Of all the things you have to do in business, making effective decisions is probably the most important. Decisions can vary from a simple yes” or “no”, or between a variety of options or even to determine what the options are. The subject of the decision can also be varied from hiring and firing, appointing the right supplier, deciding whether to increase your product portfolio or consolidate, expand or downsize, borrow or cut costs. Each of these decisions can have long term consequences so it’s prudent to make sure your decision-making is pretty robust. Delay can be as destructive as the bad decision.
Here are my top ten tips to effective decision-making:
- Clarify the problem you want to resolve – different people may have a different perspective on what the problem is.
- Include relevant stakeholders in the decision-making process – if the right people are not involved, they can adversely impact the implementation of your decision.
- Brainstorm all the options – don’t judge them yet, just put all the options down on paper. Essentially this is about becoming aware of what you could do before you decide what you should do. If you go into the shoulds too early, you cut yourself off from creativity.
- Determine what will let you know the decision was a good one.
- Make a list of the pros and cons of each option and for each stakeholder including:
- Costs involved, especially whether the solution outweighs the problem it is intended to resolve
- Effect on profit
- Effect on customer relations
- Impact on employees and workflow
- Ability to support the decision in terms of skills, time and resources (a lot of good decisions don’t work out because of the lack of infrastructure to make them happen).
- Ask yourself whether it is line with your personal and business values – if it is not, it is bound to lead you into hot water at some point.
- If you are not at peace with the decision ask yourself what the concern is. Is there a way of addressing this concern whilst going forward with the decision?
- Make sure the solution is treating the cause of the problem rather than the results.
- Consider any negative outcomes which may result from your decision and minimise those as much as possible – even the best decisions can have negative consequences – sometimes the best decision is not the most popular so it’s important to think of the short-term and long-term implications and how you can mediate those.
- Last, but by no means least, develop an implementation plan – no point in going through all of this if it isn’t going to bear fruit.
Finally, problems to avoid:
- Analysis paralysis – you can spend too much time gathering data to make your decision – get the balance right. Often the information being collected is to provide comfort rather than to influence your decision either way. Gather only what you need.
- Procrastination – the enemy of success and the refuge for those who fear failure. Procrastination can cause missed deadlines, missed opportunities, wasted resources, delayed projects, and frustrated customers, vendors, employees and co-workers . It can often cause a loss of respect. The worst thing is not to do anything. Much better to anticipate problems and plan for them.
- Impulsivity. This is often the curse of the enthusiast. They often rely on their “gut” but the decisions are not backed up by critical thinking around consequences and implementation issues. Make calculated decisions and then your gut will tell you if it’s right or not. A “niggle” can tell you that there is something you’ve overlooked.
- Ignoring different viewpoints. Sometimes the best ideas come from the most unexpected places and if you are filtering information through your ego, you are closed off to this. At the same time, you don’t want to pander to people’s ideas if they don’t work. It’s important simply to be open and receptive. Sometimes someone else’s idea might not be right in itself but is the seed for something which is.
I can’t resist one more tip: ask yourself whether it will feel like the right decision a year from now. This often flushes out any unconscious concerns or validates a difficult decision.
To your success,
© Tricia Woolfrey 2012
About Tricia Woolfrey - click HERE to find out about the author.