Without effective decision-making skills and strategies, even the most talented and brilliant can experience crushing disappointments. The ability to make sound decisions is critical in today’s world of quick fixes and superficial solutions. Here are some tips for making sound decisions, regardless of the situation.
Deal: Decision-Making Strategies
1. Conduct proper analysis of the problem. Decision makers often rely on opinion rather than facts. There’s also the problem of self-serving bias—mangers listening to people who share a common viewpoint, while disregarding information that conflicts with their position. In addition, a recent nationwide survey by Harris Interactive concluded that 75 percent of workers made business decisions later determined to be wrong due to faulty data; they trusted their data and did not seek additional sources when making a decision.
2. Utilize decision-making tools routinely. For instance, create a pro/con T-chart to identify an outcomes positives and negatives. After a list has been generated, go back and put a value on each of the items. And, since a decision that addresses the wrong cause won’t solve the problem—and may even create new ones—use the Fishbone Diagram also helps to identify the causes and effects of problems. To construct a fishbone visual analysis diagram, draw a long horizontal line representing the problem. Draw diagonal lines from the horizontal line, and label each line with issues that relate to the problem, such as people, machines, materials and methods. From each diagonal line, draw shorter lines running parallel to the problem line, and identify specific issues affecting the larger problem.
3. Utilize a written, clear set of criteria and then weigh solution alternatives. Identify criteria for a good decision, including what a successful decision would look like, as well as what is required of the solution.
4. Develop a list of possible solutions, including zany, off-the-wall ideas, to help encourage and develop creative problem solving. Then, re-evaluate the solutions for the best alternative or process to solve the problem.
No Deal: Decision-Making Warnings
1. Emotional decisions. Emotions often override our better judgment and ability to make sound decisions. When a situation triggers an emotion, need, or temptation, we will very often make a bad decision.
2. Time-pressure decisions. Time pressure or clock-crunching leads to faulty decision-making and bad choices. Time restraints put added stress on the decision-maker, and often times force him or her to make a judgment based on incomplete analysis.
3. Over-Confidence. Many times people are blind to alternatives and other points of view because of over-confidence bias. These types of individuals are often surprised to learn that their probability judgments are incorrect, and their ability to accurately predict outcomes is unrealistic.
4. Reluctance to ignore invested costs (or sunk-cost bias). The fear of wasting money and time invested in a project often prevents looking at the project objectively. Instead of scraping a project that is failing and starting over, some—due to sunk-cost bias—may invest additional money, time and company resources, hoping the project will deliver.
Making sound decisions involves more than luck and common sense. Utilizing a systematic process of analysis points decision-makers to more informed choices. The important point is not to push one particular method for problem identification and analysis, but rather to encourage the use of decision-making tools for making better decisions.
ABOUT THE AUTHOR
Deanne DeMarco, MA, RCCI, is an award-winning trainer and certified business coach. She partners with business leaders to create enthusiastic corporate cultures where people achieve more and love to work. Deanne is the author of several books including the forthcoming book “Pocket Resource: Coaching Tips” and “Speaking of Success” (January 2007). For more information, visit www.breaking-boundaries.com.