Developing Decision Making Skills

There are a number of common mistakes that people make when it comes to decision making. When you have to make a complicated decision, don’t put it off. Take a systematic approach and involve key stakeholders so that you can consider different perspectives.

Consider the long-term consequences of your actions, and make sure you communicate your decisions to everyone that it affects. And don’t be afraid to admit it if your decision turns out to be wrong.

Procrastination
When you push your decision to the back of your mind and do other, less important tasks, or seek distractions such as making cups of coffee, you’re probably procrastinating. Putting off making a decision can worsen your situation, and burying your head in the sand won’t make it go away.

One strategy is to give yourself a small window of time in which to start working on your problem. Procrastinators often don’t know where to start, and find decisions overwhelming, but breaking them down into manageable blocks of time reduces the pressure for you to do it all.

Believing it is “make or break”
Can you think back to an important decision where you felt like the weight of the world was on your shoulders, and that making the wrong choice might make or break you?

We’ve all been there, whether it’s deciding to take a new job, launch a new product, or buy a new house. But while it may have seemed like the biggest decision of your life at the time, ask yourself how you feel about it now. By re-framing the way we look at our decisions, we can gain new perspectives about the choices we have to make.

One approach is to think about the worst thing that could happen if you make the ‘wrong’ choice. In some cases, when human life or large sums of money are involved, for example, a poor decision can be genuinely disastrous. In these scenarios, you will have to explore risks and possible consequences very carefully. But in many situations, the worst case is actually not as bad as you think; and even if the decision turns out to be a bad one, you’ll likely learn some valuable lessons along the way.

Not being systematic
When you need to make an important decision, such as whether to launch a new product or develop an existing one, do you go on ‘gut feel’, or do you weigh up each option’s merits in a methodical, calculated way?

Making a decision can be exciting and stressful, so to help you deal with these emotions objectively, you need to use a structured approach. A logical and ordered process can help you address all of the critical elements needed for a successful outcome, and reduce the likelihood of overlooking important factors.

Our eight step, decision making approach looks at how you can create a constructive environment, investigate the situation, and generate good alternatives. It also includes how to explore your options to select the right one, how to evaluate your plans, and what to consider when communicating your decisions.
1. Not considering different perspectives
Many of us are guilty of rushing decisions, particularly when there’s a deadline looming and we’re under pressure. But rather than making a snap decision, make sure you consider a range of perspectives.

Before you try to solve an important problem, try to brainstorm the various people and elements that are affected, so that you get a rounded view of your decision. By considering the situation from, different perspectives your decision making should be much more comprehensive.

2. Not involving stakeholders
When making an important decision that affects other people, you need to involve key stakeholders. They will have insights and information that will affect the choices you make, and this will help you make better decisions. Furthermore, it pays for you to gain their buy-in as you often have to rely on them to implement your decisions.

Make sure that these key stakeholders are well represented within your decision-making group, so that you build their commitment to your decision.

3. Not avoiding psychological bias
There are many other psychological biases that we are all susceptible to in decision making, which can cause us to act in an illogical way. These include having a tendency to jump to conclusions, expecting past events to influence the future, and blaming others when things go wrong, rather than objectively looking at the situation.

4. Being overconfident
Many of us think of ourselves as objective and fair-minded, and we consider all the information available to us to come to a sound conclusion about a problem. However, it’s easy to make poor decisions if you become overconfident in your own knowledge, particularly if people think of you as an ‘expert’.

People often make their reputations for expertise and good judgment by being careful and methodical in their decision making. However, they can let this slip as they get more confident, relying less on analysis and more on ‘gut feel’. This is where sloppiness and mistakes can occur.

If you over-rely on your own opinions, you might be guilty of confirmation bias. This is when you look for information that supports your existing beliefs, and reject data that goes against what you think is true. This can lead you to make bad decisions, because you don’t factor in all of the relevant information.

While ‘going with your gut’ can feel like the right thing to do sometimes, you need to make sure your hunch is based on information that you’ve gathered systematically. To improve your decision making, consider the sources that you tend to rely on when you make decisions and actively look for new ones.

Not thinking about the consequences
We can sometimes find decisions difficult to make because we worry about their long-term consequences. However, some people forget to consider how their choices might affect the future, and focus on the ‘here and now’ instead.

