As a business owner, the quality of your decision-making determines your success or failure. By decisions, we don’t mean what suit you’re going to wear or whether to go to the gym or not. Those are choices. In a decision, the issue you’re facing is unconventional. This means there’s going to be some uncertainty, particularly when the stakes are high.
In today’s business environment, decision-making is becoming more complex. There are many more variables to consider, which makes dealing with a new situation even more difficult. But there are ways of honing our decision-making skills to simplify the process.
Knowing your objectives is one of the most important, but often overlooked, ways to sharpen your skills. The more you are aware of your core values and objectives, the easier your decision-making will be.
Attachment to one outcome will limit your effectiveness as a decision-maker. The problem-solving process should unearth many viable alternatives. Your job is to decide which solution is best in light of the facts. If you’ve pre-selected an outcome, without considering other options, you run the risk of making the wrong decision. This can be costly in the business world.
Involving those people affected by the decision helps clarify objectives and eliminates some alternatives right away, simplifying your choices. Further, if the wrong person is making the decision, you can be assured that the potential for failure is much higher. Decisions are always best when made by the people closest to where the decision will be implemented.
Gathering too much information is a common problem in decision-making. Generally, only 20% of all decisions need to be put off to gather more information. How do your know when your have enough information? Ask yourself this simple question, “how much impact will additional information have on my decision?” Once you’ve answered that, consider the costs of gathering the additional information and add the costs (if any) associated with delay.
So what’s the solution to poor decision making? Practice. Start with small decisions, strengthening your skills, and move up to the bigger decisions. As your skill level increases, so will your success rate. And always remember, it’s your choice.
This article was written by Gary Field, CPA at Numerico, PC. Click here to view Numerico’s website.
