How to Make good Decisions

Written by: Alan Rodway

How to Make Good Decisions

Decisions we make are far more important than the work we do. The latter gets the job done; the former makes the difference to our future (success). So, making good decisions is critical to success This article looks at some of the key components of good decision making for individuals, teams and organisations.

In General:

  • Too many people suffer from making poor decisions, procrastination or just not making decisions at all. All three cause a failure to reach potential .. that would be a logical statement. A significant part of the cause of this is not assigning adequate importance to decision making. Even one decision, made or not made, can have very significant consequences .. many people will relate to that .. “if only I had …” “if only I hadn’t … “ Think of your past and reflect on where you have benefited or paid a hefty price for poor decisions or for not making them.
  • The time taken to make decisions is important. And it’s not always true to just say ‘take your time’. Some decisions should be taken swiftly (or have to be), whilst others warrant or allow more time. So don’t just ‘take your time’. That can’t be applied to all situations; even some of the most important decisions we take have to be made quickly.
  • Decisions should have a ‘review process’ behind them. Making a decision is one thing; reviewing it and how it was made is another.
  • Gathering accurate, timely and comprehensive information is an obvious necessity for making decisions, including sourcing that information broadly.
  • The old ‘Cost v Benefit Analysis’ (as our Accountants will remind us) is important but it’s not the be-all and end-all. Write the Costs down the left and the Benefits down the right and compare them … the greater wins and should be applied …. correct? Not always. Sometimes there are some less tangible factors at play that could or should sway that decision. If life was so clinical that just applying Cost / Benefit was all we had to do, we’d be home free; it’s often more complex than that.
  • Being clear on the expected benefits of decisions and when they should occur is important. Failure to do this will cloud the (review of the) overall effectiveness decisions made.
  • Distinguish different ‘levels’ of decisions. They can be Critical, Important, Necessary, Unimportant or Social … think through the differences between each of those. Depending on what you label each decision will determine how you go about making the decision.
  • We have been taught about Urgent v Important. The decisions that are urgent / important should be made first. Second, non urgent / important. Third, urgent / unimportant. And disregard non urgent / unimportant.
  • If all decisions had to be proven to be completely ‘right’ we wouldn’t make any, so taking calculated risks is a necessary part of decision making. “Whenever you see a successful organisation … someone in the past made a courageous decision”.
  • Built in “Interference” along the way to making a decision is important; otherwise decisions (especially at the high end of the scale) can be made without due consideration. This is like having appropriate corporate governance in business. So, ensure those interferences are in place, but not unduly (that’s called ‘red tape’).
  • If adequate information cannot be sourced then maybe the decision should not be taken (until it can or at all).
  • Being under time pressure to make decisions can be a good or not so good thing. If it forces urgent, clear thinking then good can come from that; but it it creates panic, emotion and lack of reasoning, then trouble can obviously result. Be aware of the difference when under time pressure … and that may even warrant not doing anything (in the short term, at least).
  • You will probably have heard of “Left Brain / Right Brain”. This grew out of the work of Roger W. Sperry, who was awarded the Nobel Prize in 1981. The left side of the brain is best at Language, Logic, Critical thinking, Numbers and Reasoning. The right side of the brain is best at Emotions, Music, Reading, Images, Intuition and Creativity. A person who is “left-brained” is often said to be more logical, analytical and objective, while a person who is “right-brained” is said to be more intuitive, thoughtful and subjective. The point here is again obvious .. ensure that left brain and right brain thinking is present in making decisions.

Individuals:

