Friday, June 5, 2009

Decision Making - The Bridge Between Failure & Success!

Decision making is the foundation of every management and business activity. It goes with out saying better management decision making and problem solving can greatly improve an organization's profits and goals. But the studies show that Entrepreneurs and Managers do not achieve more than 50% correct results in their decision making and problem solving.

In today’s complex business scenario, decision making is one of leadership’s greatest challenge. In fact, decision-making ability differentiates between a poor and a good leader. Many bad decisions are made simply because leaders move through the decision-making process too hastily, basing conclusions on emotions, bad information or impulses.

Before we talk more about it, let me share with you a funny story on decision making which tells us how good our Managers are when it comes to decision making!

The story is about a manager of a large company who got a heart attack, and the doctor advised him to go for few weeks to a farm to relax. The guy went to a farm, and after a couple of days he was very bored, so he asked the farmer to give him some job to do.

The farmer told him to clean the shit of the cows. The farmer thought that to somebody coming from the city, working the whole life sitting in an office, it will take over a week to finish the job, but for his surprise the manager finished the job in less than one day.

The next day the farmer gave to the manager a more difficult job: to cut the heads of 500 chickens. The farmer was sure that the manager will not be able to do the job, but at the end of the day the job was done.

The next morning, as most of the jobs in the farm were done, the farmer asked the manager to divide a bag of potatoes in two boxes: one box with small potatoes, and one box with big potatoes.

At the end of the day the farmer saw that the manager was sitting in front of the potatoes bag, but the two boxes were empty. The farmer asked the manager: "How is that you made such difficult jobs during the first days, and now you cannot do this simple job?"

The manager answered: "Listen, all my life I'm cutting heads and dealing with shit, but now you ask me to make decisions!!! "

Jokes apart, this could be true with many of our Entrepreneurs & Managers - when decision making is too complex or the interests at stake are too important, quite often we do not know or are not sure what to decide. As an Entrepreneur or Manager, sometimes we know everything we can know. Sometimes we know only somethings, but not everything. And sometimes we know absolutely nothing - but we still have to decide!

A "good" decision-making starts with a purposeful, consecutive, strategic-thinking process. A correct decision makes our life better and gives us some control over life. On the other side, a bad decision may force us to make another one which could be even worse! Like the old saying, if the first button of one's coat is wrongly buttoned, all the rest will be crooked.

Good decision making invites lot of thinking and thinking is the ultimate human resource. The main difficulty of thinking is confusion. We try to do too much at once. Emotions, information, logic, hope and creativity all crowd in on us. It is like juggling with too many balls.

We may have great plans that have been studied and worked out in great details, but if we do not take decision to act on it, they can be of no use to us except to be sorry reminders of wasted time, lost opportunities and unrealized goals.

So a good decision is not an accident, it is always the result of high intention, sincere effort, intelligent direction, skillful execution and represents the wise choice of many alternatives. A significant part of decision making skills is in knowing and practicing good decision making techniques. With that note, let me share with you some simple decision making steps as under:

1) Assign priorities : All the things that need to be decided on are not equal in importance. As we do with time management where we prioritize, rank the importance of the decisions we have to make. At least by setting priorities, we'll be going in a direction. If it turns out to be the wrong direction, we can always make a course correction.

2) Set a time frame : Decision making boils down to the gut thing. And faster is better. Be 80 percent right and first rather than 100 percent correct and last. By setting a time, we have an idea on the deadline to take the decision.

3) Gather and review up-to-date, cold, hard facts : Collect as many facts as possible, but not too many. Organize them. Based on the priority, we can either wait until it's perfect and we have all information possible or we just have to go with our judgment.

4) Paint a scenario of desired outcome : What do we ideally want? If we haven't thought about it, how will we know whether we get it?

5) Weigh the pluses against the minuses in getting where we want to be : There will be trade offs and compromises. Weigh the costs and the effects.

6) Explore the ramifications for all involved : Who will be effected? Understand the impact of decisions we make on people concerned.

7) Keep emotions out of it : Don't let our emotions to effect our decisions as much as possible.

8) Use our wisdom, have courage, go with our gut instinct and decide : Procrastination in the name of reducing risk actually increases risk. If the analytical approach ends up different from our instinct, we really should stop and take the time to figure out why the difference exists. We'll probably end up going with instinct but at least we considered the analytical approach.

9) Put the decision into action : Transfer our decision into specific plan of action steps. Execute our plan.

10) Evaluate the outcome of our decision and steps of action : What lessons can be learned? This is an important step for further development of our decision making skills and judgment.

Many a times, decision making may not be as simple as we think and it can be hard when it involves some conflicts or dissatisfaction. The challenge is to pick one solution where the positive outcome can outweigh possible losses. Avoiding decisions often seems easier. But remember, making our own decisions and accepting the consequences is the only way to stay in control of our life, business and its success.

Like Jim Rohn says, " It doesn't matter which side of the fence we get off on sometimes. What matters most is getting off. We cannot make progress without making decisions ".

Ready to make a decision ? Do it – success is just across the bridge. Trust me it will be a great decision !


Reference : How To Act Like A CEO by D.A Benton