Timing is everything for big leadership decisions

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“The right decision is the wrong decision if it’s taken too late,” said the visionary automaker Lee Iacocca. The speed of top-level decision-making is under question now at a time when the leaders of the two biggest democracies have taken some far-reaching steps rather quickly. Would you prefer leaders who err by rushing to act or waiting forever to decide? How do you know when is the right time to act?

Ain’t broke, why fix?

At a leadership workshop, one of the younger members flagged to our CEO the possible strategy of a competitor and presented some data points highlighting an imminent threat to our leadership position. The CEO said, “Let’s address it when it becomes real.” Six months later the competitor flooded the market with a low-price strategy and, over a period of time, became the market leader. When I look back to that workshop, I recollect the facial expressions of some of the other leaders who probably agreed with the young executive but didn’t support her openly. Can you think of moments in your career where you felt you shouldn’t act because you believed in the adage “if it ain’t broke, don’t fix it”?

Beyond ‘hope’

We hired a new country head as she showed great promise. The references were great too. In the first six months, three of the senior directors quit. But everyone ignored it as collateral damage from the new transition. She also gave the impression that the weak leaves were falling. The customers seemed to like her, she was making the right noises externally. But, at the end of the year, it was clear that more people were quitting under her than staying. “Great with customers, obnoxious with colleagues,” was the talk. It was apparent to all, but the leaders who hired her felt she should be counselled and got her a coach. This only postponed the inevitable. Eventually she quit. But a good two years had elapsed, and the organisation had regressed a lot culturally. They had to get an insider to succeed her, and it took another year for him to turn around the organisation.

In senior leadership roles, ‘hope’ cannot be a decision. Protecting one person’s job or hoping for a wrong decision to turn right can cost organisations a few years of their future and, in turn, destroy many careers down the line. Starbucks, within 17 months, decided to replace its new CEO. Sometimes, it’s difficult for the board to decide ‘how long is too long’, unless it’s an integrity violation, requiring them to act fast.

Analysis paralysis

Some of us need more data points to make decisions. I remember telling our global board members that, with a few strategic moves, an opportunity to create a billion-dollar company in India was a possibility. They said no staffing company had reached that level and kept asking for data points. The next few months were spent on Excel sheets and PowerPoint presentations that MNCs are famous for. And, as it happens in large companies, the super-bosses moved on, the organisation context changed, and the old discussions had to be refreshed. We missed a few M&A opportunities in the ‘analysis paralysis mode’. A few years later, two Indian companies reached a billion-dollar milestone, and I texted my ex-bosses with the emojis that conveyed they missed the India flight.

The optics

Very late in my career I realised that some decisions don’t get taken due to bad optics. One organisation I knew hired a new leader, against whom there were a couple of POSH complaints in the first six months. Instead of taking action against the CEO, the HR counselled the employees who made the complaint. A year later there were six resignations by the affected people. Eventually, it became an open secret, and the enterprise was forced to fire the CEO, but on record it stated that the CEO had resigned due to personal reasons rather than declaring the real reason. Do boards and leaders fear that a faster correction or pulling back on their decisions makes for bad optics?

In the ‘instinct vs thought through’ dilemma, the latter always prevails and, in many cases, the collateral damage on the enterprise culture, people, and financials can be very damning. It is said that a “wrong decision isn’t forever and can always be reversed, whereas the losses from a delayed decision are forever and difficult to retrieve”.

On that note, can you now reflect on the decisions you never took that still haunt you?

(Kamal Karanth is co-founder of Xpheno, a specialist staffing firm)