  • Avoid making decisions on the run … important decisions need appropriate time, expertise and thought. Whilst the words in that sentence are obvious and so easily said, this is probably the biggest problem and weakness for individual decision making. Because it’s the individual making the decision, there are few checks and balances along the way, and ad hoc decision making can be way too prevalent.
  • It’s very difficult for an individual sometimes to divorce Emotion from Logic … “But I want it”, “But I don’t want to do that”, etc. can be real barriers to good decision making. Sure, we’re all human and we don’t want to dehumanise our lives, but succumbing to emotion too often in making decisions can create serious negative outcomes. Keep the negative emotion out.
  • There is a thing called ‘Gut feel’ and this can be on the opposite side of the playing field to information, analysis and logic. Trusting instincts is not illogical though. We do have senses that we are born with and they can be powerful and often accurate, even if difficult to explain. So, sometimes, going with what your ‘gut’ is telling you is the thing to do.
  • When an individual is not in a good state of mind, it’s hardly a time to make good decisions … put them off til you’re in a better headspace.
  • It can be extremely useful for an individual to have people around them as sounding boards, even mentors. Those people, possibly being less emotionally involved, can sometimes see the forest through the trees. Engage this when unsure.
  • An individual has to recognize and understand the impact that his / her own Fears, Comfort Zones, Emotions (negative & positive), Habits, Self concept / Self esteem, Life’s experience and Upbringing (What we were taught and what we experienced) can have on decision making. Each of these can be significantly negative on our ability to move forward with our decisions, and failure to recognize them will allow them to come into play. Fear should not limit someone’s decision making (caution Yes, fear No); nor past habits, low self esteem, comfort zones, bad experiences, etc.
  • Learning from how others make good decisions is an efficient way to get better at it and reading autobiographies is an enjoyable, productive way to do that.
  • Decisions for an individual must align to their Values, Personal Brand and Goals … critical ! Apart from there being misalignment if this isn’t done, there is little foundation for the individual upon which to make decisions.
  • Understand your Risk Propensity. Are you Cautious or Courageous? Most of us lean more to one than the other … consider that as you make your decisions.
  • The subconscious part of our brain is enormously powerful and should be used in our decision making and planning. This is a quote from “Subconscious Programming for Maximum Results” … “The conscious mind is used to take in input through all five human senses and interprets this input. It then sends these interpretations to the subconscious mind for processing. The subconscious mind then manages these inputs by controlling what they do to the body or by what action the person takes. Your intuition … arises from your subconscious mind. If you want to focus on getting something, all you have to do is start the process by thinking about what you want, then that thought will proceed to your subconscious mind, which in turn will act on your thought … (and) … you will obtain what you thought about. And what is amazing about the subconscious mind is the fact that it is always working”. And this from “The Human Mind” … “The conscious mind only represents a mere 12% of the total mind’s capacity, and can only be concerned with, or hold one single thought at a time …. The subconscious mind takes up the remaining 88% of our brain’s capacity, and could be compared to a massive computer system that stores all of the information regarding our location, situation, feelings etc. … The subconscious mind has no reasoning power, and cannot reject anything that it is told. The subconscious mind has a perfect memory”.

Teams:

  • Teams must create buy-in from their members to decisions before they can be effectively implemented. Therefore, there must be processes in place to allow people to have their say (openly and honestly), debate the issues, and get to a conclusion together. But, never create an expectation of consensus … people don’t have to agree to what’s put in place; they simply have to commit to it … because they have been part of the process in making the decision but got ‘rolled’ this time. Consensus decision making for teams can lead to inertia, so getting teams to accept majority rule is healthy and that must be a genuinely established ground rule from the start.
  • Teams need people who are skilled in soliciting information from everyone and sourcing the best skills from within the group. Many of the high level selection tests for senior roles will test an individual’s ability to get the best from other people … simulated survival exercises are commonly used for this.
  • Leaders can be a poor influence at times, if people just follow them (blindly) and stop thinking objectively. Leaders aren’t always right (General Custer) so they should be constructively challenged. And, “If you always agree with me, I don’t need you”.
  • Personalities should not be allowed to impact decision making … it’s about information, analysis, planning, risk assessment, etc. The strong, loud, popular, etc. should not hold sway in a decision … that’s not a process; it’s a personality game.
  • Teams must create environments where negative peer pressure can and will be resisted. Suffice it to say here that when anyone spots this occurring it must be aired.
  • Avoid “Groupthink” … a concept from Irving Janis in 1972. His research was around why the same team can make both good and bad decisions at different times. It came down to a lack of opposing viewpoints leading to the poor decisions. Alternatives were not fully analyzed and groups did not gather enough information to make an informed decision. Groupthink can occur because of peer pressure, complacency with past good decisions, rationalizing away evidence for an opposing view, moral high ground being used to influence decisions (unduly), the group becoming more uniform in their thinking as they are together longer, censoring of information being allowed to occur, and unanimity appearing to exist in decisions when it’s really the failure of those in disagreement to speak up.
  • Edward de Bono wrote a book called “6 Thinking Hats”. Part of what he contends is that, even the best decision makers can fail to look at issues from all standpoints … . emotional, intuitive, creative or negative. This can lead to inadequate plans being made around decisions, or the wrong decisions being made, or for there to be no back up plan. His” 6 Thinking Hats” approach suggests that all hats should be worn in making decisions (and plans), by an individual and by teams. Each hat is a different thinking style. The White Hat is about Facts: Information and data, What do I know? What do I need to find out? How will I get the information I need? The Red Hat is about Feelings: Intuition, hunches, gut instinct. The Black Hat is about Caution: Difficulties, weaknesses, dangers, spotting the risks. The Yellow Hat is about Benefits: Positives, optimism, why an idea is useful. The Green Hat is about Creativity: Ideas, alternatives, possibilities, solutions (to Black Hat problems). The Blue Hat is about Process and control: What thinking is needed? Organizing the thinking, Planning for action. In group decisions, ensure all hats are worn throughout the process.

