9 Things Leaders Need to Know for Effective Decision-Making | Extraordinary Business
How to maximize the effectiveness of decisions in a minimal amount of time.
As business leaders, we are required to make decisions all day, every day. For smaller companies, that may look like ongoing idea generation and decision-making might focus on whether or not to execute and how to do it. In a larger business, attention might be focused on customers, employees, vendors and other stakeholders that require information from you and your team.
In either space, decisions are made in three ways: the wild guess, the informed guess and information-based factual answers. Unfortunately, the last is often the most difficult to come by. When doing a product launch, you cannot tell how well the product will be received. When you are doing sales projections, again, these are based on guesses – ideally, informed guesses.
So why is this important?
As a leader, you have followers, whether they are employees, customers, clients or even the community. Simply, if people find you to be an unreliable resource, they will discount you. In contrast to this, entire companies have been built on the fact that they can provide highly accurate informed guesses and projections.
However, it doesn’t stop there. Your decision-making will often impact your bottom line. The more accurate your decisions are, the less time and money you will spend trying to clean up your messes. Does that require that you take a little bit extra time to make decisions? Yep. Sure does. But the investment made now will pay off in the future. Suring up the future is probably a good thing, right?
What you don’t want to do, however, is get stuck in the decision-making process. It is unlikely that you will have all of the information and every scenario in order to make the final decision. In Colin Powell’s autobiography, In His Own Words: Colin Powell he offers that having 70% of the information in order to make a decision and good intuition is ideal to proceed. Other authors offer that 80% is that magic number, based on the Pareto Principle. While the extra 10% can be significant, dependent on the situation, in may cases, you may find that 70% of the information is adequate to make the decision.
How do you do this? What works for me is the following. Your list may be different, but may include some or all of these:
- Commit to not being pressured into making a decision
- In the event that a decision must be made quickly, know how to ask the right questions in order to make the best decision
- Consider your decisions in terms of being accountable for the decision you will ultimately make
- Give yourself a specific timeframe in which to make the decision.
- Determine how much information you need to make the decision. This is where you are able to determine what 70% or 80% of the information will be.
- Gather your resources – people and other information sources. Make a habit of gathering information around you that you will regularly need in order to make decisions that you may or will regularly make. Keep in mind that the sources of information should be reliable and verifiable
- Consider the options and pros and cons of each option – knowledge of what could go wrong allows you to look at the decision in terms of how much risk you are willing to take in order to take advantage of an opportunity
- Have courage; shake off the fear of making the decision. It is not helpful and will cause you to make a poor decision
- Make your decision and proceed. Don’t get stuck in the information-gathering space. Don’t waffle once you’ve made a decision. Proceed on faith – believe in your decision without knowing without a doubt what the outcome will be.
In the event of negative fallout, you have already considered this and have thought through how you will handle this. More than likely, however, the decision will be strong and allow you and your organization to proceed to the next situation. Be strong. Be steady. Build for extraordinary .
Rick Meekins is the Managing Consultant at Aepiphanni, the trusted advisor for business leaders who are seeking forward-thinking solutions to help them plan for and navigate through the challenges of business growth. Our entrepreneurial multidisciplinary team works with clients to develop differentiating solutions and provide direction focused on lasting, strategic results. We exist to help our clients CREATE | DESIGN | BUILD extraordinary businesses.
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