The secret behind effective decision making
Good decision makers don’t make many decisions. They make decisions that make a difference. – Adnan Muharemovic, MBA
Great figures in business and history are ultimately the culmination of their decisions. Before any action can be taken – be it entering a new market, developing a new product or invading another country – a decision needs to be made and communicated to all relevant parties for its execution.
In the world of business, the most important decisions fall on the executive. After all, what is the role of the CEO if not that of primary decision maker? Unfortunately, simply making decisions doesn’t cut it in the real world – those decisions need to be carefully planned and executed if they are to yield satisfactory results.
As communicated in the quote above, one of the best ways to approach effective decision making is to limit the number of decisions that one needs to make in the first place. Delegating tasks and responsibilities is vital for managers and C-suite executives as the company grows – otherwise they’ll quickly become overwhelmed and prone to making poor choices. By focusing only on those issues that have a genuine impact on the business and demand the utmost care and attention, you will have the time and resources needed to minimise risk and see through its execution.
Let’s dig a bit deeper into what you can do to encourage effective decision making both personally and in your business:
Effective decision makers turn challenges into opportunities
In many ways, the conditions for effective decision making need to be in place long before any decision actually needs to be made. This is because so much rides on the attitude that professionals bring to the table when they encounter difficulties and challenges in their daily life. A positive outlook is often the difference between resigning oneself to undesirable circumstances and seeing the situation as an opportunity for improvement – and then deciding to take action to make it happen.
For example, let’s look at one of the biggest social companies in the world: Twitter. The microblogging platform initially started as a podcasting platform called Odeo. Unfortunately, the rise of iTunes quickly led to Odeo becoming obsolete and irrelevant. In one of most historic business decisions ever made, Evan Williams decided to pivot entirely and focus on an entirely new concept – a platform dedicated to short status updates. Williams’s entrepreneurial attitude refused to accept that he’d simply drawn the short straw with Odeo, and instead decided to view the situation as an opportunity to pioneer a revolutionary new form of social media.
The steps for effective decision making
Effective decision making should be calculated and strategic. As such, it can be useful to have a framework of general steps to guide your thought process and steer action towards the best possible scenario. Here are seven key steps needed to make effective decisions:
Step 1: Identify the decision
Make sure you have a clear understanding of the decision that needs to be made. A poorly defined decision will make it harder to gather relevant information and decrease the likelihood of a successful outcome. Also make sure to determine if the decision is truly necessary. Unnecessary decisions waste resources and end up undermining those decisions that are actually worth deliberation.
Step 2: Gather relevant information
Once you have a clear understanding of the scope of the decision, proceed to gather as much pertinent information as possible. If the decision will heavily impact a certain stakeholder, such as a group of employees, make sure to hear them out and consider to their input. Any decision made from an ivory tower will rarely have a desirable outcome.
Step 3: Identify the alternatives
While gathering information, take note of all possible paths you can take to solve to problem. Try to think outside the box and consult with other stakeholders to ensure you have considered all possible solutions before committing to one.
Step 4: Weigh up the evidence
Once you have sufficient information and a variety of solutions, it’s time to put it all together to gain a holistic understanding of what would work best and why. Consider ranking each alternative in order of those most likely to deliver the ideal outcome.
Step 5: Choose among alternatives
From your list of possible solutions, it’s time to choose one and run with it. It might even be possible to combine certain elements of multiple solutions to cover more of their advantages. Just avoid overcomplicating your decision or trying to please too many stakeholders.
Step 6: Take action
Only once you have completed all the previous steps are you in a position to start implementing your chosen solution. Ensure that all parties who play a role in the implementation are adequately informed and have the resources they need to get the job done. Open lines of communication with key decision makers can avoid mistakes and misunderstandings before any damage is done.
Step 7: Review your decision and its consequences
Lastly, you should look back on the execution of your decision to determine whether it has been a success. You should always aim to have key take-outs from a decision making process that can inform and improve your future decisions. This is especially valuable if your decision did yield desirable outcomes – determine what went wrong and what you can do to avoid making the same mistakes the next time round.
By following this basic decision-making framework, professionals can be sure that they’ve done their part to maximise the chance of success. While it’s impossible to mitigate risk entirely, such a strategic approach will inevitably yield positive results over time and guarantee that your valuable time as a key decision-maker is used efficiently.
When it comes down to it, the best way to plan for the future and make the right calls is to have the knowledge and experience to never be caught off guard. This is where the true value of an MBA programme comes to light: having various tools and frameworks to guide decision making in complex environments, and combining it with leadership skills to inspire those around you to fulfill your business objectives.