Not communicating effectively
Once you’ve made a decision that affects others, you need to tell them about it. One of the worst mistakes people make is not communicating their decisions in a timely or appropriate way, and this can cause rumours to spread among your team or throughout the organisation.

Carrying on regardless
No one likes admitting to making the wrong decisions, particularly when you’ve battled to get your way, or when there are political, emotional, moral, or financial implications to changing direction. Unfortunately, one of the traps that some people fall into is to ‘escalate’ their commitment, far more than a rational decision maker would.

People do this largely because they cling to an over-optimistic view of the future, hoping that their original decision will eventually come right. It tends to happen when they’ve already got a strong emotional investment in the hard work they’ve put into the project, and they may feel that ‘cutting their losses’ means they are admitting that they’re no good at their job.

When weighing up whether to go ahead with a decision, you have to realise that the time and money you’ve already spent on the project are ‘sunk costs’ that you can never recover, and that you need to put them behind you for decision making purposes. You need to remain objective, consider the facts before you, and try to keep your emotions out of it.

 

Step 1: Create a constructive environment
Decisions can become complex when they involve or affect other people, so it helps to create a constructive environment in which to explore the situation and weigh up your options.

Often, when you are responsible for making a decision, you have to rely on others to implement it, so it pays to gain their support. If it’s most appropriate to make the decision within a group, conduct a stakeholder analysis.

Encourage everyone to contribute to the discussions, debates and analysis without any fear of the other participants rejecting their ideas. Make sure everyone recognises that the objective is to make the best decision possible in the circumstances. This is not the time for people to promote their own preferred alternative.

Deciding who needs to be involved in the decision making process
Consider who your stakeholders are and how you will go about gathering their contributions or making recommendations to them.  Do not forget to consider people whose work will be directly impacted, especially since you will be dependent on their commitment to implement the decision.  You may find it helpful to complete a stakeholders analysis (see below).

Questions to ask yourself at this stage include:

• Who has the formal responsibility for the decision?
• Who will be accountable for its success or failure?
• Who has the experience or expertise to contribute to making a decision?
• Who will ensure that it is implemented properly?
• Who controls the resources necessary for implementation?

Conducting a stakeholder analysis

1. Identify your stakeholders – your manager, customers, suppliers, colleagues, prospective customers, recruits, the community, senior executives.
2. Prioritise the stakeholders – ask yourself who has the most power, influence and interest.
3. Understand the stakeholders

• What financial or emotional interest do they have in the outcome of your work? Is it positive or negative?
• What motivates them most of all?
• What information do they want from you, and what is the best way of communicating with them?

Getting the best from a decision making team
In order to get the best from a decision making team:

• Create a constructive environment where dissent is welcome.
• Ensure that dissenting views are fully explored.
• Actively seek out information that challenges your recommendations.
• Keep groups small to maximise effectiveness (large groups can become unfocused).
• Be aware of others’ motivations and interests and be careful that the issue or decision is not being framed in a particular way to influence you.

Step 2: Investigate
Before you can begin to make a decision, you need to make sure that you fully understand your situation. It may be that your objective can be approached in isolation, but it’s more likely that there are a number of interrelated factors to consider. Changes made in one department, for example, could have knock-on effects elsewhere, making the change counter-productive.

1. Start by considering the decision in the context of the problem it is intended to address.
2. Determine whether the stated problem is the real issue, or just a symptom of something deeper.
3. Trace the problem to its origins to find the root cause.
4. Once you’ve uncovered its root cause, define the problem.

It is important that you avoid information overload which can occur when you become bogged down in analysing every bit of information before making a decision. Often the answer will not become any clearer, and in the meantime you may have missed the opportunity to act at the time when your decision would have produced results.

Step 3: Generate alternatives
The wider the options you explore, the better your final decision is likely to be.

Generating a number of different options may seem to make your decision more complicated at first, but the act of coming up with alternatives forces you to dig deeper and look at the problem from different angles.

This is when it can be helpful to employ a variety of creative thinking techniques. These can help you to step outside your normal patterns of thinking and come up with some truly innovative solutions.

