The Secrets of Effective Decision-Making
By Steve Bannister | October 31, 2006
What is the main characteristic of successful people? It certainly isn't age or experience (Bill Gates had neither when he started). What it comes down to is their masterful ability to make smart, swift decisions day in and day out.
The celebrated motivational guru Tony Robbins is famous for saying that it's in your moments of decisions that your destiny is shaped.Â Every time we make a decision, our pathway to success is either tweaked in a positive or negative direction.
Our fast-paced, technological society demands us to decide now and decide fast or we're history. For three consecutive years, a Teradata Survey has confirmed this crisis in business decision-making. Senior business executives of top US companies report executives making more complex decisions in less time with increasing amounts of data. In addition, 70 percent said that poor decision-making is a serious problem for business, eventually affecting a company's reputation, long-term growth, employee morale, productivity and revenue.
It is becoming quite apparent that businesses, big and small, need to understand how decision-making affects their bottom line.
So, why can't we just adjust to our changing society? Well, just like many of our habitual daily routines, the process of how we decide is also a habit. Our brains love habits because they comfort us and make life easier to navigate.
Therefore, we usually make sudden habitual decisions either to gain some immediate pleasurable state or to avoid an impending painful one. Unfortunately, this way of thinking also relies too much on quick emotional reactions. This can be great if you need to make speedy decisions like avoiding an oncoming car but potentially dangerous for making traditionally slower decisions such as making a large purchase or deciding on the overall fate of your company.
"Rational Decision-Making" has long been thought of as the predominant method to strive for in making smart decisions. This process includes identifying objectives, gathering facts, analyzing the alternatives and mapping the most efficient course of action. Humm â€¦ seems to be a foolproof method except for one thing â€¦ it doesn't always work.
Top CEO's continually talk about relying on their "gut instinct" when it comes to making the really big decisions. Think about it; when have you actually made a decision without taking any of your emotions into account? Decision-making tends to start out as a logical process and then ends up as an emotional choice.
Malcolm Gladwell's recent best-seller Blink, investigates the power of snap decisions. He sites numerous studies in which various parts of the human body instinctively react to decision-making situations before rational thought occurs. In other words, after about two seconds we have already instinctively made a decision before consciously gathering all pertinent data. Now, this may not hold true for every type of decision we make but it does have some merit.
So, what's the best method for making a decision? On the one hand we don't want to get stuck in what is frequently referred to as "paralysis by analysis" - getting lost in the data and never deciding. On the other hand, we don't want to completely disregard valid data, rely solely on our instincts and make a decision too soon. The secrets of effective decision-making lie in the balance between rational and intuitive thought.
The following strategies provide a useful framework for making effective decision.
- Determine the problem and identify the goals to be accomplished by your decision.
- Engage your intuition. Get in touch with your instant feeling on the situation and make note of it.
- Collect data. Don't be too obsessed with researching every piece of available information.
- Identify the actions needed to accomplish your established goals.
- Develop a list of pros and cons for each possible action (each pro and con need not be weighted equally). Monitor your emotional reactions to each option.
- Enlist the opinions of others and then make an intuitive judgment about the best action to perform.
Â It can take anywhere from a few minutes to a few hours or days to make a smart decision. To avoid wallowing around in an indecisive rut, concentrate on making timely decisions sooner rather then later. The emphasis on effective decision-making is finding that perfect balance between efficient use of time, collecting just enough data, and listening to your intuition.