Decision making in the age of urgency
Decision making takes up a lot of time, much of it used ineffectively. New survey results offer lessons for making quick, high-quality decisions that support outperformance.
Making good business decisions is a critical part of every executive’s job and is vital to every company’s well-being. Yet in a new McKinsey Global Survey on the topic,1 only 20 percent of respondents say their organizations excel at decision making. Further, a majority say much of the time they devote to decision making is used ineffectively.
The survey asked about three common decision types, ranging from those that are infrequent but significant in scope to smaller, routine decisions that can be delegated. Most respondents report poor decision making across the decision types we tested. And while most organizations seem to make trade-offs between velocity (how fast was the decision made and executed?) and quality (how good was the decision?), faster decisions tend to be higher quality, suggesting that speed does not undercut the merit of a given decision. Rather, good decision-making practices tend to yield decisions that are both high quality and fast.
Indeed, respondents at the few companies that excel at decision making, which we call decision-making “winners,” report the ability to perform well on both measures while also seeing better financial results.2 Specifically, the winners make good decisions fast, execute them quickly, and see higher growth rates and/or overall returns from their decisions. What’s more, respondents at these organizations are twice as likely as others to report superior returns from their most recent decisions.3 Our analysis of their responses points to the specific decision-making practices that are most associated with being a winner.
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