There is no perfect formula for making informed business decisions. No one gets it right every time. What is important is that you don’t reinvent the wheel when it comes to making these important decisions. According to industry leaders, there are few key points that can help you develop and implement decision-making plans with a bit more confidence.
When making decisions, you need to validate the driving force. Perform a situation analysis to determine the motivation. Is this a business strategy that needs to be addressed immediately? What happens if no decision in made? Identify who will be directly and indirectly impacted. If the decision does need to be made, begin collecting data, research, supporting information, and analytics. Remember, there are no private decisions. Think carefully about the details of this decision and the impacts it will have as it will become public knowledge. Will your employees and shareholders agree this was a decision that should have been made?
Before you even begin your endeavor, understand how your competition is conducting business. Knowing your competition will give you the leading edge in being one step ahead. In addition, do your homework. With the advent of electronic information, before your endeavor you should have gathered all the facts and information that impacts your business. This is essential because this information could make or break the success of your business. When engaged in the information-gathering process, base your plan on facts rather than opinions or biases that may influence the decision-making process.
Once you have done your homework, focus on the results you want to accomplish. Consider the possible outcomes of your tentative plan. There needs to be consideration of both long-term and short-term goals regarding every aspect of your business. Details such as tracking the company’s financial statements are important as well as staying abreast of employee morale. Determine the direction or path your company would like to head toward is key in setting and maintaining direction. Establish business goals and create mission statements. This will be the compass to ensure your business is staying on course.
Is your decision due to the birth of a great idea? Just like sitting on a jury, you must remove all reasonable doubt before you take the leap. First impressions have a great impact on all of us. This is true when you meet someone and when you first come up with a great business idea. While the idea may seem wonderful at first, you need to remain objective. Knee jerk reactions may influence your ability to remain objective. In order to counteract this effect, be sure to weigh the pros and cons. It is vitally important that this list is created before the inception of the plan. You should evaluate while you are not under the pressure of meeting deadlines. Since nothing is perfect, your job is to uncover hidden details. Listing and dealing with cons at the beginning will help you avoid pitfalls at a later date. This is especially important when there is a unanimous decision by everyone involved to go ahead with a specific business strategy. Insist on uncovering all the details, positive and negative. This will go a long way in insuring the program’s success.
The last filter you should consider before business decision making is plain and simple. Is it the right thing to do? It doesn’t take a lot of courage to maintain a stance on a decision with which everyone agrees. In contrast, someone who can stand up for a decision even when faced with controversy is a true leader. In some instances, compromises need to be made in order to yield benefits. However, in doing so, your integrity should never be compromised. It is acceptable to make an unpopular decision if you truly feel there is long-term benefit involved. It is never acceptable to make a decision that conflicts with your system of values or one that compromises your character.
The current business landscape is a complex environment. There are high levels of expectations regarding performance and the speed in which decisions should be made. Often, this pressure leads to disaster because decisions are made in haste. If a decision is made using a sound methodology, the chance for making a bad decision will be minimized. After validating your sources, knowing your competition, doing your business research, and using outside sources to determine if this decision should in fact be made, you can proceed with confidence.
Follow these steps:
• Each decision you make has an impact on taking advantage of future opportunities. Don’t make a decision in isolation. If an opportunity seems too good to pass up, you need to decide how it will affect other projects. You need to analyze the risks for having to put a project on hold and decide how you will prioritize your projects. How will you decide which projects get moved to the forefront and which ones get put on hold? Look at the bottom line. Will the benefits from this decision justify the costs? Make a plan if the projects costs are exceed the project does not meet the projections.
• Don’t expect perfection. It is impossible to expect every aspect of business decision making to be 100% complete. At some point, you need to build a foundation and then add a few floors as needed. Most leaders would agree that delivering a report early 80% complete is preferable to delivering that report 100% complete, late.
• Strive for independent collaboration. People who are good decision makers tend to spread resources around in order to have all possible aspects covered. Independent thinking from individuals knowledgeable in his or her subject area allows important questions to be developed and answered. Waiting for a response from a committee takes time. Go with information developed from independent and credible sources. Make decision quickly on business opportunities.
• Not all problems can be solved. You can make a decision about a problem, but that doesn’t mean the problem is solved. Sometimes, relying on your intuition after looking at all the facts is your best bet. For example, you can analyze a group of vendors based on data and pricing. But what if your gut is conflicting with that data? Regardless of the analysis, often going with what feels like the right choice is the best course of action.
