5 Steps To Great Decision-Making
In this article, Bryan Kramer discusses the five steps to good decision-making. It is another in our “Great Articles You may have missed” series.
The 5 Steps To Good Decision-Making
Business decisions are hard-hitting. We’ve all agonized over our choices, whether in the office, the kitchen or during that movie you’ve wanted to see for weeks.
When we’re stuck, who can ever confidently say with complete conviction which decision is the right one? Without possessing the benefit of hindsight to check and balance our choices, we can never be completely sure. In reality, we probably can’t unequivocally commit to anything in business. And every decision comes with its sliding-doors-style set of alternative consequences.
Acknowledging that all of your decisions will have imperfections, even if they’ve succeeded in their goals, will help you to make better and faster decisions in the future. Delaying your decisions and flirting with inaction through fear of making the wrong choice might feel sensible, but it just causes anxiety.
Step 1: Identify your Goal
A myriad of factors come into consideration when you make any business decision. Clearly identifying your goal from the outset will make it easier to shake off factors that compromise your objectives.
Gather as much information as possible and review your situation. Which choices will drive your business closer toward its collection of goals and targets? Prioritize decisions that create actionable change, to turn abstract goals into tangible results.
You might be making decisions that aren’t instant wins on a superficial level (i.e., a spike in sales). But look below the surface and acknowledge that your decisions are still valid if you’re keeping in line with your brand’s long-term strategy.
Step 2: Gather Information
In order to make fully informed decisions, it is essential that you conduct extensive research. Do your homework before you act. In your information gathering process, ensure that you eliminate your biases and look at information objectively. Be honest in your review and include information that tests your preconceptions and instincts.
By allowing information that contests your viewpoint into your discussion, you can make your assertions more robust. You can also demonstrate how the decisions you make take contrasting perspectives into account. Be sure to provide your test results on each method.
Step 3: Consider the Consequences
It goes without saying that you need to have one eye on your present situation and another on the consequences of certain business choices. Thoroughly assess the possibilities and effects that a range of different decisions will trigger.
The Scottish-based craft beer company, BrewDog, for example, has been phenomenally successful at tapping into the craft beer market. They’ve done so with their own brand of punk-inspired, radical brewing techniques with their own bombastic marketing strategy. They’ve adopted a combative approach to the Advertising Standards Authority and other larger breweries. And they pride themselves on their individualism, and being marked as the antithesis of Britain’s old-school beer industry.
Their ‘Equity for Punks’ crowd funding scheme has been groundbreaking. 50,000 customers have a stake in the company — a brand for the punks, sticking a finger up to the big man.
So, it’s interesting to see that BrewDog recently sold a 22% stake to U.S. investment firm TSG. On the face of it, this is a good business decision, right? The deal values BrewDog at $1 billion and crowd funders who invested in the first fundraising round have seen their investment increase by 2,765%. You could see this as purely successful from a profit-based perspective.
Was It The Right Move?
But BrewDog’s brand identity has suffered as it’s embraced corporate cash. They once stood against the establishment and the capitalist characteristics it embodies. Are they sellouts now that they’re a part of the mainstream they once mocked? The outsiders are now the insiders.
Some beer consumers will be put off by this. But to cultivate the long-term objectives and expansion plans that BrewDog has, it made business sense to sell a stake to another company. It’s already the fastest-growing food and drinks producer in Britain and it’s making its mark across the globe.
Tough decisions are about juggling conflicting values. This is where you must decide which value is most important. The key is to stay authentic. Because of BrewDog’s growing success, there was always going to be a crossroads where it needed to commit to becoming bigger and better. Their business decision was a good one but had negative consequences for the brand.
Step 4: Make a Decision
Failing to make a decision is counterproductive, whereas delaying your decision-making only has a comforting impact on your conscience. It won’t benefit your business.
If you have gathered your information accurately and thoroughly assessed the potential consequences, in theory, you should be able to make an informed decision and act. When your empirical evidence that backs up your decision-making is laid out in front of you, there’s no reason to delay.
We’re hardwired to worry, so take a breath and be confident that you’ve acknowledged objective perspectives, contrasting views and have sought to provide a solution that moves your business toward positive, long-term objectives.
Step 5: Evaluate the Outcome
Sometimes it’s not immediately obvious if your decision is successful or not. It depends on whether your choice relates to short-term results or long-term ideas. It could even be years before you come to a conclusion about your decisions.
It’s important to note that viewing your decisions through a binary prism of “good” or “bad” isn’t reflective of the complexity or context of your decision-making process. There will always be ways to learn from decisions, regardless of the outcome. Your information might have been imperfect, but you used what was in front of you at the time.
Use metrics that are in line with your objectives in order to evaluate your decisions. Learn from your oversights and underestimations and all of the many various possible mistakes that are possible. Use your understanding to advise the rest of your ongoing business decisions. Concentrate on being effective with your decisions: Did your choice do what you wanted it to?
What Do You Think?
Do you have a step in your decision making that isn’t covered above? Please share it with your fellow readers. Thanks!
Also read: Big Data = Better Decisions and Smarter ROI
Previously published on LinkedIn, entitled “The Death Of Indecision: Five Ways To Improve Decision-Making” and re-published here with permission. It was originally posted on Forbes.
Lead/Featured Image: Copyright: ‘https://www.123rf.com/profile_nomadsoul1‘ / 123RF Stock Photo
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