The Fortune 500 Insiders Network is an online community where top executives from the Fortune 500 share ideas and offer leadership advice with Fortune’s global audience. Alan Colberg, president and CEO of Assurant, has answered the question: How do you make tough business decisions?
Two of the hardest decisions I’ve had to make in the past year were deciding to sell one of our businesses and wind down another one.
Early last year, we evaluated our portfolio of businesses at Assurant and decided to sharpen our focus on the housing and lifestyle markets to ensure profitable growth. That, however, meant that our employee benefits and health businesses no longer fit into our go-forward strategy.
From a business perspective, we had completed a comprehensive review and knew our plan was strategically and financially sound. Still, it was a very difficult decision for me to make. I had worked side by side with employees at these businesses for 20 years as a consultant before joining Assurant (AIZ). I knew many of them personally and knew the decision would affect not only them, but their families, as well.
Rightfully, employee considerations are one of the most important and challenging aspects to address when it comes to making business decisions. To move forward in these situations, you need to take a step back and focus on the long term. Your primary consideration has to be what is in the best interest of the company, while recognizing that those affected by such decisions need to be treated with respect and provided with necessary support to help them transition into new roles. It is hard, and you won’t always feel great after every tough decision you make, but it’s imperative to recognize that your decision has to be made in the best interest of the company.
Here are a few other key points to always keep in mind to tackle tough decision-making:
Start with your principles and values
Many smart, well-intentioned people make poor decisions because they are too close to a situation, get caught up in the moment, or feel pressured to meet certain business goals. But an unflinching commitment to ethics is critical to the decision-making process, so much so that I had this language embedded in Assurant’s leadership team charter.
Stay open to other points of view
Often, you’ll have very firm opinions about specific aspects of a proposal even before sitting down to discuss the matter for the first time. Despite your personal feelings, remain open to hearing other points of view and don’t discount additional information that challenges your thinking, as it may help you make a better decision later on.
Bounce your ideas off a trusted advisor
Just as you bring your biases to the table, your colleagues may also be predisposed to a specific course of action. It is important to recognize that and find a confidant—someone who doesn’t have a vested interest in the outcome of the decision—to bounce your ideas off and test your thinking.
Once you’ve made a decision, it is important to act on it. Waiting usually doesn’t help address a problem or move the company forward.
Even after taking all of these steps, it is likely that some of the decisions you make will not turn out exactly as you expected. Your decision may not gain wide support even if it is clearly understood to be the best path forward. What you decide doesn’t have to be popular, but it does have to be arrived at with integrity. One of the questions I ask my colleagues when they are on the brink of making a decision is if their decision passes what I refer to as the “the sunshine test.” In other words, “Would you be comfortable if your decision was publicized on the front page of the newspaper and shared with millions of readers?”
In other cases, you may have to take responsibility for a bad decision. If you make a mistake in the decision-making process, find out where you went wrong, and then accept accountability and try to learn from it.