May 29, 2020 7 min read
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People make thousands of decisions a day. Some are small and insignificant, others are big and potentially life-changing. Managers, business owners, and leaders make substantially more decisions than the average person and are regularly faced with making high-stakes decisions. As a result, it’s common for leaders to suffer from decision fatigue, to fall back on comfortable decision-making styles, or to defer making big decisions.
Yet, being an effective decision-maker is one of the most important skills for leaders to have. Good decision-makers positively impact the trajectory of their business and earn the confidence and respect of their teams. Peter Drucker, the well-known management consultant and business author, often talks about the importance of decision-making. He advises that, “making good decisions is a crucial skill at every level” and has observed that “wherever you see a successful business, someone once made a courageous decision.”
The good news is that there are things you can do to become a better decision-maker. Even if decision-making is an area of angst for you, something that you often put off, or something you struggle with, there things you can do to maximize your decision-making potential. Here are 7 proven methods that all business leaders should implement.
Have a system and follow it
One mistake that many people make when it comes to decision-making is letting their emotions play too big of a role in the process. It’s easy to make an emotional decision and then come up with a rationale to support that decision. To avoid falling into this trap, it’s important to have a clear decision-making process. While you obviously can’t use this process for every small decision you make throughout the day, it should be utilized for all major decisions.
Having a system in place will make it easier to tackle hard decisions and will provide some objective steps to go through during the decision-making process. While the specifics of this process will vary to meet the unique needs of individuals or organizations, a good decision-making framework should include:
Clearly identifying the decision that needs to be made
Articulating the desired outcome;
Brainstorming potential decisions
Analyzing the pros and cons of all possible decisions
Gathering feedback from relevant stakeholders
Making the decision within a specified timeframe
Effectively gather information
An important part of making a well-informed decision is gathering information. Yet, in the current environment, there are seemingly endless amounts of data points and information, making it easy to get overwhelmed by this step of the process. To effectively gather information, it’s key to focus on gathering the right information. It’s much more important to focus on quality over quantity when it comes to this step of the decision-making process, so think about the specific type of information that you need and focus on gathering only that data.
Reach out to experts
While many decisions are unique to your organization or situation, it’s likely that someone in your field has faced a similar decision. It’s always a good idea to reach out to experts, whether internally or externally, to get advice about significant decisions. Plus, doing so offers additional information on the issue and the perspective of a third party.
Control your emotions
Interestingly, research indicates that the more important a decision is, the more emotional it becomes for decision-makers. It’s important to note the difference between going with intuition and letting emotions drive your decision. After going through a thorough decision-making process, it’s a good idea to trust your gut to help with the final calculus. Serguei Beloussovm, the CEO of Acronis, a unicorn technology company with a focus on cyber security, talked about the power of going with intuition in an interview we did in fall of 2019:
“At times I suggest using your intuition, which is much more powerful than your brain because it has more neurons and more synapses, so the fact that it’s more powerful is not any kind of mystery. [The difference is that] your brain is only computationally more powerful. The conscience gives you some feelings, you get sort of slight signals. You may not be able to explain those feelings at the time because your conscience is so poor in configuring – in calculating what happened. But at times, go with your conscience.” Belousovm continued with an analogy: “Imagine there is a key in a dark room… you can use a high powered laser and only see a extremely tiny portion of the room well lit and have a very difficult time finding the key, or you can use a candle and you can see the whole room dimly lit and find the key quite easy. The candle is your conscience.”
In contrast, letting your emotions control the process can result in improperly weighing and evaluating options. To avoid this, try to be aware of the impact your emotions are having and focus on the objective criteria that are part of your decision-making system.
Create a filter for evaluating decisions
A decision-making filter consists of a few broad questions that you ask before making any significant decisions. This filter could include things like, will this help the business grow? Does it benefit employees? Does it impact the company in a positive way? Having a few central questions that are applied to all big decisions can help to focus and strengthen your decision-making process.
Make decisions in a timely manner
You don’t want to rush a decision, but it’s also important to not drag out the decision-making process. Doing so generally doesn’t lead to making better decisions and can lead to others losing confidence in your leadership abilities. Navigating the line between a rushed and a thought-out decision is diferent for different leaders. There are many processes for making a decision. For example, some may take a day to sleep on it or go for a run before making a big decision. When I was a graduate student at Columbia University, my professor Neal Pilson, former President of CBS Sports, gave me advice that never left me. “Hold off on deciding anything important on Fridays,” said Pilson. “If it’s that important it can wait until Monday when you have really thought it through.” Whatever your process, it’s important to find the right balance of allowing yourself adequate time to consider decisions while also forcing yourself to make timely, confident choices.
Creating a process for evaluating decisions will help you to become a better decision-maker. It will also help to identify common decision-making mistakes and specific areas of concern. This process can be as simple as having a spreadsheet or journal that documents decisions and monitors how effective they turned out to be.
Decision-making is one of the most important skill sets of effective leaders and managers. It can control how your business grows, how your employees respond to you, and the confidence you instill internally and externally. Hopefully, these proven methods will help to make you a stronger and more confident decision-maker.