How to Make Good Decisions in Business (Simple Techniques to Master)

Are you feeling overwhelmed as you consider how to make a decision? Our decision making techniques will teach you a better way to evaluate options and put them into action.

The success of your work comes down to a million small decisions. It’s easy to feel the pressure of making these decisions, but it doesn’t have to be stressful. When you apply a standard set of rules to decision making, it takes less brainpower to make a decision

We’ll briefly discuss the techniques of decision making that are easy to put into action. With the decision making approach in this article, you can trust yourself and overcome decision paralysis.

How to Make More Good Decisions (With Less Stress)

If you find good decision making difficult, you aren’t alone. According to a McKinsey study, 57% of senior executives think their decision-making is inefficient. And in 2021, an APA study revealed that more than 35% of participants find it harder to make day-to-day decisions since the pandemic started.

The good news: by following steps, good decision making is the norm. I believe that decision making isn’t magic. With the process steps below, you’ll grow your confidence as a decision maker:

1. Assess the Situation

If you’re facing a decision, it’s important to start by assessing the situation. This means taking a comprehensive look at the situation at hand. To make a good decision, you’ve got to understand the situation at hand.

There’s a concept in computer programming called “rubber ducking.” Many programmers keep a rubber duck on their desk. They use this duck as a muse to explain programming roadblocks. In doing so, solutions often are self-revealing. The reason? Once you understand a problem and can explain it simply, you instantly see the solution.

Apply these four questions as you consider the decision at hand:

1. Why is a decision needed? If you recognize the need for a decision, it’s important to understand what brought you to this moment.
2. Who is affected by this decision? Every decision has an effect on someone. Reviewing who your decision affects will guide your process.
3. What happens if I don’t act? To gauge if a decision is really needed, fast forward to picturing a world where things stay as-is. Then, it’s clear if you should make a decision at all.
4. What data do I have to understand the situation? There’s a balance between trusting data and using intuition. But before you dive into your options, gather the facts that you need to think about your options. Data won’t be your only input, but it helps to understand what’s available to feed your decision.

When you’ve finished your fact finding, you’re ready to move onto the next step.

“…you can’t connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever.” – Steve Jobs

2. Lay Out the Options

If you spend the majority of your time on just one of these steps, make it this one. You need a comprehensive list of options to choose from. The worst possibility is missing out on a potential path. Here’s a rule to follow: the bigger the decision, the more time you should take to create an option set to choose from.

As you form options, it’s natural to recognize that each one has associated costs and benefits. As you document your options, it’s natural that certain ones will shake out as unfeasible and impractical. This is exactly why it helps to invest time in evaluating options.

One option to lay out your options and go through them is with a tool like a pros and cons list. Learn more about creating that in an easy-to-share format with our tutorial below:

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  24 Best Free Pros and Cons PowerPoint Presentation Templates 2022

  

  Sharon Hurley Hall

  02 Jun 2022

One of the best decision making approaches is to welcome input so that you can test your own assumptions. Explain your rationale, then get feedback. Make sure you enter this step with an open mind so that you can truly hear other perspectives.

3. Commit to the Decision (and Resource It Appropriately)

What if the success of your decision isn’t about the choice itself, but the way you implement it?

While implementation isn’t part of the decision-making process, it’s crucial to consider how workable an option is. After all, the success of a decision comes down to that implementation. So, if you know you won’t get support and resources, you should remove an option from consideration.

Here’s an example: putting in a new accounting system is a decision. Hiring a skilled project manager to oversee the project is a tactic you apply to ensure a good decision. It would be a mistake to understaff the project, then assume you made the wrong decision when it failed.

Here’s a big error that many decision-makers commit: they measure their results, then decide if they made the right decision. This misses out on the importance of how we put decisions in place.

Maybe you had the right idea to open a business, you just missed the mark with a marketing plan. Or your new recipe on the menu was perfect, but you picked the wrong supplier for a key ingredient. Both of these could lead you to believe you made the wrong decision, but that overlooks the implementation step.

As you build your muscle as a decision maker, you’ll assess your past successes. Don’t confuse an implementation miss with a bad decision. Drop options that you think are unlikely to get the help needed to succeed.

4. Message the Decision and Revisit When Needed

This step is particularly important if you lead teams or own a company. Many times, the success of a decision comes down to how we communicate it to others.

The fact of the matter is that being a leader means making tough decisions. It won’t always be popular to do what you feel is right.

