THE HUMAN FACTOR: The choices that Kissinger made were not always between the obviously right and wrong. 'These were 51/49 decisions Sometimes we made mistakes'.

THE HUMAN FACTOR: The choices that Kissinger made were not always between the obviously right and wrong. 'These were 51/49 decisions Sometimes we made mistakes'. - It's make-your-mind-up time. Every day faces managers with fresh decisions to be made. Some

by PATIENCE WHEATCROFT, business and City editor of The Times
Last Updated: 31 Aug 2010

It's make-your-mind-up time. Every day faces managers with fresh decisions to be made. Some can be delayed, but rarely can they be ignored. And although the necessary response will often be clear, not even in the printing business is everything black and white.

There are occasions when the most careful examination of the issues and the most thorough evaluation of the potential solutions will still leave doubts as to the best way forward. Yet delay in coming to a conclusion risks organisational paralysis.

I'd been pondering the issue of decision-making and coming to no particular conclusion when at the end of April I made my way through the crowds of anti-globalisation protesters to the Institute of Directors Convention.

There Dr Henry Kissinger, main target of the protesters' fury, explained that when he was Secretary of State in the US, the decisions he was taking were not always between what was obviously right and what was obviously wrong: 'These were 51/49 decisions. Sometimes we made mistakes.'

The impact of the decisions that Dr Kissinger took was greater than those that the average business person has to confront. 'Mass-murder' is the allegation levelled by those who want to put him on trial for his role in the Vietnam war. But the way he accepted both the need to take a position and the risk that it might prove incorrect resounded with his audience.

Every decision-taker has to live with the risk of failure. And although there is much talk in management theory about the need for managers to encourage their staff to accept that honest failure should be regarded as part of the business process, such tolerance rarely extends to senior levels. Chief executives who make the wrong call on a major issue are unlikely to find their shareholders - or the media - chanting supportively that 'we all make mistakes'.

So it is understandable if some executives delay determining on a course of action. Most famous for his interminable deliberation is Sir Geoffrey Mulcahy, CEO of Kingfisher. He would argue that he sensibly delays taking the plunge until he has analysed the options available. His critics would say that he analyses the analysis and then continues to dither, with damaging results. Most recently was the debacle over the demerger of Woolworth from the group. So long did Mulcahy agonise over whether this should be done, over how it should be done, and finally over who should do it that the business suffered badly as attention, and expertise, drifted away from core operations. Staff, suppliers and the markets wanted to know what was happening; instead, they faced months of uncertainty.

It is the same when takeover rumours start swirling around a business. The target may find its share price buoyed by the hope of a high offer, but the firm itself is instantly destabilised. Marks & Spencer, beset with a raft of problems on the shop floor and in the boardroom, found its predicament worsened when Philip Green mooted a takeover bid. The company used tough tactics to see him off, anxious to clear up the situation so that it could concentrate on putting right the pressing problems within the business. They would not have been so pressing if in the past the board had not shied away from the difficult but necessary decisions about management succession, but at least the signs are that the business is now headed in the right direction.

Since decisions often have to be made on the narrow margins that Dr Kissinger admitted, they are bound to be wrong sometimes. It can be easier to rectify mistakes in business than in politics, and being quick to acknowledge a mistake and ready to make amends is a useful business characteristic, if not a common one. 'The lady is not for turning' was the description of herself that delighted Lady Thatcher's fans, but it would not guarantee success in the business world. (At the IoD, Dr Kissinger told me that she was one of the politicians he most admired. He had heard of her when she was the Education Secretary, his journalist wife-to-be having interviewed her. 'You must meet her, Henry,' she told him. Kissinger approached the then prime minister, Edward Heath, and asked him to effect an introduction. Nothing happened. Eventually, he went direct, inviting Mrs T to dinner. Even then, it seems, Heath was not enthusiastic about advancing the woman who was to become his enemy).

But in business, those who make mistakes need to turn and to turn fast if they are to survive. Lord Sainsbury of Turville, as David Sainsbury, announced that his organisation had no need to resort to loyalty cards in order to hold on to customers. As Sainsbury's stuck to this line, Tesco triumphed. Lord Sainsbury is now a politician and his firm has a loyalty card.

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