The Most Important Lesson This Fortune 500 Exec Learned From Making Tough Decisions
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. Sharon Fernandez, head of customer care at Farmers Insurance, has answered the question: How do you make tough business decisions?
At Farmers, I make decisions daily—sometimes very tough ones. And I’ve learned some ways to ensure my decisions are the right decisions. Here’s how:
Understand your decision-making process
People make decisions based on their values and core beliefs—at work or at home. So if there’s a big gap between your beliefs and how your company operates, as well as its goals, mission, and purpose, it may be hard for you to make tough decisions. If inconsistencies persist, it may not be the company for you. But when you feel that what you’re doing is meaningful and purpose-aligned, it’ll be easier for you to make tough decisions.
Consider others’ emotional needs
Many decisions will start with a cost-benefit analysis and a look at pure business needs. But the toughest decisions involve other people. I’m willing to compromise on some business outcomes to minimize a negative impact, or maximize one that’s positive in the interest of the employee or the customer. I believe there are intangible pieces that cannot always be translated into a dollar amount. I’ve learned to help those whose peers have been cut in a reorganization, and to reach across departments to see if employees facing a cut can redeploy their skills or activities elsewhere. Any decision eventually has to have an aggregate impact that’s worth it. Be willing to determine the real impact—including the intangibles—and then formulate and validate the decision.
Seek input from others
Everyone is influenced by their own perceptions. That’s why you need to look to people you trust and get their input, especially if they have differing views. That provides balance. There is not one person I can think of who makes a decision the Farmers Insurance team doesn’t believe is the best given the circumstances, but we all look at the circumstances a little bit differently. Sometimes you have to make a decision on your own, then hope you are managing for those biases. Bouncing decisions off of people you know and trust allows you to look at things from different perspectives and realize things you hadn’t before.
Collaboration is vital
Two heads are better than one. Before having a collaborative discussion, firm up your own point of view. If you collaborate without first understanding your own position, you may be easily swayed and reap little benefit. It’s best to have your own thoughts before engaging with others who have valuable, and sometimes complementary or contradictory views. Those discussions don’t necessarily have to be with peers. Talk to somebody on the front lines, or within a different department or level at the organization. It’s important to speak with people who have different experiences. As you encounter people with strong opinions, though, it may take some compromise. Just remember that the goal is to make a better decision.
Ask the right questions
One of the most valuable lessons I’ve learned is that you will never know everything. You should ask more probing questions. Ask, “What would you do, and why?” You will very often be surprised at how thoughtful the answer may be.
Ask a lot more questions than you answer. If you’re making a decision, you need to be culling intelligence from other people. If you don’t have the right pieces of insight to make a well-informed decision, it’s okay to say you don’t know. Ask the right questions to find the answers you need, then make the decision. A bad decision is usually made when you feel pressured to make a decision without the information you need.
Become confident despite ambiguity
Truth is, I never have all of the information I need to make a decision, but I’ll often have at least 80%—enough to make a good decision. Get comfortable with ambiguity and find the point where you know enough. If you wait until you have every last bit of information, it will take too long. Business moves fast. If you make a bad decision, learn from that experience.
Making tough decisions is hard, but with skill, determination, and a few key tips, it’ll get easier.