Show me one person who’s never made a bad decision – I dare you.
If you find that person, he’s either dishonest, too young or avoids decision making like the plague.
Bad decisions happen. Fact. It’s been estimated we make tens of thousands of decisions daily (in a study by Daum, 2012), but when you’re business and money are on the line, you simply cannot afford to screw up.
At its core, decision making is a relatively simple process when approached logically. Everyone can make decisions, but not everyone knows how to go about business decision making in order to achieve success. This is something that comes with know-how and experience.
Here we’ll show you how to perfect your business decision making process to make sure you make the right ones…after all, your company is only as good as the accumulation of your decisions.
1. Learn what impacts your company for better decision making in business
Before you get ahead of yourself, you’ll need to explore the hard facts. Going with your gut can only take you so far, you need to base your business decision making on hard evidence. First, you’ll need to collect all of the information regarding what physically impacts your business.
Evidence-based management (EBM), is exactly what it says on the tin. Management based on evidence. You may feel that your vast experience and judgment is on point, but past experiences don’t necessarily apply to the situation at hand. So how can you incorporate data and evidence into your decision making process?
- Utilize performance data and KPIs.
- Challenge your gut! Use your gut to guide you, but cross-reference your feelings with the data to see they match up.
- Check that your data is up-to-date.
- When management suggests a course of action, dig deep – discover what it’s based on and if the evidence is in favor.
2. Have specific goals
You can’t select a new job if you don’t know what job you want, nor would you select a restaurant to eat at if you don’t know what food you fancy. This all boils down to one thing: it’s impossible to make successful decisions if you don’t have a specific end-goal in mind.
And with the new year upon us, it’s the perfect time to set your goals and make detailed financial projections for your business. Once you have your goals, you’ll be able to make better decisions from everything from your marketing budget to whether or not your need business financing (use this guide to business financing for more info).
3. You’re not alone – use your team
If you’ve done a good job of putting together a strong management force, then you’re already halfway there. Now you just need to learn to successfully utilize them. Management needs to be aligned with your vision for the company and what is to be expected of them. As soon as everyone’s on the same page, the business decision making process will become far easier.
If you were willing to hire someone onto your team, more importantly, someone in management, then you should also be willing to listen and take on board his or her opinion – even if said opinion disagrees with yours. In fact, I would be very worried if I had a manager who blindly agreed with everything and anything you said. You want your management members to provide another voice, another view, and help you think in a different way. CEO does not equal God after all.
Take on board your team’s opinions, and use them combined with the raw data to help you come to your own.
Tip: Use these small business management tips to help better manage your team and increase your decision making in business management skills.
4. Learn to prioritize
Ofer Ariel, Chief Product Officer (CPO) of Lending Express knows what it’s like to have hundreds of tasks, and has had years of experience in perfecting his decision making process to drive results. When it comes to providing customers with optimal business loans, you can’t mess around.
His advice is this:
“You need to look at your tasks in terms of the minimum and maximum impact. Ask yourself what’s the maximum impact that you can get from each task.“ In other words, which task will lead you to your goal quicker? He continued, “organize your tasks on a spreadsheet or a platform like Monday.com (that’s what we use here) and add a column for the impact and effort needed. Sort the tasks so that you can start with the missions with the smallest effort and most impact. You’ll always have small tasks with low immediate impact, I suggest putting these kinds of tasks to the side, and choose an allocated time slot to either go over them, or if they’ve been lingering too long, consider whether it’s worth completing – maybe it’s time to hit ‘archive’ [delete].”
5. Learn from mistakes
We’re only human, we make mistakes and decision making in business is no walk in the park. If you made a poor business decision, learn from it. Look back at what and how it happened and then use your new found knowledge to make better decisions in the future.
Bonus – always have a backup plan! If plan A didn’t work, always have a plan B. A good leader will always be thinking ahead and what they’ll do if plan A didn’t give the expected results.