How to make effective decisions

How to make effective decisions: 8 steps

Our life is shaped by the series of decisions that we make in different situations. Our perception of ourselves and the world plays a very important role in the kind of decisions we make. In this article we will find out the tools that are useful in making effective decisions. 

By Suman Kher

 

Components useful in the decision making process are as follows:

Data: The first important thing to do when we face a decision making situation is to gather information. Ask questions till you get to the root of the problem. Understand trends and extrapolate from data available to understand the situation better. If there are any gaps, research a bit and fill them to complete the picture. Many times, data is the sole basis on which decisions are made; for instance, in scientific research or sociological surveys about population.

Intuition: This is a valuable part of every decision making process. The gut-feel that something will work despite the odds against it can often defeat neatly arranged information. Malcolm Gladwell, in his best-seller, Blink, talks about ‘thin-slicing’. Gladwell cites examples from diverse fields to show how the human mind can make decisions based on a thin slice of information that the subconscious mind processes even before the conscious mind can realise it; for instance, taking on a fresher in a responsible role instead of an experienced person, because of a hunch.

Analysis: Weigh the alternatives, and look at the positive consequences of your options. Also consider all that can go wrong with your choices. Having a balanced view of the pros and cons of possible outcomes will help reach a logical decision ensuring lesser errors.

Creativity: Our creativity can bring in a lot more options than are obvious at first. So, think of more possible creative solutions that you can develop for the problem. Thinking out of the box can be refreshing to our thought process.

Resources: It is very important to consider the resources available to follow on the decision made. You can think out of the box and generate unique ideas, but if they can’t be put to practise due to lack of skills or support, the exercise is futile. Resources can be individual skill or sufficient funds to take up a project.

Involvement: Seek the help of others who might be able to add value to your decision making. It can be members of your team in the office or your family at home or your friends. They can help by providing more useful data or can add fresh perspective to the situation. A bit of objectivity can be good to truly evaluate the worth of your decisions.

Risks: Be prepared to take on challenges even if they involve risks, as long as the facts are right and your intuition goes along. Warren Buffet wouldn’t have been the richest investor if he aimed at making every decision risk-proof. His decisions are based on his sound knowledge of markets and the well-founded experience. Risks cannot be wished away but contingency plans can be made to deal with them. The risk you take should be proportional to the gain you expect from it.

Related Posts:  All you need to know about GMAT preparation

Commitment: Once you analyse the facts thoroughly and make a decision, stay committed to it. Changing the decision often robs the whole process of its seriousness. Remember not to get carried away by all the opinions that come to you in the process. You need to keep your head above all that and trust your judgement alone.

Armed with all the knowledge, try out the following to polish your decision making skills.

1.  Every time you come across a problem, try to gather information by any of the techniques you learnt today. You can begin by a simple pros and cons chart and see how well you are able to put together the options available.

2.  Whenever possible, involve your friends in group brainstorming. It could be a repeat run of an analysis you have already done on your own. Notice the points they come up with and how they are different from yours.

3.  Find business problems from online sources and practise with them. Gather sufficient facts and zero in on alternatives available. Then you can go on to analyse each of them to see which ones work. The faster you are able to reach a feasible decision, the better you are getting at it.

Suman Kher is a freelance content writer and a trainer in communication.

 

(First appeared in Advanc’edge MBA Magazine.)