All decision-making involves risk. Use these three strategies to reduce risk when making decisions.
You face risk in all decision-making. A goal of yours should be to reduce that risk as much as is reasonable. There are three primary methods for reducing risk.
First, involve more people in the decision-making process. They’re going to give you additional information and offer perspectives you may not have thought of. Additionally, by involving them early, you’re reducing execution risk on the back end. You’re getting people to buy into the decision now so when it comes time to execute, they’re onboard.
The second way to reduce risk is take more time. Today, the future may be completely uncertain. A month from now, maybe you’ve resolved some of those sources of ambiguity. A year from now, you have even better information as to the environment you’re going to make your decision in.
The third way to reduce decision-making risk is break big decisions into smaller decisions. If you’re trying to decide whether to relaunch the entire company website, perhaps you break that decision down and you make a smaller decision today of launching a pilot website, gather some additional information, and then make the bigger decision down the road.
There’s a balance between gathering information and making a decision in a timely manner because gathering information takes time and money. And yes, you’re reducing uncertainty by doing so, but remember, there are always new sources of uncertainty entering the equation. So find that balance between having enough information to make your decision.
As you look at ultimately reducing decision-making risk, remember to involve more people, take more time in making the decision, and break those bigger decisions into smaller ones.
Want to learn more about developing your decision-making strategies? How about taking an entire course on it? Check out the video below to learn more about the course and get started. Or you can go directly to the course and start learning how to make better decisions. The entire course is available at LinkedIn Learning. Enjoy!
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