If making decisions is vital for business success it begs the question how do you increase the chances of success? How can you make good decisions under pressure?
The starting point has to be a recognition that no-one is perfect, we all make decisions that do not work out and it is important to accept that running a business means that you must make decisions all the time, some are very good, some are mistakes and most decisions (from my experience) seem to work out in the end.
You decrease your stress levels when you accept the fact that in a dynamic world, with imperfect information you will occasionally mess things up.
Another way to reduce the pressure is to make decisions quickly. This is not to suggest that you do so rashly or without thinking but most of the time it is better just to make a decision on the spot when you need to do it. This will avoid situations where you put-off making a decision and this mounts up as another decision comes along.
This increasing pressure can be reduced simply by just doing what you feel is right at the moment. If it does not work out then feel confident in reversing your decision. In this fast-moving environment, making decisions quickly, ascertaining the results and then learning from your decisions both good and bad is the ideal way to cope.
There are also some practical tools you can use to improve the number of successful decisions you make. I have listed three of these below:
The two by two minute decision
When faced with a decision you literally give yourself two minutes to develop as many different options as you can imagine. Then you spend another two minutes deciding which option has the most appeal. In this way you can make most day-to-day business decisions in four minutes. This is an ideal for you to harness your intuition and not to over-think your decision.
What would my competitor hate me to do?
This is an invaluable question to guide your decision-making. When you are unsure as to which option to follow ask yourself, what would my competitor hate me to do? This question often gives clarifies what option you should adopt. If a decision benefits your business at the expense of a key competitor then you know you are on the right track.
Develop a risk and return score for each option
Another very quick and practical way to make decisions is to develop a risk and return profile for each potential option. Start the process by quickly scoring each decision option on a score from 1 (no risk) to 10 (high risk). Just rely on your gut-feel to make this ranking. Then re-do this scoring for each option but on the basis of potential returns from 1 (low return) to tem high return). The ideal option would be one that is relatively low risk with a high return.
For example, let’s imagine you were faced with a decision of whether to hire a new person. Three possible decision options could be to employ someone full-time, part-time or delay this decision until another time. Using this scoring system you might score the full-time person as high on risk and return, the part-time person as relatively moderate in risk and return and no additional staff as a safe option but low in return. This might suggest the part-time is the better option.
Remember there is no right or wrong in the scores—this tool forces you to make your judgment explicit which often helps your decision making under pressure.
Successful decision-making is a skill that can be improved with the right practice, tools and attitude. In these difficult times it might just be the most important skill that can keep your head above water.For more expert tips on smart small business, tune into KBB, 11am Sunday on Channel 7!