Many business leaders struggle with making decisions for their company but there are a few simple steps to work through decision making as a process.
It’s important to realize that decision making is actually a process, and it’s the process of selecting a choice from a range of possible options, with the goal of achieving a very specific objective. Now contrast that with judgment. Judgment is the ability to form an opinion or reach a conclusion based on available information plus prior experience. So, as you go to make a decision, there are some important principles to keep in mind.
First, be clear about the objective. You need to understand what your optimizing for or trying to achieve as you make that particular decision. Second, decide who gets to decide and who doesn’t. Be clear about who’s going to be involved in the decision making process. You need to define who to involve and how to involve them. Some people are going to provide input, other people will provide perspective on implementation, other people will actually make the decision, and having clarity of roles is critical for successful decision making.
Next, you’ll need to reduce ambiguity and risk as much as is reasonable before making your decision. The way to do that is to gather information, but realize that gathering information takes time, and as you’re taking that time, new sources of uncertainty are going to emerge. Next, you’ll need to make your choice and make that choice known to the organization. Tell people you’ve made a decision, what the decision is, and why you made it. And then last, once you’ve made the decision, you need to evaluate and adjust based on new information. So the decision making cycle that you should think about following is first, prepare to make the decision, then you actually make the decision, communicate it to people in the organization, execute, which is put the decision into action, and measure and adjust accordingly.
Defining the Decision
The first step in the decision making process is clearly defining the decision you’re going to make. There are some key questions you should be asking as you’re defining the decision. First, what’s the desired outcome? Is there a specific metric that you’re trying to drive? What are the choices that we’re trying to make? And, what are the possible choices that we can choose from? You need to articulate, when do we have to decide? As well as thinking through, who is this decision going to affect?
If you don’t go through these steps of defining the decision, you’re going to have unclear objectives. And that may lead you to make a bad choice. If you don’t define all the possible alternatives, you might miss a great opportunity. And last, not being clear about timelines, or who’s going to be involved, is going to increase risk. It’ll cause confusion, and it’s going to frustrate people in the decision making process.
Allow me to offer an example of when we clearly defined the decision to be made. In my corporate life, one of the organizations I ran had paper-based payments that we were getting from our business partners. We wanted to move from paper to electronic. So we defined the desired outcome, no more paper, we said the choice we’re trying to make is how to best make that shift for our business partners. We said the possible choices are going paper, electronic, or some hybrid. We clearly defined the timeline, we said we needed to decide by the end of the month, and within six months, we need all the paper to go away. And, lastly, we thought through who is going to be impacted by the decision; Our organization, our business partners, as well as ultimately, our customers.
And by going through the steps of clearly defining the decision, we were able to successfully make a decision up front and execute it well on the back-end. So as you go to make your own decisions, think through this set of five questions and drive that clarity of the decision you’re trying to make.
Want to learn more about the decision making process that you can apply to any business or scenario? Check out the video below or you can go directly to the course and start learning how to improve all different aspects of your business every week. The entire course is available at LinkedIn Learning. Enjoy!
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