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A-Z of Business: J – Judgement: The Key to Effective Decision Making

Judgement is your ability to assess a situation and to draw sound conclusions.  This is a key factor in your decision making process.  How do you judge whether something is right for your business or not?  And how do other people judge you and your business?  When you understand this, it can really help you:

a) make decisions which serve your business well
b) help you to help other people make judgements in your favour

There are various ways in which we may be convinced of something-

  • Number of examples - ie the third time you see something, you are sure it’s right
  • Automatically -  you don’t take too much convincing, you just automatically trust that something is right
  • Period of time - you need to think about something for a while before deciding, even if it is an obvious solution
  • A trusted source – if you hear it from someone you trust, or know they are doing the same thing, that’s enough to convince you
  • Logic – you need to evaluate the facts before deciding if something is right for you
  • Emotion – you tend to trust your gut
  • Impact on the bottom line – you will not be convinced of anything unless you see how it will affect the bottom line
  • Tried and tested – you need to see something working somewhere else before you think about it for yourself
  • Cynics – you are never truly convinced of anything

None are right or wrong in themselves.  However, it’s possible to rely too much on a particular method which could leave you vulnerable.  For example, going on gut instinct without checking the effect something has on your bottom line could affect the profitability of your business; relying on a period of time may mean that an opportunity is lost; being automatically convinced can be dangerous as there is no evaluation of the possible impact something may have; cynics can fail to take opportunities because they always find fault; depending on tried and tested methods can mean you are behind the curve in terms of your competition; relying on logic alone can mean that you are ignoring the not inconsiderable power of your intuition; depending on a trusted source requires that the trusted source be right 100% of the time or that their circumstances are the same as yours.

Ask yourself, what other factors do you need to consider when you are formulating your decisions?  Do re-read the decision making part of this series.

Finally, what to do with this information when considering your customers and prospects?  You will be well-advised to consider an example of all the above criteria in relation to your products and factor in where appropriate.  For example, Jack has a strong gut instinct but likes to back it up with number of examples, so you might want to either find three ways of proving your product, or expect to make your case over three appointments, and follow that up with “What does your gut tell you about the suitability of our product for your business?”

Or, Sally may make her decision solely on the bottom line.  So you may want to take the approach of showing the cost savings your product will give her, or the revenue potential, or perhaps some other way of impacting the bottom line.

If you aren’t sure about what someone else’s convincer strategy is, ask them how they decided to buy their latest car, computer system or even holiday.  This should give you a lot of clues.

Even the most successful business people have made bad judgements in their time. However, you can minimise yours by considering all of your options to make a more informed decision.

If you would like to discuss you own business decision making strategy, or change the way others judge your business, please contact us on 0845 130 0854.

© Tricia Woolfrey 2012

About Tricia Woolfrey - click HERE to find out about the author.