How Operating Alone Impacts Decision Making
The Value of Community
In business, as in life, the value of community cannot be overstated. The "The Principle of Shared Success" suggests that we are all interconnected, and that helping one another can lead to mutual benefit. In the context of business decision-making, this principle underscores the importance of seeking input from others; whether they are peers, mentors, or team members. Whether driven by uncertainty, or a desire for self-reliance, leaders who isolate themselves from outside perspectives are more likely to make decisions that limit their potential.
The Challenge of Isolation in Business
Operating alone prohibits access to critical external viewpoints, which can limit a business’ ability to adapt and overcome. With shifting market conditions, changing customer demands, and new regulations, businesses need diverse input to remain agile and competitive. Leaders who fail to engage with others risk missing out on insights that could help them make better decisions and stay ahead of the competition.
Isolation can also hinder long-term growth. Without a support network of mentors, advisors, or peers, businesses face challenges in identifying new opportunities, securing investments, or adjusting to market changes. This lack of collaboration can stifle innovation, making it difficult to evolve with the business landscape.
Don’t Just Take Our Word For It
For decades, research has proven that businesses fostering collaboration outperform their competitors in terms of innovation, profitability, and adaptability. A seminal 1996 study by David Messick and Max Bazerman explored the psychological tendencies that hinder sound decision-making. The study emphasized how executives, faced with moral and ethical dilemmas, often make decisions not out of malicious intent but due to cognitive biases and flawed information processing. These biases can lead to poor ethical choices and, ultimately, less successful business outcomes. They argued that confronting these tendencies, particularly through collaboration and diverse input, could improve both the ethical quality and success of executive decision-making
In a more recent study, McKinsey & Company found that organizations that prioritize collaboration within and across teams are significantly more likely to outperform their competitors. These businesses achieve stronger financial performance and greater resilience in the face of challenges. Leaders who encourage collaboration benefit from a broader range of insights, which not only enhances problem-solving but also ensures decisions are well-rounded and reflective of a wider array of perspectives.
Looking at the almost 30 years between these studies, one thing is clear: despite the ever-evolving business landscape, some things never change. The power of collaboration is as vital today as it was decades ago.
Risk Management Through Collective Wisdom
One of the most significant benefits of collaboration is the ability to manage risks more effectively. In today's fast-paced business world, it can be difficult to foresee challenges before they arise. However, when business leaders in similar industries join together, they can pool their collective knowledge to address potential risks early on.
We’ve witnessed firsthand how collaboration drives success within our captive insurance communities. Our UTA (United Tower Association) pod meets regularly for STR: Standardized Training Resource meetings. During these sessions, business owners and safety personnel meet to discuss what's working- and what isn't within in their businesses. Whether it’s strategies for reducing employee turnover or discussions about new technologies, these meetings provide a platform for transparency and trust.
By engaging with one another, UTA members can share ideas about everything from improving safety protocols to adopting the latest technology. This exchange of knowledge helps them solve problems more efficiently, and come up with solutions they might not have considered on their own. As a result, these collaborative efforts enable UTA members to be more innovative, responsive to change, and better equipped to tackle the challenges that arise in their businesses. They also gain insights that help them refine strategies, adapt to new circumstances, and remain competitive.
The Strength of Community
Success in business often comes down to the connections we make and the insights we gather from others. Even as challenges evolve, the value of learning from different perspectives remains constant. Building a network of support, whether through peers, mentors, or industry groups, enables better decision-making and growth.
If you’re curious to know how collective knowledge could benefit your business, join our next meeting.
Sources:
Ethical Leadership and the Psychology of Decision Making- David M. Messick and Max H. Bazerman
https://sloanreview.mit.edu/article/ethical-leadership-and-the-psychology-of-decision-making/
Untangling Your Organization’s Decision Making- Mckinsley Quarterly