“Life is filled with difficult decisions, and winners are those who make them.” – Dan Brown, American Author
A survey conducted by Boston Consulting and recently reported by the Media Pioneer news portal revealed that 90% of executives in Germany tend to hesitate or avoid making decisions. This decision-making gap may lead to missed opportunities worth billions for businesses. Excessive risk avoidance can cause stagnation, lack of competitiveness, and missed chances for success.
In a recent WR, I had already written about moving from „best choices“ to „satisfactory ones“ as I don’t believe there are „optimal“ decisions. Based on my recent experiences that align with the above study’s results, I’d like to provide more thoughts about decision-making.
This WR, therefore, explores routes to bridge the decision-making gap.
Identify Your Decision-Making Gap
Before attempting to improve it, try and understand your decision-making style. By assessing your current decision-making patterns and abilities, you can identify areas needing improvement.
Do you struggle to make tough choices or tend to make quick, impulsive decisions? Knowing your approach will help you improve your decision-making process.
Gather Information from Multiple Sources
Before solving a problem, it is crucial to clearly understand the issue that requires a decision. Asking open-ended questions can help collect important information. It is vital to consider different perspectives and aspects. Consulting with subject matter experts, front-line workers, or partners who complement your strengths can provide a well-rounded perspective without having to result in analysis paralysis. This collective input can help improve your approach, determine the best course of action, and ensure all stakeholders are on board.
Understand the Decision Type
Not all decisions are the same, and having a decision-making framework can aid the process. Consider the time required, the level of buy-in needed, the reversibility of the decision, and your biases as a decision-maker.
As pointed out in my previous WR mentioned above, a starting point may be to categorize decisions using Jeff Bezos‘ widely publicized „2-Types“ framework:
- Type 1: decisions that are consequential and irreversible or nearly irreversible
- Type 2: decisions that are changeable and reversible
Ask the Right Questions
The Forbes Coaches Council suggests that addressing six key questions can streamline the decision-making process:
- What is the decision to be made?
- What are the expected benefits and outcomes?
- What actions can be taken post-decision?
- What obstacles or consequences need consideration?
- What results are expected post-decision?
- What could be a contingency plan if the outcome is not as expected?
Establish Clear Criteria where Warranted
It is crucial to agree on clear guidelines for making decisions in situations where the stakes are high. Type 1 decisions in Jeff Bezos’ categories. These guidelines should be discussed and agreed upon in advance with relevant parties, such as executive management, finance-, or legal departments, to ensure that potential consequences are understood and minimized.
Dare to Decide without Complete Information
Sometimes, you may feel like you might need more information to make a decision. In such cases, it is better to acknowledge that you are uncertain and willing to adapt your decision if new information becomes available. It is important to remember that not making a decision is still a decision and can entail significant long-term risk. Therefore, being able to make decisions under uncertainty is a significant competitive advantage. (Mind you, most decisions are Type 2 anyway!)
Align Decisions with Your Strategy and Core Values
Strategy and core values can guide your decisions. Aligning your decisions with these principles can simplify complex choices and make you more effective while staying aligned with your organization’s priorities and values.
Go beyond Facts and Data
The most effective decision-makers take into account the perspectives of their mind, emotions, and intuition. Each brings a unique viewpoint: the mind provides facts and logic, emotions offer desires and feelings, and intuition can provide a sense of risk. Ignoring any of these perspectives may lead to an insufficient understanding of the situation.
Sleep Over it
While immediate action may feel necessary, allowing decisions to ‚percolate‘ overnight can provide a fresh perspective and lead to better choices.
Draw Inspiration from Role Models
Thinking about how your heroes (Steve, Jorma, Arianna, Elon, Anne,…) would handle a situation can offer fresh perspectives and innovative solutions. This method can also help reduce unconscious biases and encourage imaginative problem-solving. Incorporating AI can bring a new viewpoint to the table by prompting a chatbot to take on the persona of a prominent business leader in your decision’s context and „discussing“ your challenge with it (obviously in compliance with your organization’s AI and chatbot policies!).
Decide, Act, Assess
It’s important to remember that effective decision-making is usually not a one-time event but rather a continuous cycle of planning, doing, studying, and taking action (a PDSA cycle). While weighing the potential outcomes of a decision is crucial, the true measure of its effectiveness lies in how well it is executed and the subsequent results. Regularly evaluating the outcomes provides an opportunity to enhance or improve the impact of your decision(s).
Improve by Deciding and Reflecting
Learning occurs through action and reflection, so the more decisions you make, the more you learn and improve. It’s particularly important to make time for reflection if you often feel the need to make quick decisions. By slowing down and examining your own biases, you can engage in more thoughtful decision-making, leading to better and more effective choices.
Understanding and addressing any gaps in your decision-making approach will allow you to confidently navigate complex business issues and become a more effective leader.
Here are some more perspectives:
How to Make Great Decisions, Quickly
Martin G. Moore distills the DNA of good decisions down to eight points in his HBR article
12 Ways To Make Better Decisions
A useful „laundry list“ provided by the Indeed editorial team
I’m off to Aperol Spritz and the lake…
Enjoy your summer weekend!
All the best,