It became fodder for late-night talk show hosts in 2006 when then-President George W. Bush uttered the words, “I’m the decider.” But being the decider is no laughing matter. As the owner of a small business, you are the decider. You make numerous decisions — both large and small — every day.
Decision making, like any other skill, can be improved. Of course, not all decisions are of monumental importance. Some are best arrived at using a specific process, while others, like what to have for lunch, more or less just happen. But sometimes people get lazy and leave important decisions up to chance, treating the choice between vendors like the choice between salami and tuna. Using the “eeny-meeny-miney-moe” method might save time but it can harm a company in the long run.
STEPS TOWARD GOOD DECISIONS
The first step toward better decision making is becoming mindful of the process. Avoid on-the-spot decisions by taking the time to ask yourself the following questions:
• What needs to be decided? If there is not more than one option, there is no decision to be made.
• When does the decision need to be made? Set a deadline and stick to it. Don’t put off or prolong decision making just because it’s difficult.
• How is this decision going to affect you and your family? Would it affect your health? Family income? Retirement? Family time?
• How is this decision going to affect employees and customers? Does it mean more overtime? Cutting staff? Better service? Higher prices?
• How is this decision going to affect cash flow? Will you be able to pay your bills on time? Meet payroll?
• How is this decision going to affect your tax situation? Does this decision give you a needed deduction or put you in a higher tax bracket?
DON’T MAKE IT PERSONAL
When faced with an important decision, don’t go it alone. If you can, seek input from those who will be affected by the decision. Making decisions does not mean you are judging people. You are choosing between alternatives for the good of the company. For example, if keeping an extra employee on staff threatens the financial soundness of the entire company, letting that person go does not mean you think they are a bad employee. Choosing to buy a product from one vendor over another doesn’t mean you think the sales representative from the losing company is inept. It just means one product meets your current needs more effectively. Always base decisions on principle, not appearances.
TAKE NOTES
One tried-and-true decision-making method is putting pen to paper listing the pros and cons of each choice. This creates a record of how you arrived at a decision if you or anyone else questions it.
Write down the question and then brainstorm as many possible answers as you can. If you can only think of a few options, brainstorm about where to find more information about them. This may lead to additional choices you can add to the list.
Say, for example, your accountant is retiring and you are trying to decide on a replacement. Information sources include the Yellow Pages, the Internet, industry peers, professional organizations, newspapers, friends, relatives, etc. After you’ve created a list of choices, those same sources can help you find more specific information about each one. Write down all relevant information, determining if each piece of information is either a “pro” or a “con” based on your personal values.
How do personal values come into play? If industry-specific experience is something you value in an accountant, a candidate for the job whose sole experience is crunching numbers for grocery stores would not meet that value.
When you’ve armed yourself with numerous choices, listed information about each one and assigned pros and cons, begin crossing off alternatives that will not work for you.
It helps to visualize the outcomes of each choice on your list and write out your impressions. You might be able to visualize Bob Smith as your accountant because he has experience working for similar businesses, but when you visualize yourself having to drive an hour to meet with him you might cross him off the list because you value your time.
Review and decide which remaining alternatives feel most comfortable. If you feel you can live with both an alternative and the possible outcomes you envisioned, this is the wise decision.
MOVE ON
If you thought the decision through, took your time and discarded all other alternatives, then stop worrying — you should have nothing to regret. Once you have made a decision, get moving on it. Second-guessing yourself will only cause grief.
That doesn’t mean you shouldn’t review the decision down the road to determine if the outcomes are what you expected or if you need to make some adjustments. If the decision did not come out the way you planned, go through the complete decision-making process again. Did you have enough information? What values affected the decision? Were they really your values or did someone influence you?
Tracking the outcome of major decisions will help you make better decisions in the future. But never make decisions based only on past history. Decisions are made at a certain time because they were the right ones at that time. Circumstances change.
DECISION-MAKING MISTAKES
While the path above will lead you to better decisions, there are also roads you shouldn’t go down:
Don’t give too much weight to the opinions of people you consider experts. While knowledgeable, experts do have biases and prejudices. By seeking information from many different sources, you will get better information than if you focus all of your energy on one source. An expert might have a lot of knowledge but not share your values, problems or personal experiences.
Don’t give in to the natural tendency to ignore or underestimate input from people who are different than you. A customer, an employee or a vendor may be a different race, sex, income or social standing than you. That gives them a different, but valuable, perspective. If you find yourself discounting information you receive, ask yourself why.
Don’t just hear what you want to hear. When someone tries to tell us something we do not want to hear, we sometimes choose to ignore it. Be aware of your own prejudices and stay open to all input.
Don’t ignore intuition. Trust your instincts until you can complete enough research to prove them right or wrong. Once you have the facts, gut reaction becomes sound decision.
THE BOTTOM LINE
Improving decision-making skills can increase your confidence as a manager or business owner. You will feel more in control of your destiny. Plus, once you become more aware of how you make decisions, you will better understand how customers make decisions. You can position yourself as an expert and inform them how their buying decisions will affect their organization. That makes you the decider and the decidee!
