions need to be made with the involvement of everyone affected. The consensus process is a very useful methodology to make such decisions.

2. Policy Decisions

Policy decisions are necessary to provide resources and official permission for the operations of an organization.

For instance, if the Performance Appraisal Process needs to be reviewed, then a couple of policy decisions need to be made. A decision needs to be made to set-up a committee which will analyze the existing process. The different teams in an organization need to volunteer a representative to become members of the committee.

The management team needs to allocate money and time for this team to function and come up with an insightful report.

All decisions that are made to ease the functioning of the teams are policy decisions.

Policy decisions are made in a participatory mode with the involvement of everybody who will be involved in the execution of the task.

3. Procedural or Functional Decisions

Procedural decisions are made by a few people who will be carrying out the plans/policies/goals of the organization or who will be impacted by the decision. These are decisions that will help implement a process.

For instance, outlining the procedure of recruitment and selection in an organization is a process of detailing the actions that a team will take when they follow this procedure. It will also detail the actions to be taken if there are exceptions.

4. Structured Decisions

Structured decisions are made by individuals who are directly executing the plans of the organization. These decisions are informed by the data available to the employee, the procedures/structures that have already been put in place, and the knowledge of the policies and paradigms of the organization. The decision-maker could be the CEO or the security guard at the gate.

Understanding the kinds of decisions – and the people who need to be involved in making them – provides the leader with the confidence to make decisions; sometimes alone and sometimes with others.

This will also give the leader confidence in the decisions of his team members, as they are made with an understanding of the values and procedures of the organization.