You can use a number of methods to generate your ideas including:

Method	Description
Brainstorming	Brainstorming combines a relaxed, informal approach to problem solving with lateral thinking.  It encourages people to come up with thoughts and ideas that can, at first, seem a bit crazy. Some of these ideas can be crafted into original, creative solutions to a problem, while others can spark even more ideas. This helps to get people unstuck by ‘jolting’ them out of their normal ways of thinking. It can also be less confronting for people to contribute as it is more informal.
Reverse Brainstorming	To use this brainstorming technique, you start with one or two ‘reverse’ questions. Instead of asking, “How do I solve or prevent this problem?” ask “How could I possibly cause the problem?” Instead of asking, “How do I achieve results?” ask “How could I possibly achieve the opposite effect?”
Round Robin Brainstorming	It is all too easy to start a brainstorming session with good intentions, but then to overlook or miss potentially great ideas, simply because one assertive person sets the tone for the entire session.  This is why a Round Robin Brainstorming session can be useful.  This method allows team members to generate ideas without being influenced by any one person.

Step 4: Explore your options
When you’re satisfied that you have a good selection of realistic alternatives, it’s time to evaluate the feasibility, risks and implications of each one.

Almost every decision involves some degree of risk. Use risk analysis to consider this objectively by adopting a structured approach to assessing threats and evaluating the probability of adverse events occurring.

Weigh up a decision’s financial feasibility using a cost-benefit analysis.

Decision making tools can help you evaluate and compare alternatives. The choice of tool will depend on your situation. Here’s a few to consider:

Kepner and Tregoe’s rational model – encourages you to determine which factors are most important in a decision and to weight options according to how well they meet requirements.  For a complex technical decision, for which plenty of time has been allocated, this can be an effective and transparent process for reaching a conclusion. However, under conditions of uncertainty or rapid change, this method may be too cumbersome.

Decision trees – can be used to represent uncertainty, revealing the risks and potential rewards of alternative courses of action. The division of the tree into branches shows the points at which choices can be made, and the possible outcomes of these choices. Probabilities are assigned to each outcome as well as estimates of how much value each would deliver.

The Plan-Do-Check-Act (PDCA) cycle suggests making incremental decisions and following these up with actions and then analysis, before moving forward.

If time is limited or the decision is less complex, the following strategies can be used:

Paired comparisons – If you are considering multiple options, pairing them and comparing their performance on key requirements allows you to quickly eliminate options, allowing only the preferred option to progress to the next round.

PMI – Plus / minus / interesting is a type of pros and cons list used to make binary yes / no decisions, where you also record any interesting implications of the choices that do not clearly fit into the plus or minus columns. Before you start, it is important to ensure that a binary decision is really required and that you are not excluding other valid options.

Step 5: Select the best solution
Once you’ve evaluated the alternatives, the next step is to make your decision. If one particular alternative is clearly better than the rest, your choice will be obvious.

Watch out for biases and common psychological traps
Our responses to situations are prompted by a complex array of factors influenced by our background, experiences and even hard-wired evolutionary responses. This can easily lead you into traps where you can make not the best decision.

Common psychological traps that can impair your decision making include:

• Confirmation bias – uncritical acceptances of information that confirms existing beliefs.
• False analogy – assuming that the situation is just like a previous one, ignoring the differences.
• Availability bias – allowing your mind to construct a narrative only from the information that is immediately in front of you.
• Tunnel vision – failing to see the ‘big picture’ while focusing on the detail.
• Vividness – Ignoring more mundane alternatives in favour of the most vivid option, for example, being swayed by a sales pitch into making an instant decision without considering the alternatives.
• Sunk cost fallacy – giving weight to resources that have already been spent, when these do not have an impact on the future costs and gains of pursuing an alternative.
• Loss aversion – a preference for avoiding possible losses over pursing possible gains.

To avoid these traps it is a good idea to include more people in the decision as it is easier to spot biases in others’ thinking. You can also use the WRAP technique:

• Widen your options – expand your set of choices as far as possible
• Reality – test your assumptions, collect reliable information and explore dissenting views.
• Attain distance before deciding – avoid making decisions based on short-term or emotional factors.
• Prepare to be wrong – what will happen if things do not go according to plan.

Step 6:  Evaluate your plan
With all the effort and hard work you’ve already invested in evaluating and selecting alternatives, it can be tempting to forge ahead at this stage. But now, more than ever, is the time to ‘sense check’ your decision. After all, hindsight is great for identifying why things have gone wrong, but it’s far better to prevent mistakes from happening in the first place.

Before you start to implement your decision, take a long, dispassionate look at it to be sure that you have been thorough, and that common errors haven’t crept into the process.

Your final decision is only as good as the facts and research you used to make it. Make sure that your information is trustworthy, and that you’ve done your best not to ‘cherry pick’ data.

