Decision-making is a key responsibility of any management role. Though your instincts will always serve you well in a business environment, you should be wary of acting impulsively. In fact, if you aspire to a senior position within any organization, it is imperative that you understand how to solve problems using careful analysis.
The business decision-making process can be divided into seven distinct phases. As you read on, you’ll notice that actually making a decision is one of the last things you end up doing. This is because you first need a lot of data to identify and figure out how to solve the problem you’re facing.
Let’s take a look at the value of a step-by-step decision-making process by examining each of these seven phases in more detail.
1. Identify the problem
Before you can make a decision, you need to identify and understand the issue you are trying to solve or the situation you want to change. It can’t be too broad in the first instance; otherwise, you risk losing sight of your initial objectives. To focus your investigation, ask yourself: What are you hoping to achieve by making this change? What difference will it make to your brand/organization?
Business coach David Finkel has identified 6 Questions You Must Ask Yourself Before Any Big Business Decision, including:
- Is this enough?
- When does it need to be done?
- What information are you missing?
- Do you absolutely need that information?
2. Gather relevant information
You can’t make an effective business decision without knowing all the facts. Extensive research is required to discover what’s worked for the company before, and what strategies your competitors currently employ.
Be careful, though, because too many stats can confuse the problem. You’ll need to judge what information is actually relevant and useful and concentrate on that. The larger decision-making process is made up of lots of smaller decisions, including how you’re going to source and sort your data.
3. Come up with solutions
Based on the data you have gathered, you should now be able to generate several different strategies aimed at tackling the problem you identified in #1. It is important for you to consult with your team and discuss a range of ideas at this stage to be sure you have considered the situation from every angle. This gives you the best chance of finding a solution that will help you achieve all of your business objectives.
For example, if you are trying to boost your engagements on social media, you might want to look at the pros and cons of targeted ads (paid) vs growing your following organically.
4. Evaluate the different alternatives
According to Phil Higson and Dr. Anthony Sturgess, founders of The Happy Manager, you need to evaluate all potential solutions according to the following three criteria:
- Feasibility – is this strategy easy to implement?
- Acceptability – will this strategy be well-received by employees/customers?
- Desirability – is this what your employees/customers want? What have they been asking for?
It is essential to weigh up the pros and cons, the potential risks and rewards, of each solution carefully in order to identify which alternative will best achieve your objectives.
5. Make your decision
So, you’ve identified a problem and come up with a couple of solutions you could employ to fix it. Now comes the time for you to actually make your decision. No pressure, then! See how much consideration has gone into the process so far, and try to put that into practice yourself.
After analyzing all the data at your disposal and evaluating the various risks and rewards involved, you are in a good position to make an informed decision based upon business needs and the likelihood of success.
6. Take action
Develop and put actionable plans in place to roll out the agreed-upon changes. For this phase of the decision-making process to be a success, you may need to collaborate with external stakeholders as well as members of your team. Make sure everyone is on board and knows what they’re supposed to be doing.
Effectively identify and allocate resources, delegate tasks, and make yourself available to answer any questions as they arise; it’s not called a process for no reason, and there may be a few small teething problems in the beginning.
For this reason, your plan should also set out a date and method for reviewing the impact of your decision or strategy.
7. Review your strategy
Some managers may be of the opinion that once a decision has been made and implemented, the job is done, and it’s time to move on. However, the review stage is crucial to effective decision-making because it allows you to assess what worked and what you need to do differently next time to improve the process. Ask yourself:
- Did you solve the problem?
- Did you meet your goals?
- What went well?
- How could you have improved upon the decision-making process?
- What are you now able to do that you couldn’t before you implemented this decision?
If your decision did not have the desired effect upon your business or brand performance, consider returning to some of the previous steps you took. Reevaluating the strategies you discarded in the first instance may lead to making a better decision the second time around.
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