Making wrong decisions can be deadly. You could lose clients, or your reputation could take a nosedive, or you could literally go out of business. To make good decisions in a business, you need to have a culture of quality that permeates every aspect of business. This way, decision-making can be carried out with minimal risk and maximum reward.
In spite of the importance of making high-quality decisions, the reality is that some small businesses make poor choices. The reasons for this are varied. For example, they may be under pressure to make a quick decision without having all the data available or too close to the situation to see it objectively.
Many may wonder what a “high-quality decision” looks like. The answer is simple: a high-quality decision is a decision that results in positive outcomes for your business, both short-term and long-term.
The following tips can help you improve your business’s decision-making process and avoid costly mistakes:
Set Your Sights on the End Game
The first step to making good decisions is figuring out what you’re trying to accomplish. It’s not enough to just grab any idea that might be floating around—the best decision really depends on what you’re trying to achieve. Whether it’s improving customer satisfaction or gaining a competitive edge in the marketplace, companies need to make sure they’re clear on their goals before they start making decisions.
You have to know not just what you want to accomplish, but what you DON’T want to accomplish, too. That way you can focus on the ideas that actually help you get where you want to go. For example, if you want to make sure everyone in your business is working toward the same end result, then it makes sense to choose a methodology for aligning execution, productivity, and accountability to that vision. (Think EOS!)
Make sure you understand your options. With so many choices out there, it’s easy to get stuck in analysis paralysis—but once you understand the options available to you as well as their respective benefits and drawbacks, you’ll be able to more quickly come to a decision that’s best for your business.
Here are six areas to focus on to make better, faster decisions:
Invest in Employee Development
The success of a business relies on the quality of decisions made by its leaders and its employees. As employees are promoted and they make more important decisions, the consequences of their mistakes also increase. For this reason, employee development is increasingly important as companies grow.
By providing mentorship, training, and other resources, employees can develop skills like problem-solving and critical thinking, which will help them make better choices as they grow in their positions.
When employees improve their abilities, they will be able to make better choices, which can have a positive effect on the bottom line of the business and its growth potential.
It doesn’t matter how many amazing people you have on your team, how solid your infrastructure is, or how much money you’ve invested in technology—none of it will add up to anything if you’re making decisions that aren’t supported by data. The quality of decisions made in any business has a direct effect on outcomes. When a decision is made without the use of data, it can be wrong—sometimes catastrophically so.
So how do we make the decision-making process more reliable? Well, for one thing, you can get rid of the guesswork and make it easier for high-quality decisions by leveraging data. That way, you can avoid the common pitfalls of groupthink, bias, and other errors that can lead to poor outcomes.
Data-driven decisions are less likely to be swayed by personal biases or the tendencies of groups to fall prey to only one point of view. Data makes it easier for business to make informed decisions that are more likely to deliver the best outcomes.
Have an Inclusive Process
Many businesses default to the “senior leadership makes a decision” model, but this leaves out some key people. Instead, try having a process where decisions are made by the most competent levels after data has been collected on the issue at hand.
While these senior leaders are obviously well-positioned to weigh in on important decisions, it’s also important to include other stakeholders who may have valuable insights into how those decisions will be received. For example, if you’re deciding whether or not to launch a new product, you should consider including representatives from sales, marketing, customer service, and production teams in your decision-making process to ensure that you consider all perspectives
When something is as important as making a decision, you want to be sure you are covering all your bases, and that means not basing your decision solely on the opinion of one person. By bringing together multiple perspectives, you’ll be able to make more informed decisions that are less prone to error and more effective!
Be Aware of Biases
In order for decision makers to make well-informed decisions, they need to be aware of their own biases. It’s beneficial not just to be aware of one’s own bias, but to also be aware of bias or partisanship within the team on which you work. This is especially true when dealing with complex problems requiring multiple perspectives, as team members may have difficulty seeing beyond their own experience. Understanding where there could be bias will help prevent it from negatively impacting the decision-making process.
Be Mindful of Your Values/Culture
No matter how much you know about your business, or how many spreadsheets’ worth of data you’ve pored over, or how many meetings you’ve held to canvass the opinions of your team, none of these matters if you don’t make decisions that are true to your values.
When a business makes a decision, it must consider the ramifications on every level of the business. For example, if you’re a large business with a reputation for offering high-quality service and an open-door policy for feedback, it’s important to make decisions that uphold this reputation. Choosing to outsource to a third-party service provider with a history of poor customer service will have consequences in both customer satisfaction and employee morale.
This is why it’s so important to be mindful of the culture you’ve created in your business. How does it impact your decision-making process? Do decisions made take into account all potentially affected parties, including stakeholders both internal and external to the business? Are you hiring, firing, reviewing, recognizing and rewarding people decisions based on your values?
If you can find yourself at the intersection of all these things, you’ll be making decisions that feel right for everyone involved—and that’s where true success lies.
The choice to make decisions that are researched and discussed with key stakeholders and based on your company values is an important one. Paying attention to it is a sign that a business cares about its reputation and its ability to continue to grow over time. By taking the time to gather information and consider multiple options before moving forward, businesses will be able to make decisions that serve the needs of customers, employees, and other stakeholders while also allowing the business itself to flourish in the long term.
Are you building your and your team’s decision making muscles so your average of decisions made are good, quick, and thoughtful? Keep track of the success of your decisions to see where you stand. Just a simple 2 columns in your journal works – the decision made in column 1 and the success of the decision in column 2.
Go forth and make good decisions!