Decisions… decisions… decisions. We make them everyday and sometimes every night before we go to bed. We’re not talking about what to wear to work or if you should drop the laundry first after you bring the kids to school. We’re talking about the decisions that can be game changers for your business.
The most successful companies in the world got to where they are because they were spearheaded by amazing decision-makers.
How did they become great at decision-making? They worked on it because they realized decision-making is a skill. And like all skills, you need to put in the time and the reps.
The good news is that everyone and anyone can become an effective decision-maker. Like the greats, you just have to work on it.
Here are 14 ways you can improve your decision-making skills.
1. Accept the Reality of Failure
Here’s a secret the best industry leaders won’t hesitate to share with you.
Not all of the decisions they made turned out to be winners. In many cases, these decisions cost the company a ton of money.
Sir Richard Branson successfully diversified the Virgin Group into various industries such as finance, aviation, healthcare, telecommunications, and entertainment but his decision to join the “Cola Wars” was a costly one.
And Virgin Cola wasn’t the only mistake he made. According to Sir Richard Branson, he’s had more failures than successes. But these failures didn’t deter him from his goal of growing the Virgin brand.
Like Sir Richard, you shouldn’t expect all of your decisions to be the right one. There will only be 2 outcomes: Success or failure. You can have all the feasibility studies made and consult with multiple industry experts but none of these will guarantee success.
The most important thing is to make the call: Yes or No? Deal or No Deal? Go or No Go?
As the saying goes, “If you’re not moving forward, you’re moving backward.” If your decision ends in failure, you’ll have the opportunity to find out why, and come up with the courses of action to remedy the situation.
2. Develop the 3 Areas of Your Brain
Contrary to popular belief, there are 3 areas of the brain and not 2.
- Cephalic – Problem-solving and decision-making.
- Cardiac – Compassion and values.
- Enteric – Intuition and courage.
To become an effective decision-maker, don’t just focus on the cephalic area of the brain. Equally developed cardiac and enteric areas will help support your ability to make good decisions.
In this article, we’ll show you activities you can do to develop the cephalic area. But what about the cardiac and enteric areas? What can you do to make them stronger?
- Cardiac – Get into art, music, or any activity that draws out your emotion and creativity.
You might not be able to play a composition of your favorite musician note-for-note but in the process of learning, you’ll develop your own style.
- Enteric – Take up a physical activity or join competitions. Overcome challenges and your fear of failure at the same time. If you’ve never run a 5k race before, finishing one will make you a more confident person.
3. Understand What’s at Stake
Decision-making often comes down to who will benefit the most. And sometimes these types of decisions come at the expense of others.
For example, a decision to automate processes will benefit the company because it will increase productivity and reduce costs. But it will mean some employees will lose their jobs because automation will render their positions redundant.
When you understand what’s at stake and you can accept the consequences along with the benefits, you’ll be able to make quicker decisions.
Remember, the best decisions might not be the most popular ones but you still have to make them.
4. Learn to Manage Your Interests
Many people become entrepreneurs because they want to have their own time, be the boss, and achieve financial independence.
After years of hard work and sacrifice, your business has achieved profitability. With the help of your accountant, you realize that you’ve made more money in one year than you had as an employee for 5 years.
Is it time to buy a new car or take a one-month vacation?
You might have to put those dreams on the backburner because now’s the time to plow more money into your business and fund its expansion activities.
An important component of decision-making is having the willingness to sacrifice self-interests in order to achieve the “Big Picture”. There are projects to be funded, more talent to hire, and suppliers of better quality products to pay.
Learn to manage your interests, stay focused on the goal of this journey and you will get there.
5. Limit Your Circle of Trust
Having trusted advisors or consultants around you is a smart idea.
You get the perspective of more experienced people and benefit from their guidance. Likewise, these learned professionals have the ability to see details that you didn’t.
That said, limit the size of your circle of trust. Getting too many opinions and perspectives will only pile on the things to consider. It will lead to inaction and delay the decision-making process.
Identify the people in your circle who have been consistently reliable and who have maintained a high batting average in giving you expert advice.
6. Plan Ahead
Planning ahead makes the decision-making process easier and faster because you can anticipate the challenges and prepare better. You can identify potential pain points, obstacles, and deal-breakers and have courses of action ready for implementation.
Thought leaders and iconic figures in business and politics such as former President Barack Obama, Warren Buffet, Bill Gates, Oprah Winfrey, Jack Ma, the aforementioned Sir Richard Branson, and the founder of Zappos the late Tony Hsieh were known to plan their days the night before.
This is a wonderful practice!
Before you go to bed, identify the 3 tasks or projects that you need to prioritize the following day. Outline your strategies for accomplishing them and commit to the undertaking.
Trust us when we say that the decision-making process the next day will be flowing faster than would be possible if you chose to procrastinate.
7. Have a Process in Place
Let’s be clear about one thing.
We want you to make educated decisions not rash ones. It’s good if you can make snap decisions but it’s better if you can mitigate the risk factors. The best way to do this is to have a decision-making process in place.
Processes will differ from person-to-person.
For example, Person A might follow the process below:
- Step 1 – Identify the objective of the decision.
- Step 2 – Conduct research to pinpoint the risk factors.
- Step 3 – Come up with courses of action.
- Step 4 – Identify the course of action that presents the least risk at achieving the objective.
- Step 5 – Assess the skills needed to carry out the proposed course of action.
- Step 6 – Estimate the cost that will be incurred by taking the proposed course of action.
