Ways to Understand and Guide Better Decision Making
by Rob Marchalonis
My education, experience, and faith have taught me that every person has amazing potential for “good”. In general, I think positively about others and believe that most are well-intended. Would you agree with me on this?
It’s a dilemma however, when good people make “bad” decisions, especially when related to business. Bad decisions come in many varieties but, for our purposes here, let’s stick to business decisions that can put your stakeholders, your finances, or your entire business in peril.
As a business owner or leader, how well do you understand and oversee high-stakes decision making? To oversee better decisions, consider the impact, who should be involved, human nature, and recovery options if necessary:
Ahead of any significant decision, determine the relevance, scope, timing, required resources, and desired outputs:
- Who does the decision affect most, considering all stakeholders?
- Owners, investors, employees, customers, suppliers, community, families, etc.
- What critical outcomes of the organization will be most affected?
- Consider stakeholder satisfaction, financial results, productivity, growth, and risk management
- When will the decision have an impact?
- Immediately, next week/month/year, not sure? What milestones can you monitor?
- How will the decision be measured and what are the goals?
- What will indicate success (or failure) and how will it be reported or communicated?
Who should be involved in the decision-making process?
- Decision Maker – who will own the decision and why?
- Overseers – does the decision require oversight by others and, if so, who?
- Advisors – who else with knowledge or experience should you consult with, and what do they recommend or caution?
Beware of personal and psychological shortcomings that are often at the root of bad decisions: (Reference – see also Google Dictionary)
1. Inexperience – little or no time spent in the realm within which decisions are being made.
2. Emotion – letting feelings, emotions, or “gut feel” override more reliable fact-based research, data, and testing.
3. Naivete – inaccurate assumptions, or lack of scrutiny, skepticism, or wisdom, sometimes related to limited exposure or experience.
4. Optimism – relying too much on belief, hope, or trust that everything will be fine, rather than a plan and diligence.
5. Ignorance – lack of adequate knowledge, information, data, research, study, training, or understanding.
6. Fear – reluctance to question, challenge, or take action when ideas or decisions evolve from good, to questionable, to bad.
7. Pride – embarrassment or unwillingness to ask for help, seek assistance, reveal weakness, or admit mistakes.
8. Insecurity – a lack of self-confidence and awareness, which can result in decisions made for appearances or to impress others.
9. Laziness – an unwillingness to do the hard work needed to evaluate, prepare, and execute decisions thoroughly and successfully.
10. Greed – self-serving decisions that can significantly reward some individuals but often at the expense of others.
11. Hubris – excessive confidence or arrogance that overrides appropriate judgment, caution, self-awareness, and humility.
12. Bullying – using position or power to coerce or intimidate others who can’t or won’t speak up or defend their position.
Questions to ask if you need to recover from a bad decision:
• Assessment – what facts and data can you rely on to effectively, efficiently, and regularly evaluate decisions?
• Options – given your assessment, what options or possible next-steps can you identify and prioritize or sequence?
• Decisiveness – what actions will you take, based on fact-based data, ideally determined ahead of time?
• Transparency – who should you include as you evaluate, decide, communicate, reconcile, and move past bad decisions?
• Move On – are you at a point where effort and resources will be better spent moving forward, rather than looking back?
Even small decisions can have a significant negative impact on your business if not adequately considered and supported. With a better understanding of decision-making factors, leaders can significantly reduce bad decisions… even those made by good people.
Rob Marchalonis helps leaders make better leadership, strategy, and process decisions. Learn more at LSP123.com or connect with Rob@LSP123.com ©2020