Best Practices for Decision Management
As an entrepreneur or manager of an organization, you encounter multiple problems that need to be solved as quickly as they arise.
But to solve these problems, you need to have the ability to make timely and informed decision(s) that will ultimately help your organization and employees reach full potential. Additionally, the business world keeps moving at a fast pace, and you have best management practices springing up to help you make more informed, analytical, and effective decisions.
Erik Larson, the founder and CEO of Cloverpop, states in his Harvard Business Review article that managers who implemented best practices ninety percent of the time reached their goals and exceeded these goals, forty percent of the time. Yet only a handful of managers and business owners have been able to consistently and fully implement these best practices when it comes to decision making
In reality, applying some of these best practices might not be as easy as they appear. In making these decisions, you encounter:
- Uncertainty: Not knowing the full facts of the problem.
- Complexity: Multiple interrelated factors that you should consider.
- High-risk consequences: The need to consider the significant impact of the decision
- Alternatives: Available alternatives and the uncertainties and implications of each of them.
- Interpersonal issues–having a sense of how different people will react to the decision made, etc.
Sometimes decision making goes beyond knowing such best practices. The key factor here is the ability to implement these practices. In this article, I have not only put together some of the best practices for decision making, but I also inform you on how you can go about achieving them with more ease and desired results:
Have Clarity of Purpose
Experts often say that the best decisions are taken based on research, careful thought, and trust in the gut. Most effective decision-makers have the intuitive ability to look past obstacles and focus on what, when, and how each decision ought to be taken. For some people, they need first to learn clarity as a skill and then leveraged on.
It is essential to correctly frame the perspective and parameters of the decision that needs to be taken. There is also a need for you to define the objectives and options in detail and then align the decision with desirable outcomes.
Having clarity of purpose enables you to make decisions that are appropriate and consistent with what needs to be achieved. When there is a disruption of purpose, you are likely going to lose touch and begin to make decisions without the right dependencies and resources needed for sound decision making.
Note that there is a need to clarify the level of involvement and expectation of each person involved in the decision-making process.
Make Timely Decisions
Being decisiveness means that you also need to be timely. You find out that the decisions that do the most damage are the decisions that didn’t get made on time. When reviewing your previous decisions, you also need to look at all the decisions you didn’t get to make because you missed the time frame in which to take advantage of an opportunity.
Dave Girouard, the CEO of Upstart speaks on the importance of making timely decisions as “the first step to greasing the wheels of the decision-making progress is to begin by calculating the time and effort each decision is worth, who needs to have input, and when you’ll arrive at an answer.”
Remember that there is a shelf live placed on every decision you need to make, so you need to make sure that you set up tight timeframes during your decision-making process.
Review your Decisions and Learn from Mistakes
For most people, myself includes the mistakes we encounter from taking the wrong decisions hunts us for a long time, or we forget about them without learning the vital lessons, this is bound to bring your business to a halt.
The truth is that mistakes will be made from time to time, and rather than let be a constant adversary in our decision making management, it is crucial to review such makes and learn the lessons we can pick from them that can help in making more informed decisions. Even the most experienced CEOs and top Mangers still mistakes. What they do to fix this is to review those decisions and identify the better choices they can make in the future.
Strike the right risk balance
Most people are averse risk-taking, primarily because of the current business environment or because they see risks as something you avoid as opposed to something you take. But in reality, for every entrepreneur or manager out there, taking risks is critical to your decision-making, effectiveness, and growth.
Henry Ristuccia, partner, Deloitte & Touche LLP in his Wall Street Journal article, gives some sound advice that “… executives overseeing risk management should consider becoming more risk intelligent” he goes further by providing skills to consider when striking the right risk balance:
- Check your assumptions at the door
- Maintaining vigilance
- Anticipate causes of failure
- Verify sources and corroborate information
- Maintain a margin of safety
- Sustain operational discipline, etc.
As I stated earlier in the article, though these best practices may not appear as easy as they seem, with constant research and the willingness to implement them, you are bound to achieve the desired result in your decision-making process and management.