How Leaders Make Decisions in the Face of Ambiguity

Most humans hate ambiguity, and as Nat King Cole once said, “That’s a natural fact.” While most would choose to avoid uncertainty, a select few embrace it. The problem occurs when those who don’t welcome ambiguity lack the information they need to understand what’s going on — especially during times of rapid change. The absence of information causes people to make things up, and a conspiracy theory is born. When leaders understand this phenomenon and their own tolerance for ambiguity, they can communicate more effectively, thereby fostering trust, conveying respect and building cohesive efforts. Here’s a way to think about ambiguity and decision-making:

Decisiveness under pressure requires a high tolerance for ambiguity. When people tolerate or even appreciate ambiguity, they demonstrate the ability to synthesize. As you might recall from chemistry, synthesis is the production of a substance from simpler materials after a chemical reaction. During a time of change, leaders need to serve as catalysts for the chemical reaction.

Decisive leaders who have low tolerance for ambiguity can aggregate data. That is, they can make decisions based on loosely associated fragments of information. This works under ordinary circumstances, but most leaders find very little about developing a new strategy ordinary.

The analyst doesn’t fare so well amid the chaos of major change initiatives. Their tendency toward indecision, coupled with their intolerance of ambiguity, often explains why conspiracy theories surface. When decision-makers don’t really understand their own reasons for doing things and they become mired in analysis paralysis, others rush to fill in the gaps with whatever bits of information or rumors they may stumble across.

Theorists, those who enjoy an element of ambiguity but who find decision-making daunting, won’t do much better. Given enough time, they can make the right call, but once again, opportunities appear and disappear quickly. So do the rumors. While these decision-makers dawdle, those around them hurry.

In Landing in the Executive Chair, I introduced the term F² Leader to describe leaders who balance fairness and firmness and model effective leadership during most situations. However, not all F² Leaders have what it takes to make tough calls in those situations when ambiguity haunts from the moment they decide to take a different strategic direction until the ink dries on the contracts – and beyond.

In these high-ambiguity situations, I find that leaders too often opt for what I call the “five typical wrong turns.” One of these usually explains why things didn’t go as hoped.

The 5 Typical Wrong Turns

1. A Focus on Process Over Results – Too often, leaders become ego-involved with their tactics, defending them, even when a mountain of data suggests they don’t work anymore. Usually, this kind of wrong-minded focus causes a temporary setback.
2. A Preference for Popularity Over Respect – Most people want to be liked but leaders don’t get paid to be liked; they get paid for results. When they don’t hold people accountable, or when they fail to make tough calls, they give people reason not to respect them, which usually makes these same people not like them. This drips of irony.
3. A Penchant for Perfection, Not Success – I encourage my clients to move when they’re 80 percent ready, because the time and money required for reaching 100 percent won’t compensate for lost productivity. Of course, some things must be accurate and precise; one side of a door jamb can’t differ from the other side by even a fraction of an inch. But those in the C-suite left those kinds of decisions to others years prior to their promotions.
4. Choosing Quick Fixes Over Goal Accomplishment – As much as I champion speed in decision-making, I don’t advocate settling for the wrong decision. In a crisis, leaders want to reduce pain for themselves and others in their companies, so they opt for the quick fix. This action may look decisive and courageous, but without good judgment, it can be reckless. Honing good judgment involves keeping the long-term consequences for every major decision in view.
5. Seeking Harmony at the Expense of Problem-Solving – People who over value popularity frequently also gloss over conflict. They shy away from debate, even though challenging themselves to do so leads to better decisions. When leaders make good hiring decisions and then fail to listen to those smart people, disagree with them and encourage them to differ with each other, they metaphorically leave smarts on the table — along with the money that better decisions would have engendered.

Each of these wrong turns involves a decision or a series of decisions that takes the leader and others in the organization down the wrong paths. These won’t always be roads to perdition, but leaders who stay on them too often or too much find they have ended up where they never intended to go.

You can usually trace conspiracy theories to one of these wrong turns, too. During times of change, people want to know the “why” behind the decision. If leaders provide the rationale behind their decisions, they can reduce uncertainty for the people who work for and with them. Communication — verbal, nonverbal, concrete, specific messages — provides the key to unlocking success, high morale and productivity. It will also quash the conspiracy theories.