“Decision-making is like an anchor to the business. The ability to make Quality Business Decisions successfully holds the company together and determines whether it will float or sink.”
According to McKinsey’s Global survey, only 20% of the participants stated their companies excelled at decision-making. Additionally, the majority felt that the time spent making decisions was wasted due to inefficiency.
Making sound business choices is an essential component of every entrepreneur’s job and is fundamental to the success of a business.
Every decision addresses a problem. This problem-solving process lays the foundation for continual improvement.
Being nimble and understanding that power and liability are two sides of the same coin helps bring agility to decision-making, especially when one takes the associated responsibility.
Let’s take a look at what it takes to make sound decisions that are in the best interest of the organization and the employees.
Good state of mind = Good decision making
The need to act swiftly is the need of the hour, and this adds pressure to decision-making.
It’s imperative to understand that one is not always in the ideal emotional or psychological condition to make judgments. A snap decision in an unfavourable state of mind is unlikely to be well thought out and favourable.
When hungry, angry, lonely, tired or sick, it is better to avoid taking decisions. The choices you make when you have an unsettled mind versus a clear mind are comparable to how your reflection seems cloudy in boiling water but clear in still water.
A good decision-making process would be one that would rid your mind of any mental tics that could lead to confusion in your analysis, observations, conclusions, and judgments.
Trust your Team
Delegating decision-making is another way to take the load off your table. It empowers your team motivates them, builds trust and leads to higher engagement.
The leader needs to ensure that they delegate right. Here is a framework to follow:
Determine the limits
Identify the delegates based on their fitment, skills and knowledge.
Monitor, using tracking and feedback tools to ensure the delegated decisions align with the company’s goals.
Examine the situation and data thoroughly
If the situation is complex, it may have many possible solutions.
Designing a balanced assessment of a ‘pros and cons list is a simple and straightforward decision-making technique.
This approach involves asking the pertinent question and listing out the Pros and cons of the decision. Then weigh each of the items on the two lists. The next step is to predict the probability of these materializing to arrive at the winning decision. The matrix looks something like this:
Another approach is to analyze available data and examine it to assess impact. The tool used most often is the SWOT analysis.
The “strengths and weaknesses” strategy is especially useful in interactive problem-solving and decision-making problems where you need to grasp the meaning and make decisions objectively.
The data presented may not necessarily reveal the basic overview. Making judgments based on insufficient knowledge will often lead to poor outcomes.
Instead of looking through a short-sighted lens, spend your time evaluating the entire scenario thoroughly. Be curious, ask questions, and clarify all doubts to ensure you have all the data needed to make an informed decision. But remember, data can be your best friend or your worst enemy.
According to a study, 44% of participants find it challenging to make decisions due to information overload. Also, decisions cannot be made based solely on quantitative facts. The humane element that needs to be factored in is challenging to quantify but is an equally important consideration for a sound decision.
Look for the Solution
Although entrepreneurs and business leaders are entirely accountable for their businesses’ growth or decline, they do not have to make choices alone. Roping in senior leaders and soliciting their input may bring fresh perspectives and help with more balanced decisions.
According to research, team decision-making is highly successful as it pools individuals’ cumulative skills and perspectives, soliciting out-of-the-box thinking and bringing unique solutions to the table. It also helps eliminate underlying biases within the team.
It allows you to observe and learn. Studying how others approach and overcome a particular difficulty helps one become conscious of their implicit tendencies, highlighting areas of improvement that may help improve your interpersonal skills in managing your team.
After all, it takes a team to make a business successful.
Lastly, take Control of the Situation, and not the other way around
“In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.” – Theodore Roosevelt.
Although delegated decision-making increases efficiency, corporations can never eliminate blunders and erroneous judgements now and then.
While it is vital to thoroughly analyze all possibilities before making a decision, inactivity is often worse than an incorrect decision. You must decide whether to go one way or the other. In this circumstance, CEOs must resist succumbing to the impulse to lose their cool.
Instead of removing decision-making authority from staff after a blunder, one should hold them accountable for their actions, educating them on implications to prevent similar errors in the future.
To prevent errors and ease decision-making, an escalation process needs to be drafted and adhered to to ensure uniformity throughout the business.
The escalation process needs to be monitored on an ongoing basis. Look for blockage or instability symptoms, reassess the decision-making structure’s alignment with company goals, and check if procedures and accountability are appropriately structured.
When you’ve zeroed in on the best structure for the organization, roll it out by getting buy-in across levels and factoring in feedback. To create the appropriate system, solicit advice from senior team members and get a 3rd party neutral perspective, such as a business coach. A Business coach brings in a higher-level viewpoint and immense experience that could help create a process that is more robust & lasting.
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Discover how you can control the circumstances and environment in which decisions get made at your company and pump up your ride to the top!