7 Tips for Making Quality Business Decisions
Entrepreneurs and business owners make hundreds of decisions every year, but what can they do to uncover any biases or blind spots in their decision-making?
Unfortunately, decision-making can be difficult. It's impossible to predict if the decision you are about to make will yield incredible results or create a situation that requires damage control.
A survey from McKinsey & Company found that only 20% of respondents say their organizations excel at decision-making. Albeit a jarring statistic, there are effective ways entrepreneurs can improve the quality of their decision-making process.
1. Consider your state of mind
In today's world, there is a lot of pressure to move quickly, and decision-making is no exception. It's important to consider that we're not always at our best mentally or emotionally to make decisions. If you are feeling agitated, scared, or angry, you could make a rash decision that could have lasting negative consequences.
If you feel that your emotional state is off, take a moment to clear your head. Deep breathing, exercise and meditation are great activities to improve your overall state of mind and can best prepare you for the decision-making process.
Related: How To Regain Work/Life Balance
2. Carefully evaluate the situation and data
The information we have in front of us doesn't always tell the whole story. Making decisions based on incomplete information could lead you to make the wrong decision. Take the time to evaluate the whole situation carefully. Be curious and ask plenty of questions to ensure you have all the information necessary to make a good decision.
Data can be your best friend and worst enemy when making decisions. Be cautious of information overload. One survey found that 44% of people found decision-making difficult due to overwhelming amounts of data. And, you don't want to make a decision based on quantitative data alone. There are other factors like human emotion that are difficult to translate into data.
3. Review your desired outcomes
In his bestselling book, The 7 Habits of Highly Effective People, Dr. Stephen Covey urges his readers to "begin with the end in mind." Decision-making becomes significantly easier when you know your choices will take you one step closer to achieving your goals or strategic objectives. Before making any decision, take a moment to review your personal goals or company mission statement. If the decision reinforces your goals, it's a good indication of what path you should take.
4. Identify your blind spots
Blind spots are areas where you lack sufficient skills, knowledge or experience that could negatively influence your decision-making. For example, deciding to merge with another company without a solid understanding of contract law could be a disaster. Ask a friend or business partner to help you identify your weaknesses or blind spots. Better still, join a peer board with non-competing business owners. This will help you proceed more cautiously the next time you have to make a decision that involves one of your blind spots.
5. Include others in the decision-making process
While entrepreneurs and business owners are solely responsible for the success or failure of their companies, they don't have to make decisions alone. In many cases, you can leverage the support of other professionals (such as senior managers, human resources, attorneys, CPA, etc.). Having other people participate in the decision-making process can bring new perspectives you might not have considered.
Related: How to Make Better Decisions
6. Just make a decision
While it is critical to ensure you have carefully considered all the options before making a decision, inaction is often worse than making the wrong decision. You have to make a decision one way or the other.
A good strategy is to consider the worst thing that could happen. If the worst-case scenario is something you can live with, you'll at least feel confident that you can remedy the situation if it doesn't work out the way you hoped it would.
7. Communicate your decisions
Once a decision has been made, it's essential to make sure that all the impacted people are informed of the direction you have chosen to go. The way you communicate your decisions can affect how they are received. Some delivery methods are better than others. For simple decisions, an email or memo will work just fine. However, difficult decisions that require detailed explanations may be more appropriate to deliver in a face-to-face meeting.
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