• Give your brain a break. Have you ever had the name of a famous actor elude you and then the name pops into your brain when you stop thinking about it? The same occurs when you are you faced with a difficult decision. Often, by turning off your brain off for a bit or switching gears toward a new direction, the information you need will be retrieved. Answers will come to you when you least expect it. Don’t force issues and let yourself get worked up when the answers don’t come to you immediately.
• Come to grip with your mistakes. If you make a mistake, admit it. You will gain more respect by admitting you made a mistake and correcting it, than hiding it. Failure is dependent on how a problem is perceived. If you halt a mistake, learn why it happened and then steer a course in a new direction, the mistake can be turned into a learning experience. Seek other viewpoints and increase your understanding of the situation. Then, add the problem solving experience to your skill set. It can be used as a strength in the future.
• Execution of your timeline. Both internal and external forces shape a timeline. The feasibility of a timeline is dependent on the competency of your team and is an internal force. An external force is an influence that drives or impacts the deadline that you have no control over, such as the market or the economy. Since you have no control over the external forces, it is best to reinforce those forces of which you do have control. Identify your resources. List your primary resources as well as your secondary resources. You need to develop contingency plans for when you come to a roadblock when your primary resources are not productive. This will minimize down time when you are faced with an obstacle that is inhibiting the completion of your timeline.
It may be an old piece of advice, but it still holds true. If you don’t succeed, you need to try again. Every effort you make will be dependent on your resources. Take the time and energy to develop good resources for business opportunities. Each decision you make and effort you produce will be amplified as a result of having quality resources. This will build your confidence when it comes to making decisions. There is nothing worse than feeling paralyzed because you don’t feel prepared when a problem hits. You can minimize your next major issue by having confidence in your resources. At least you will have the comfort of know that the decision you did make was based on sound resources.
Unfortunately, decisions will be made that have downsides. Not all decisions you make will be the best choices. The big companies protect their stock portfolios when they set up a new business. You should follow their lead. In reality, many large companies secure their business partners by establishing an inventive way to counteract an unforeseen downside. Being proactive in finding alternatives if the market changes or you encounter new challenges is a form of self-preservation.
Another important piece of advice is regarding communication. Don’t exist in a bubble. It is good business practice to talk to your colleagues and employees to gain insight on how they feel you are managing your business. For instance, you need to make a decision on your company’s marketing campaign. Consult your business advisors and others in management positions about their opinions. Get their thoughts on who would be best managing your campaign. It is important to let others in your company know their thoughts and insights are valued. Decision making should be a collaborative effort and employee’s opinions should be acknowledged and valued.
Even the most successful business leaders understand the importance of seeking counsel. One word of caution is to be mindful of where you get your counsel and how much you should actually seek. More is not necessarily good. Getting input from the wrong sources will not add value to the decision making process. There need to be filters set in place for monitoring the amount of volume, even from good sources. Too much volume can confuse matters. This can cause a delay in the ability to make decisions as you have to sort through the sea of information. Gathering input from sources that can’t make valuable contributions should be avoided at the onset.
With the advent of social media, one should capitalize on its power. A business should take the time and effort to join local business and support groups. Networking with other professionals in the field goes a long way in disseminating information about the business. Social media is a free resource that can promote your business and bring recognition to your company and its goals.
Organization is the key to staying relaxed. In a hectic, fast paced environment, taking a few deep breaths and taking breaks is important. Listening to the radio or taking a 10-minute walk can de-stress you and help you gain a fresh perspective on things. You are not a super hero. Don’t try to accomplish everything at once. When things get too hectic, do yourself a favor and take a break. Whether your concern is employees, gaining a fresh perspective on things, or coming up with a mind-blowing presentation, you will feel better if you take the time to give yourself a break.
Lastly, hold your course. It isn’t easy running a successful business. You can increase your success rate in the decision making process. Do your research. Discover everything you can about your area of business. Establish your resources and create secondary resources. Set goals for your business and listen to your customer needs. Organize your finances and expenses. Make customer and employee satisfaction a priority. If you make mistakes, learn from them. Always redefine and adjust your goals based on informed decisions. Following these guidelines will not always ensure the best decisions will always be made, but they will provide a solid foundation and provide the best chance for sound decision making.