7 Tips for Making Quality Business Decisions
What can business owners and entrepreneurs do to identify any biases or blind spots in the hundreds of decisions they make each year?
Unfortunately, making decisions can be challenging. It’s difficult to know whether the choice you’re going to make will produce amazing outcomes or lead to a circumstance that needs damage management.
Only 20% of respondents in a McKinsey & Company survey said their businesses excel at decision-making. Despite this startling number, there are practical approaches for business owners to enhance the caliber of their decision-making.
1. Consider your state of mind
Making decisions is no exception to the urge to act swiftly that exists in today’s world. It’s crucial to remember that sometimes we’re not in the best possible mental or emotional shape to make decisions. You may act rashly and make bad choices that could have long-lasting repercussions if you are feeling upset, terrified, or angry.
Take a moment to gather your thoughts if you feel emotionally off. Exercise, meditation, and deep breathing are excellent ways to elevate your mood generally and can best equip you for making decisions.
2. Carefully evaluate the situation and data
Sometimes the information we have in front of us does not fully convey the situation. You run the risk of making the incorrect choice if you base your selection on insufficient facts. Spend some time thoroughly assessing the entire scenario. To make sure you have all the information required to make an informed decision, be inquisitive and ask lots of questions.
When making judgments, data may either be your best friend or worst enemy. To avoid information overload, be selective. According to a survey, 44 percent of respondents said that the overwhelming volume of data made decision-making difficult. Additionally, you shouldn’t base your choice solely on quantitative information. Other aspects, such as human emotion, are challenging to quantify through data.
3. Review your desired outcomes
Dr. Stephen Covey advises his readers to “begin with the end in mind” in his best-selling book The 7 Habits of Highly Effective People, because doing so makes decision-making more simpler and will move you closer to reaching your goals or strategic objectives. Reviewing your personal objectives or the mission statement of your business should be done before making any decisions. A solid indication of the direction you should follow is whether the choice supports your objectives.
4. Identify your blind spots
Blind spots are areas where you don’t have the necessary expertise, information, or experience, which could have a detrimental impact on how you make decisions. For instance, choosing to merge with another business without a firm grasp of contract law could be disastrous. To help you recognize your limitations or blind spots, enlist the aid of a buddy or business partner. Join a peer board of business owners who aren’t competitors. The next time you have to make a choice that could potentially involve one of your blind spots, this will enable you to move more cautiously.
5. Include others in the decision-making process
Although business owners and entrepreneurs are exclusively accountable for the success or failure of their organizations, they are not required to make all of the choices. You can frequently benefit from the assistance of other experts (such as senior managers, human resources, attorneys, CPA, etc.). Participating in the decision-making process with others can introduce fresh viewpoints you may not have thought of.
6. Just make a decision
Even while it’s important to make sure you’ve thoroughly evaluated all your options before making a choice, sometimes doing nothing is worse than making the wrong choice. You have to choose a side and stick with it.
Think about the worst-case scenario as a smart tactic. You’ll at least feel assured that you can correct the issue if it doesn’t turn out as you had hoped if the worst-case scenario is something you can live with.
7. Communicate your decisions
Once a decision has been taken, it is crucial to make sure that everyone who will be affected by it is aware of it. The reception of your judgments may depend on how you convey them. Some delivery strategies are superior to others. Email or memos are perfect for easy decisions. However, it might be better to give difficult judgments that call for thorough justifications in a face-to-face encounter.