Making tough business decisions is one of the most challenging tasks business owners and leaders face every day.
These nine pointers may help make the process easier.
1. Use different perspectives to analyze your business decisions.
You might improve your business decisions by viewing your issue from different perspectives.
Before making a final decision, consider focusing your attention on these three key areas:
- Focus inward: This is about examining current challenges that might have an impact on your business decisions. Look at possible roadblocks, and how to overcome them. Consider the effect that your business decisions might have on your pre-existing strategies or goals. Does the decision fit with your objectives? Does it support what's already in place? You can also consider how business decisions might impact various business units who may not be involved in the decision-making process.
- Focus outward: Look at trends or emerging technologies in your industry. What can you learn that might help you make better business decisions? Might you gain from seeking information from customers, suppliers, vendors or other stakeholders? What competitive or market research might help you in making an informed decision? Can knowledge of your local economy be of help? In that regard, consider mining data from sites such as The Bureau Of Economic Analysis (BEA).
- Focus upward: How does the prospective business decision align with your vision and mission? What is the direction you set for your company? Does the decision support or deviate from that direction?
Don't lose sight of your strategic agenda. Stepping back to look at the broader picture may help you gain clarity and prevent poor decisions.
2. Consider using decision-support software.
As technology is a pervasive part of all aspects of our lives, you might like to explore one of the many programs designed to help support your decision-making.
Consider doing a search for the various decision-making apps out there that might fit your situation. Cloverpop, Parmenides Eidos and Fingertip are just a few of the apps out there that may help you on your journey.
3. Look for what's missing.
You could risk making poor business decisions based on having incomplete facts. Before you head into a decision-making meeting, arm yourself with the information you have, but don't forget to ask yourself: What other information may be missing?
Do you have all the information you need to explore past and current trends that may be pertinent to the decision you're considering? This is an example of"white hat" thinking proposed by creativity expert Edward de Bono in his book Six Thinking Hats—a classic decision-making model.
4. Generate multiple options for your business decisions.
Generating multiple options could prevent you from making a hasty decision based on what might appear to be the first, most logical option. In business, or anywhere for that matter, more options may result in more opportunities. Multiple options can also give you a back-up plan.
5. Explore all options simultaneously.
A 2017 study, conducted by Leeds University Business School and Singapore's Nanyang Business School, looked at what happens when people are presented multiple options to choose from. The study involved over 2,700 U.S. participants from Amazon Mechanical Turk and Singapore's Nanyang Business School who participated in seven experiments in which they were asked to choose from multiple options. The multiple options were presented either all at once or one option at a time.
The study concluded that participants were 22 percent more likely to make a better decision when they analyzed all options simultaneously rather than sequentially. Taking inspiration from this research, consider analyzing your various options all together. This may make it easier to do a deeper comparison between the various options.
6. Use a point-counterpoint approach to making business decisions.
Once you have generated multiple options, consider using a formal approach to evaluate each option. Among the dozens of decision-making tools available, you might like to try a simple point-counterpoint approach: For each recommendation to adopt a solution or option, encourage your team to make counterpoints. Then carefully pursue each angle.
When you're dealing with a multi-faceted issue, the point-counterpoint approach may help you conduct a more in-depth analysis and arrive at better business decisions.
7. Apply 2 x 2 thinking.
A popular and straightforward approach to problem-solving is 2 x 2 thinking. By placing variables on an x-y grid, you can quickly visualize conflicting goals in a matrix framework, such as quality versus speed, time versus money or risk versus reward. It can help everyone involved explore the core tensions that might be implicit in two important variables.
As authors Alex Lowy and Phil Hood put it in The Power of the 2 x 2 Matrix, "The 2x2 structure is open and reflective, enabling rapid iterations of organization, visualization and experimentation."
It invites an exploratory attitude, embracing the tension of considering conflicting options. "And," they write, “the process of seeking out and exploiting core tensions ensures that the relevant issues are being addressed."
8. Go solo first.
It may be wise to work through any issues thoroughly on your own first, before you involve others in the business decisions. This could help you avoid one of the common traps in decision-making: the anchoring trap, which refers to our tendency to be influenced by the first information we receive.
In decision-making meetings, opinions you receive may anchor your subsequent opinion and judgement if you haven't gone through your own thinking process first. Conversely, if you're the leader, you may not want to be the first to give your opinions in a decision-making meeting as this could anchor others' thoughts and result in less options being put forward.
9. Take a breather.
We live in accelerated times. When it comes to making business decisions, take a breather to reflect before you make the final decision. The length of time you allot to making a decision should reflect the importance or size of the decision.
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