- Step 7 – Develop the projected timeline.
In comparison, Person B might remove a few of the steps while Person C might add a few more steps.
The bottom line is to come up with a process that gives you the basis for making an educated decision and, most importantly, confidence before calling the shot.
8. Establish Clear Goals
Goals set the direction of where you want your business to go. Executives and key decision-makers perform a year-end review to summarize the highlights and challenges of the previous 12 months and use the data to lay the groundwork for the next 12 months.
Establishing clear goals means determining where you want your business to be at the end of the year.
Break down your long-term goal into smaller goals – semi-annual, quarterly, monthly, weekly – to give you a more focused approach and anticipate potential obstacles that might throw you off track.
When you have a clear vision of your end-goal, it will be easier to make decisions that can put you back on course.
9. Keep Your Biases In Check
Blockbuster Video had the opportunity to buy Netflix for US$50 million in 2000 but passed because the company didn’t believe the technology to stream movies online was possible.
In 2010, Blockbuster filed for bankruptcy. Netflix earned US$25 Billion in 2020.
The moral of the story is: Sometimes it’s okay not to trust your gut instinct.
Netflix co-founder Marc Randolph recalled Blockbuster CEO John Antioco trying not to laugh as he and Reed Hastings made their pitch.
Your intuition is often influenced by your biases. Having the ability to make quick decisions is great BUT that doesn’t mean you don’t put in the time to study the circumstances of the situation.
If you’re pressed for time, don’t give in to the stress. Use the remaining hours or minutes to gather as much information as possible, consult with your advisors, and review the numbers to arrive at an educated but objective decision.
10. Set Timelines… and Follow Them
Every decision you make has the potential of affecting your timeline. Delays can be costly for your business.
For example, if it’s necessary to hire a technically-skilled member to your software development team, establish a time-table for hiring.
- When to post the job ad?
- What would be the inclusive period for acquiring candidates?
- When should we arrive at the final list of candidates?
- How many days will we need for testing/qualifying the candidates?
- What is the official date for selecting the employee?
- How many days should we set aside for submission of documents, training, and orientation?
Creating a Gann chart which plots these activities into a calendar will help you stay on top of the time-table.
As we mentioned earlier, you must spend time reviewing/analyzing the circumstances of the situation. But if the circumstances won’t change, why put in any more time that you have to?
Setting timelines keeps you mindful of your business objectives. It will motivate you to pull the trigger and make the final decision. The sooner you make the decision, the more time you’ll have to rectify the situation if it results in an unfavorable outcome.
11. Stay Healthy and Fit
Staying healthy and fit means:
- Getting regular exercise
- Eating good, unprocessed, healthy food
- Getting 7-8 hours of quality sleep every night
- Managing stress levels
Collectively, these habits help your body and mind function at 100%. You’ll be more alert, focused cognitively, and have stronger mental acuity. It will be easier for you to process information and have a sharper, clearer perspective of the situation.
Exercise at least an hour a day for 3-4 days a week. Regular exercise will also help manage stress.
Choose unprocessed foods and avoid eating fast-food; take in more healthy greens which help oxygenate your blood. Put off technology at least 2 hours before bedtime.
12. Surround Yourself with the Right People
It’s not the number of advisors and consultants that you should limit. It’s also the number of people you deal with on a daily basis.
Surround yourself with the right people – those who share similar values as you, share your purpose, and respect your vision. These are the ones who will commit themselves to helping you achieve your business goals.
Remove toxic people or those whose attitudes and behaviors are disruptive to your organizational culture. Their presence is similar to having a rotten egg inside an enclosed carton of fresh eggs. Over time, the otherwise good quality eggs will become rotten.
Toxic people tend to value self-interests over the company’s. They might give you advice that runs contrary to your business goals and feeds their selfish agenda.
13. Learn From Your Past Experience
If you need more validation on why it’s important to have good decision-making skills, look no further than your past experiences. Think about the incidents where your inability to make the call led to missed opportunities.
It’s perfectly fine to make mistakes. The most important thing is to learn from them. There’s value in failure. In truth, failure reveals your flaws and weaknesses. Use the experiences as reference points for addressing these weaknesses and turning them into strengths.
Reflect on the moment when you realized that your indecisiveness became costly for your business. How did you feel? How long did the feelings last? How did you overcome these feelings?
Surely, you wouldn’t want to experience these types of feelings again!
14. Practice Decision-Making Every Day
From the moment you wake up, your day becomes a series of decisions. Some of these decisions might seem trivial but you still have to make them nonetheless. The trivial ones help you recognize which ones matter and which ones don’t.
It was for this reason that the late founder of Apple Steve Jobs wore the same black turtleneck every day. He didn’t want to be inundated with making the same decision of what to wear. Jobs wanted to allocate more time on making decisions that mattered.
If you’re confronted with a matter that requires a decision, don’t shy away from it. Embrace the challenge, analyze the situation, and make the call. Chances are that won’t be the only decision you’ll have to make in a day.
The more time you spend making decisions, the better you’ll get at it.
It’s understandable why so many people struggle with decision-making. They can’t accept the risks of making the wrong call.
They imagine what the critics and naysayers would say. They don’t want to let their people – the employees, partners, and stockholders – down. They can’t stomach the thought of their competitors getting ahead because the decision yielded the wrong result.
But “they” are just in your mind. You can’t control what others think or feel. You have to live in the moment and call the shot when the need arises.
The worst decision is to not make one.
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