Discuss your preliminary conclusions with important stakeholders to enable them to spot flaws, make recommendations, and support your conclusions. Listen to your own intuition, too, and quietly and methodically test assumptions and decisions against your own experience. If you have any doubts, examine them thoroughly to work out what’s troubling you.

Step 7:  Communicate and implement
Once you’ve made your decision, you need to communicate it to everyone affected by it in an engaging and inspiring way.

Your communications should:

• Be timely
• Include all stakeholders
• Explain how and why the decision was made
• Clearly explain the consequences of the decision

Look at the people that your decision impacts. What information do they need, and what is the most engaging and interesting way you can communicate it? If the decision is going to have a significant impact, or if you’re in a crisis, then the best way to tell people about it is probably in person.

Take a different approach for people who aren’t directly affected by your decision, but who still have an interest in its outcome. For this broader audience, you might provide a summary of your decision, perhaps in an email. They may need less detail than the key stakeholders but you’ll still need to give them some background information, such as how you arrived at the decision and how it will affect them.

Step 8:  Review and redesign
One of the most important factors in improving your decision making is feedback. In some cases, feedback may be quick and clear. In others, such as long term investment decisions, it may take some time for the impact to become apparent. It may also be ambiguous, in that the decision moved the organisation forward in some ways, but held it back in other areas.

However long it takes for the lessons to become clear, they should not be ignored.  Keeping a record such as a decision making journal could help you to continuously improve your decision making skills and recognise traps in your own thinking.

Decision making is the act of choosing between two or more courses of action.  In the wider process of problem solving, decision making involves choosing between possible solutions to a problem.   Decisions can be made through either an intuitive or reasoning process or a combination of the two.

Intuition

Intuition is using your “gut feeling” about possible courses of action.  Intuition is actually a combination of past experience and personal values.  It is worth taking your intuition into account, because it reflects your learning about life.  It is, however, not always based on reality, only your perceptions.

It is important to examine your gut feeling closely, especially if you have a very strong feeling against a particular course of action, to see if you can work out why and if this feeling is justified.

Intuition is generally appropriate when the decision is of a simple nature or needs to be made quickly.  It is important to be wary of impulsive reactions to a situation.

Reasoning

Reasoning is using the facts and figures in front of you to make decisions.

It can, however, ignore emotional aspects to the decision and in particular, issues from the past that may affect the way that the decision is implemented.

Choosing a Decision-Making Approach

Making effective decisions as a manager is a significant challenge in a fast-moving workplace.

There are many approaches to decision making the following training introduces some of the tools and models that can be used.   Some of these involve gathering extensive information about preferences and available options before undertaking a deliberate analytical process to evaluate the merits of each possibility.   At the other extreme, decisions can be passed purely on a manger’s institution as they subconsciously synthesis past experiences and extract lessons to apply to a current situation.

As a manager, you need to apply your skills to select the most appropriate approach for the context you are operating in and the kind of decision you need to make.

Benefits of Good Decision Making

1. Speedy results – The decisions of a leader are clearly embedded in the type of result she/he generates. Good decision making skill means elimination of errors, increase in success rate and speedy results in implementing initiatives.
2. Savings in money, time and energy –  A good decision saves time, money, energy and results in the achievement of planned objectives in the most cost effective way. It ensures that delays are removed from the process and time gained is converted to asset for the organisation and its team
3. A sense of individual achievement and fulfillment –  When a leader makes a good decision, which yields high positive results, she/he feels good and experiences fulfillment and a sense of achievement.
4. It stands you out and makes you outstanding – Through recognition of the impact of the good decision by friends, colleagues, partners and superiors, the leader gains wider influence and greater authority.

Be Clear on the Scope

Some of your decisions are so routine that you make them without giving them much thought. But difficult or challenging decisions demand more consideration. These are the sort of decisions that involve:

• Uncertainty – Many of the facts may be unknown.
• Complexity – There can be many, interrelated factors to consider.
• High-risk consequences – The impact of the decision may be significant.
• Alternatives – There may be various alternatives, each with its own set of uncertainties and consequences.
• Interpersonal issues – You need to predict how different people will react.

When you’re making a decision that involves complex issues like these, you also need to engage your problem-solving, as well as decision-making skills. It pays to use an effective, robust process in these circumstances, to improve the quality of your decisions and to achieve consistently good results.