Executives have to make dozens of decisions every day, but how often do they make the right ones?

Ultimately, that question is answered by the success or failure of the company. However, too often the results of bad decisions are blamed on various other factors, such as a sluggish economy or mediocre employees.

The decision-making culture that the executive has established in the company hugely affects whether the right decisions are made. Executives’ big egos are the root cause of most bad decisions. If you believe that you’re the smartest person in the room, then you aren’t as smart as you think you are. Good decisions begin with humility and the recognition that others also have good ideas.

Companies that encourage employees to feel free to speak up make better decisions. Employees naturally cringe at the thought of offending the boss, but a fearful atmosphere is not the kind of corporate culture an executive should encourage. Sometimes the boss needs to be offended. Executives should encourage a “tell it like it is” atmosphere, where respectful discussions allow input from many sources. A freedom-to-speak culture allows an executive to discuss potential changes with front-line employees who may offer different insights. Great executives willingly invite the devil’s advocate into the discussion.

In addition, executives should develop critical thinking skills that incorporate the realities and potential impacts of their decisions. The number of executives who operate based on their gut instincts instead of facts is amazing. Let’s face it: Executives can get data and information to support any position they want to take. Those who seek truthful information will make fewer bad decisions.

Well-thought-out plans have to be included in any major decision process. Therefore, if the unknown factors outnumber the known factors, the decision should be postponed. Pay no attention to unrealistic, management-made deadlines, which are usually a product of poor planning and even poorer decision making.

After gathering the facts, seek counsel from trusted members of your team. Ask for their opinions to see if any points were missed and to confirm that they’re on board with the direction you’ve chosen. Decisions that aren’t backed by your team are doomed to fail. This is especially true for decisions that aren’t even brought to the table for discussion. Leadership is about getting your team to believe in you and in the direction in which you are taking the company.

Finally, make the decision. If you are too scared to make the hard decisions, you should find a different job. Indecisiveness creates stress, and stress encourages subpar performance. Making the hard decisions can actually be liberating, allowing you to move forward as a team.

—Don Magruder is CEO of Ro-Mac Lumber & Supply and former chairman of the Florida Building Material Association. Contact him at don.magruder@romaclumber.com or 352.267.5679.