Organisations:

  • To make good decisions, there must be a process (there’s that word again) and that process must: Clarify objectives, explores alternatives, encourage ideas to be challenged, examine the risks of alternatives, validate assumptions, source information from the outside, and have a back up plan. Whew, lots in that!
  • What can seem relatively unimportant to us at the time should often be treated way differently; that’s why corporate governance is so necessary. According to the “Economic Times” … “Corporate governance refers to the set of systems, principles and processes by which a company is governed. They provide the guidelines as to how the company can be directed or controlled such that it can fulfil its goals and objectives in a manner that adds to the value of the company and is also beneficial for all stakeholders in the long term. Stakeholders in this case would include everyone ranging from the board of directors, management, shareholders to customers, employees and society. The management of the company hence assumes the role of a trustee for all the others” We can easily substitute ‘company’ for ‘organisation’ and apply the appropriate list of stakeholders accordingly.
  • It’s important that Authority levels are formally in place across the organisation .. who can do what, who can spend what, who can instruct what, etc. And these authorities must be in writing. Without this approach, people really are in no man’s land and confusion or even chaos can prevail.
  • The financial implications of decisions, whilst important, should not be the only consideration. Sometimes, organisations sometimes should expect longer term benefits to what they spend and other times, there might be intangible considerations to be made (that might even outweigh the financial side). It’s important to consider the financial side of decisions but not be completely ruled by them.
  • Important decisions for organisations should include the influence and thinking of some, if not all, of the following: Female & Male, Older & Younger, Experienced & Inexperienced, I.T., Finance, Can Do & ‘Wait A Minute’, Dreamer – Visionary & Pragmatist, Industry & Non Industry, Long term in the organisation & New to the organisation. Without most of these influences in the decision making, you may well miss something important.
  • Brainstorming sessions .. too many organisations don’t have them (or think they do, but they don’t .. they are really planning sessions that were labelled brainstorming). Brainstorming is a “Process for generating creative ideas and solutions through intensive and freewheeling group discussion”. Even those organisations who run genuine brainstorming sessions throw out too many possibilities too quickly or fail to go ahead with those that have merit. Brainstorming is an important ingredient to future success.
  • ‘What If’ analysis should be applied to important decisions … a series of questions to predict some possible complications of the decision about to be made. Asking those questions may still lead to the decision being taken but the organisation’s reactions have already been plotted … or the answers to the ‘What If’ questions may lead to the decision not being taken at all. At the very least, this analysis can lead to contingency plans … a necessity for all good decisions.
  • A good manager or team leader will have plans in place for situations that call for reactive decision-making, recognizing that there will not be time to assess and weigh up the risks, consequences and necessary outcomes when a crisis occurs.
  • A sensible approach to get the best decision makers into an organisation is to test their decision making abilities in various simulations before ‘hiring’ them.
  • For organisations to make the best decisions, the ‘best’ decision makers have to be elevated to positions where they can input to decisions. They may not be the best leaders nor the best managers, but they must be utilised in decision making.
  • Different decisions may require different skills, knowledge and attitudinal aspects, so gather them. That’s why having one Board, one Senior Management group, etc. is somewhat limited … few of those will have all of the necessary capabilities for decision making … have a look at the number of Boards, Senior management groups, etc. that have failed dismally in the past. Gather different groups for different decisions.

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