How to make good decisions,
with James Manktelow & Amy Carlson.
All of us have to make decisions every day.
Some decisions are relatively straightforward and simple: Is this report ready to send to my boss now?
Others are quite complex: Which of these candidates should I select for the job?
Simple decisions usually need a simple decision-making process. But difficult decisions typically involve issues like these:
With these difficulties in mind, the best way to make a complex decision is to use an effective process. Clear processes usually lead to consistent, high-quality results, and they can improve the quality of almost everything we do. In this article, we outline a process that will help improve the quality of your decisions.
A logical and systematic decision-making process helps you address the critical elements that result in a good decision. By taking an organized approach, you're less likely to miss important factors, and you can build on the approach to make your decisions better and better.
There are six steps to making an effective decision:
Here are the steps in detail:
To create a constructive environment for successful decision making, make sure you do the following:
This step is still critical to making an effective decision. The more good options you consider, the more comprehensive your final decision will be.
When you generate alternatives, you force yourself to dig deeper, and look at the problem from different angles. If you use the mindset ‘there must be other solutions out there,' you're more likely to make the best decision possible. If you don't have reasonable alternatives, then there's really not much of a decision to make!
Here's a summary of some of the key tools and techniques to help you and your team develop good alternatives.
This is especially helpful when you have a large number of ideas. Sometimes separate ideas can be combined into one comprehensive alternative.
When you're satisfied that you have a good selection of realistic alternatives, then you'll need to evaluate the feasibility, risks, and implications of each choice. Here, we discuss some of the most popular and effective analytical tools.
In decision making, there's usually some degree of uncertainty, which inevitably leads to risk. By evaluating the risk involved with various options, you can determine whether the risk is manageable.
Another way to look at your options is by considering the potential consequences of each.
Determine if resources are adequate, if the solution matches your objectives, and if the decision is likely to work in the long term.
After you have evaluated the alternatives, the next step is to choose between them. The choice may be obvious. However, if it isn't, these tools will help:
For group decisions, there are some excellent evaluation methods available.
When decision criteria are subjective and it's critical that you gain consensus, you can use techniques like Multi-Voting . These methods help a group agree on priorities, for example, so that they can assign resources and funds.
The Delphi Technique uses multiple cycles of anonymous written discussion and argument, managed by a facilitator. Participants in the process do not meet, and sometimes they don't even know who else is involved. The facilitator controls the process, and manages the flow and organization of information. This is useful where you need to bring the opinions of many different experts into the decision-making process. It's particularly useful where some of these experts don't get on!
With all of the effort and hard work that goes into evaluating alternatives, and deciding the best way forward, it's easy to forget to ‘sense check' your decisions. This is where you look at the decision you're about to make dispassionately, to make sure that your process has been thorough, and to ensure that common errors haven't crept into the decision-making process. After all, we can all now see the catastrophic consequences that over-confidence, groupthink, and other decision-making errors have wrought on the world economy.
The first part of this is an intuitive step, which involves quietly and methodically testing the assumptions and the decisions you've made against your own experience, and thoroughly reviewing and exploring any doubts you might have.
A second part involves using a technique like Blindspot Analysis to review whether common decision-making problems like over-confidence, escalating commitment, or groupthink may have undermined the decision-making process.
A third part involves using a technique like the Ladder of Inference to check through the logical structure of the decision with a view to ensuring that a well-founded and consistent decision emerges at the end of the decision-making process.
Once you've made your decision, it's important to explain it to those affected by it, and involved in implementing it. Talk about why you chose the alternative you did. The more information you provide about risks and projected benefits, the more likely people are to support the decision.
An organized and systematic decision-making process usually leads to better decisions. Without a well-defined process, you risk making decisions that are based on insufficient information and analysis. Many variables affect the final impact of your decision. However, if you establish strong foundations for decision making, generate good alternatives, evaluate these alternatives rigorously, and then check your decision-making process, you will improve the quality of your decisions.
Take our How Good is Your Decision-Making? quiz to find out how we'll you're doing all of these things now!
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