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University of Sunderland

The connection between effective leadership, management and decision making

Posted on: July 12, 2022
Three small figurines of business men stood on a piece of paper with dotted line arrows

When bringing to mind the most effective leaders and managers, most of us will likely envision individuals who exhibit decisiveness: the ability to make decisions quickly and effectively. After all, uncertainty, confusion and a laissez-faire approach are characteristics that are unlikely to inspire confidence, commitment and belief in team members.

As such, problem-solving and decision making abilities are intrinsic to good leadership and what others expect from those acting in leadership capacities. However, do all leaders possess the skills required for decision making, or can they be acquired? What does the decision making process in leadership and management look like? Are there drawbacks to decision making in leadership?

Is decision making important in leadership?

As leadership styles vary greatly, so too do decision making styles. Regardless of the methodologies used, the two are closely connected as timely, accurate and consistent decision making sums up a modern leader. Decisions made by those in senior roles can lead to the success or failure of a business. According to global management consultants, Bain and Co., a 95% correlation exists between organisations who excel at effective decision making and those with strong financial performance.

And it goes beyond profit and healthy bottom lines, as effective, data-driven decision-making can result in numerous benefits to an organisation. These often include:

  • Business growth and development
  • Greater employee satisfaction
  • New opportunities and initiatives
  • An ability to influence organisational behaviour
  • Increased productivity and high-performing teams
  • Clarity of organisational direction
  • Time, resource and cost savings

As businesses can’t function without decisions being made, having effective decision-makers within an organisation is key. While decision-making skills are vital in any role, across any sector – no business can function effectively if staff members are not empowered and equipped to make decisions consistent with their roles and responsibilities – they are fundamental to those in leadership positions: many of the most potentially transformative and important decisions are made at a higher level.

Fortunately, we now have more knowledge, data and analytics at our fingertips than ever before to help make better-informed choices and arrive at the best decision.

What is the difference between leadership and management?

Leadership and management – while often discussed interchangeably – have considerably different roles to play in the workplace. On a surface level, the distinction is that leaders have people who follow them while managers have people who work for them.

The remit of those in leadership roles is to motivate and inspire individuals to work towards a common goal or vision. Often concerned with the ‘big picture’, leadership is a process of influence requiring skills such as creativity, emotional intelligence, effective communication, strategy, flexibility and an ability to strengthen and nurture the skills of others. In contrast, management’s focus is to ensure the smooth and successful functioning of teams and processes. It’s rooted in task administration, monitoring teams and resources, and achieving day-to-day targets and goals.

However, leadership can exist in any role: it is not a skill or ability that is limited to leaders and managers. A good manager is not necessarily a good leader, and vice versa; but, with an awareness of the core competencies and focuses required for each, the skills can be highly complementary across both roles. Despite the differences in focus, both leaders and managers must engage in decision-making processes to be effective in their roles. Problems and situations requiring decisions to be made occur continuously; while they are not always high stakes, leaders must still conduct the necessary assessment of options, deliberation, and collaboration required to choose the best course of action. Keeping relevant teams and team members in the loop – and involving them where necessary – helps to engender organisational cohesion and belief in a given decision. 

How can managers and leaders be effective in decision making?

Leaders and management teams are often tasked with making potentially transformative, important decisions. For example: whether organisational restructuring is needed, whether to attempt to break into a new market, or whether a company requires a change of direction. As well as arriving at the best decision for a given situation, they’re simultaneously required to regulate the emotions of staff and stakeholders, navigate volatile environments, and communicate belief in their strategic decisions to reassure and inform others. As such, effective leadership requires a varied skill set.

The good news? While many leaders do possess an innate talent for the following characteristics, they can also be developed and adapted over the course of a career:

  • Emotional intelligence. Leaders set the tone for organisational culture and climate; their vision and drive has the potential to boost buy-in and empowerment throughout a workforce. This is why it’s essential for effective leaders to possess the ability to manage and understand both their own emotions and those of others. Emotional self-control in relation to making strategic, rational decisions is key.
  • Managing uncertainty and challenging situations. While inaction can be a valid course of action in certain decision-making scenarios, uncertainty can be paralysing. When resources such as energy, time and money are limited, leaders must use the data available to them to limit choices – and, therefore, reduce the likelihood of feeling overwhelmed – and gather the information needed to try and reduce uncertainty.
  • Intuition. Many leaders believe in following their gut instincts. By trusting themselves, and drawing on their wealth of experience and expertise, they can more easily dismantle cycles of indecision and over-thinking.

While it’s almost impossible to arrive at the right decision every single time – after all, we can only do our best with the information available to us in the moment – there exist plenty of ways to enhance individual aptitude for decision making.

Set the standard for transformational leadership and management

Gain the skills to lead the way in the workplace – including how to make better decisions – with the University of Sunderland’s flexible, online MSc Management programme.

You’ll develop as a leader and manager capable of tackling the challenges of the fast-paced, ever-evolving twenty-first-century business environment. Our experts will equip you with a wide-ranging and thorough understanding of core business disciplines, from entrepreneurship, strategic management and consultancy, to innovation, transformation and ethical decision-making. Your learning will be grounded in real-world practice, enabling you to easily transfer your leadership skills and know-how to your own career.

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