But if you explain your rationale, you give your organization a chance to come along on the journey. It helps to create a communication plan to share the rationale applied as part of your decision making techniques.

Every decision doesn’t need a full communication plan. But here’s a good general rule: the bigger the decision, the more you should communicate about it. Here are communication tactics to share your decision:

• Host a town hall. An open forum gives you the chance to share your decision. You can even walk through your thoughts while you considered how to make the decision. Leave time for a Q&A at the end of this session to address concerns in a public arena.
• Maintain an open door policy. If you make difficult decisions that impact large groups, chances are that there will be a range of opinions. Sometimes, people just want to be heard. Welcome them into one-on-one sessions with an open door policy. 
• Put it in writing. If a decision is going to make waves, word will travel fast. When that happens, it helps to have your decision documented in writing. That leaves less room for misinterpretation.

One last thing: if you realize that you made the wrong decision, it’s okay to reverse course.

There’s a balancing act here. Sure, it’s important to commit to the decision you made. But great leaders are also willing to backtrack and revisit a decision when they get new information. If it’s abundantly clear that you used the decision making approach, consider an about-face.

Communicate the techniques of your decision making process with these Q&A session tips:

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  7+ Tips for Handling a Q&A Session in 2022

  

  Sharon Hurley Hall

  23 Aug 2020

4 Principles for Good Decision Making

In the previous section, we shared a step-by-step process for decision making. These are the steps that you should follow when evaluating outcomes for possible routes. 

Now, let’s think about principles to apply as techniques of decision making. Think of these as your guideposts to consider while following the steps.

1. Trust Your Gut (But Don’t Confuse It With Anxiety)

If every decision could be condensed to a formula, then a computer could make every decision for us. The reality is that we operate in complex environments with an impossible number of variables.

That means that there are decision points that are impossible to quantify and calculate. When we incorporate our history and emotion as part of a decision, we’re using our intuition. 

“You can’t make decisions based on fear and the possibility of what might happen.” – Michelle Obama

Even the most data-driven leaders trust their intuition. Many times, intuition is the result of years of accumulated decision-making data points. While you may not be able to hone in on the underlying intuition that shapes your decision, it helps to reflect on why you feel the way you do.

2. Keep Stakeholders at the Forefront

Executives and managers are too often removed from the day-to-day front line activities of a business. They spend their days meeting with upper-level managers, who, in turn deal with mid-level managers. These layers are designed to add value.

So what do you do? Go straight to the source. Great leaders manage at a high level but aren’t afraid to dive into the details. Individual contributors ultimately drive an organization’s success. They also have insight to share to aid in decision making. After all, they live and breathe the details every day.

A stakeholder analysis helps you to consider your decisions through the eyes of everyone in your organization. Learn more about stakeholder analysis with the help of this tutorial:

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  How to Do a Stakeholder Analysis & Win Project Support

  

  Andrew Childress

  29 Jan 2022

3. Recognize Decision Fatigue (and Don’t Let It Factor in)

I firmly believe that each of us have a limited number of decisions we can make each day. Every decision made past this point is at risk for errors in thinking and judgment.

One study revealed a surprising effect of decision fatigue. Busy judges granted parole to morning cases seven times as often as afternoon cases. This is decision fatigue brought to life; if you’re tired, you might avoid a decision altogether.

4. Never Assume a Decision Is Actually Needed

What if the best decision you make is the one you don’t make it all? If you lead a team or own the business, you might feel like the pressure is always on to act on a situation. Learning how to make a decision also means learning when not to make a decision.

But often, what’s actually needed is time for a situation to play out. I see leaders rush to action before taking a proper amount of time to assess the situation. This shows a lack of good decision making skills, leading to imperfect outcomes. 

You might be wondering about the difference between indecision and bypassing a decision. Indecision is unnecessary delay of a decision that must be made. In contrast, some decisions need time so that the answer becomes clearer.

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You Just Learned Top Decision Making Techniques

Good decision making is the goal – not perfection. In this article, you learned decision making techniques and skills. These are sure to improve your outcomes. More importantly, these decision making skills will reduce your anxiety and uncertainty.

Remember the simple decision making techniques we covered in this article. Every leader needs a central set of values to measure decisions against. You can test your decisions against these five principles to ensure you’re aligned.

You just learned decision making techniques that build your confidence. Feel free to bookmark and return to this post as you consider how to make a decision in the future. And most importantly, make your decisions with more confidence, starting now.

Editorial Note: This content was originally published in March 2022. We’re sharing it again because our editors have determined that this information is still accurate and relevant.