The 4 Types of Decisions, and How to Approach Each One Making good decisions is critical to business success. The first step in good decision-making is to understand that not all decisions are created equal.

By Doug and Polly White

Opinions expressed by Entrepreneur contributors are their own.

Making good decisions is critical to business success. The first step in good decision-making is to understand that not all decisions are created equal.

We like to differentiate decisions along two dimensions: importance and urgency. An important decision is one that has the potential to have a significant impact on your business or on a person's life. An urgent decision is one that you must make immediately -- there is no time for further consideration.

Related: How Not to Be Too Busy for Your Own Good

If you consider these two dimensions together, the results are these four types of decisions, and how to approach them:

1. Neither urgent, nor important

  • Consider taking no action. If a decision is neither urgent nor important, you may not need to make it at all.
  • Delegate to others. Such decisions provide an opportunity for a manager to coach subordinates on how to think about decision-making.
  • Delay to less hectic times. Resist the temptation to focus on items that you can check off your "to-do" list quickly when there are other more important and urgent decisions that need attention.
  • Beware of morphing. Don't delay the decision until it becomes urgent.

2. Urgent, but not important

  • Don't overanalyze. Because these decisions are not important, going through a lengthy process to make the decision simply doesn't make any sense. In some outrageous cases the cost of the time spent analyzing a decision can exceed the cost of making a wrong decision.
  • Use principles. Rules of thumb, guidelines and principles can provide a great way to make decisions quickly and efficiently. This will also ensure that decisions align with the values of the organization.
  • Listen to your gut. As an experienced businessperson, you have good judgment -- don't be afraid to use it.

Related: 4 Ways to Get Your Gut to Shut Up and Your Brain to Speak Up When Making Decisions

3. Both urgent and important

  • Prevent morphing. Left unaddressed, many decisions will morph into this category. Don't let it happen.
  • Beware of false urgency. Many decisions that are portrayed as urgent, aren't. Don't be pressed into making an important decision without careful consideration when you don't have to.
  • Reduce urgency. Consider whether you can take steps to buy yourself time to make this important decision.
  • Keep options open. Consider options that will allow you the most flexibility later. If you can avoid it, don't get locked in.
  • Consult experts. These are the people that are the most likely to have immediate insight into the right direction to proceed.

4. Important but not urgent

  • Identify and address the right problem. Solving complex problems requires asking a series of questions that are relatively easy to answer. The answers to these more straightforward questions then lead you to the solution of the more complicated issue.
  • Have the right mindset. When you face a big decision, don't be overcome by emotions. Ask two questions: What do I want to happen next? What do I have to do to maximize the probability that that occurs?
  • Utilize appropriate analytical tools. For decisions that are important but not urgent, it is sometimes helpful to use decision-making tools. There is time to apply the tools and the cost of doing so is justified by the magnitude of the decision.
  • Seek the counsel of experts. Any time you face an important decision, seeking help from experts is a good idea.
  • Live with your decision before executing. Make a decision and sleep on it before implementing.

Good decision-making is critical. Understanding the type of decision you are facing and responding appropriately will help you to increase your effectiveness.

Related: Refuse to Be Sucked Into Uncertainty

Doug and Polly White

Entrepreneurs, Small Business Experts, Consultants, Speakers

Doug and Polly White are small business experts, speakers and consultants who work with entrepreneurs through Whitestone Partners. They are also co-authors of the book Let Go to GROW, which focuses on growing your business.

Editor's Pick

Related Topics

Science & Technology

5 Mistakes I Learned to Avoid When Working With ChatGPT

What I learned from using ChatGPT for business purposes day-to-day across my content websites.

Business News

Renowned Federal Judge, 96, Faces Yearlong Suspension For Refusing to Retire

Judge Pauline Newman, a highly respected figure in patent law, has been suspended for one year by her colleagues due to mounting concerns about her mental fitness.

Business News

Christian Influencer Found Guilty of Defrauding Dozens, Ordered to Pay Nearly $90,000

Dana Chanel was the co-owner of two businesses that she heavily promoted to her 1.1 million Instagram followers.

Cryptocurrency / Blockchain

Why the Next Crypto Bull Run Will Be Like Nothing We've Ever Experienced

We are on the precipice of what could be the greatest transfer of wealth that has ever happened in human history.

Business News

These Are the Top 10 'Mega Airports' in North America, According to a New Report

J.D. Power's annual ranking named Detroit Metropolitan Wayne County Airport highest for customer satisfaction for 2023.

Branding

AI vs. a Human Touch: Finding The Right Balance When It Comes to Branding

With branding at the forefront of every marketing strategy, finding the balance between AI and genuine human interaction will help brands foster authentic connections and enhance the customer experience, ultimately driving them ahead of the competition and facilitating long-term growth.