How to Make Effective Business Decisions
| 21 | Jul 2010 |
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Effective decision-making is commonly understood to be an essential skill for business leaders. Whether it’s a learned skill or a natural talent, making good decisions can put a business owner on the path toward long-term success.
But how does it work? When people are in the throes of battle and a number of options are spread out before them, how is it that the winners know the winning path ?
The anatomy of a decision
Most often, whether one realizes it or not, decision-makers take myriad factors into consideration before coming to a conclusion.
Whether the decision-making skill is an innate gut feeling or is learned over the course of years, the bottom line is that being a more effective decision-maker requires practice.
Gayle Abbott, the president of Strategic Alignment Partners, a Herndon, Va.-based human resources consulting firm, recommends a four-point strategy to deploy whenever you must act:
- Identify the problem,
- Analyze the possible solutions
- Evaluate the possibilities that are likely to bring you closer to your goal
- Make the decision
Abbott told BusinessNewsDaily that following this decision-making process does not always come naturally. Those who’ve mastered this approach usually have years of practice under their belts, she said.
“When you see a successful person , you do not see what happened behind the scenes,” Abbott said. “All of them have made mistakes on their way up, but they move on. They have struggled through failures — bad decisions — before finding a solution.”
She said it is important to listen to your inner general.
“The most powerful leaders listen to their intuition and then they gather facts, evidence, and data to support or throw away that gut feeling,” she said.
That last part may be easier said than done, as anyone who has been forced to make a tough choice can tell you.
Knowing when to pull the trigger
Even if you engage in a rational decision making process, sometimes, you have to just wing it.
“Sometimes you’ve got to say, ‘I’ve now gathered all of this information and it is time to act,’” Abbott said. “The most successful people don’t have to have all the information. They are willing to take risks. A big part of it is knowing when to be decisive.”
Martin Lehman, a NY-based veteran of the retail industry and now a SCORE (Service Corps of Retired Executives) advisor, told BusinessNewsDaily that good decisions require a person to bring a number of characteristics to bear--experience, instinct, intelligence, alertness to changes in the business environment, good listening skills and a willingness to react when necessary.
There are many things that influence how an individual makes decisions. They include emotions, perceived personal and professional risks and rewards, preparation through experience or education, deadlines, stress and a host of others. It is important to minimize and mitigate the irrational and embrace the rational. Above all else, Abbott said, keep your eyes on the prize.
“Be clear on the ultimate objective,” she said. “When faced with choices or options, you need to choose the one that will most quickly achieve it. Know your strengths and weaknesses to stay out of trouble.”