The art of the correct decision

While recently reading an article I was reminded of the value of effective decision making. There are a number of decisions that need to be made over the next couple of months and it is often very difficult to make a good decision – we all know just how a bad decision can affect the bottom line. With that in mind I thought it worthwhile to jot down some of my guidelines/thoughts.

As a management team we often make fun of some of the MBA/CA’s out there who seem to get stuck in “Analysis Paralysis” while evaluating opportunities, essentially getting stuck on the detail to the point where no decision is made – never mind an effective one! So what makes an effective decision and how does one arrive at it?

Decisions need to be made based on a clear understanding of the problem; enough information to support the process; ensuring decent alternatives; and finally a concise understanding of the decision – sounds simple enough, so why do we often struggle.

In order to have a clear understanding of the problem at hand appropriate questions must be asked to crystallise the problem. All too often the problem to be solved is different from the decision being reached. Questions should be focussed around specifics – the who, where, what and the how often make it simpler to reveal this.

Once the problem is understood appropriate time must be spent to gain the relevant information about the choices available and their potential impact not only in solving the problem at hand but also on the business at large. It is here that one should tread carefully: not only is it easy to spend way too much time on the research but some of the research could be misdirected due to assumptions on the importance of the decision on the business.

When it comes to choices it is critical that real options are made available. Let’s take “Should we enter the widget making industry? Yes/No” – in this case the original problem may have been mis-stated. If the choice is really that simple, did it really require a board meeting? Healthy and constructive debate on choices is not only necessary but it also improves the odds of actually being able to execute the decision.

This brings me to the next important aspect – clearly stating the decision, making sure all role payers know what is expected, setting timelines and then pushing through on the timely execution of the decision. This aspect is critical since all too often decisions are made but incompletely executed.

Now I am not saying all decision making needs to be an intensive and laborious process – in fact far too much time is spent on reaching consensus on non-critical path items. The colour of the sugar bowl really does not need 3 weeks of research 🙂

If however appropriate decisions can be made quickly (not rushed), managed and executed it can create a far more positive environment for all.

On the point of making a quick decision – actively deciding to do nothing is often a valid but omitted choice – no, this is not procrastination, it is an active decision. (Hmm, wonder who I am trying to convince – hehe).

Anyone have any specific comment or input on decision making in business?

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