There’s no way around it. Making decisions, both large and small, is critical to the success of a business. Decisions come from the need to solve a problem, or the need for a potential opportunity.
The core of the decision-making process is typically standard.
- Identify the goal
- Gather relevant and necessary information
- Weigh alternatives in order to make a decision
Simple concept, right?
Unfortunately, as simple as it seems, many people overlook some of the critical steps that should be part of sound decision-making. As experts in the business, Azul Corporate Advisory is ready to assist you through your own decision-making process.
Benefits of Making Good Decisions
1. Good decisions last longer.
When decisions are made using a well-thought-out process, that decision rarely needs to be revisited or re-evaluated. Good decisions can sometimes even last the entire lifespan of an organization.
2. Good decisions weigh internal and external factors.
A good decision-maker considers the company holistically. More specifically, the decision shouldn’t be one that benefits one aspect of the business at the expense of another.
3. Good decisions eliminate conflicts of interest.
With open communication and transparency throughout the decision-making process, questions or concerns after the fact become far less likely. The benefit of this process is to keep the organization focused and on a common track.
4. Good decisions actually work better overall.
This may sound obvious, but consider the alternative…
A bad decision leaves a department or company further from their goal, failing to solve the initial problem. Make the right decision the first time, and the entire brand thrives!
The 7 Steps of Making Sound Business Decisions
Following a deliberate process with specific steps can help businesses make more informed decisions, ensure the choice and success of the right decision, and propel a business forward. The seven-step decision-making process is a popular model to follow given the current business climate.
Here is how the process flows, step by step.
Step 1: Identify the Decision
The first step in the process is to recognize that there is a decision to be made. Decisions result from an attempt to address a specific problem, need, or solution. Outline this goal decision as specifically as possible. Why is this decision critical for your business goals?
The decision-making process is a step-by-step process, and in order to keep focus, you will need to be able to support why you initially selected the goal necessitating a decision every step of the way. Clearly identifying the decision to be made is an essential step that paves the way for the next step.
Step 2: Gather Information
Now that you know you have a decision to make, you need to gather information related to the decision. This is an important step. Effective decision-making requires information from many different resources. For example, an internal assessment can help to see where your organization has succeeded and failed. Additionally, seek information from external resources, including market research, studies, or evaluations from outside consultants.
Step 3: Identify Your Options
There are going to be many alternatives available for every decision to be made, because there is usually more than one option to consider when trying to meet a goal. You don’t need to identify absolutely every possible alternative, only the ones that could realistically work for the situation.
To help funnel the options down, eliminate the ones that aren’t feasible and ensure that the company can accomplish all the proposed alternatives (financially, legally, from a deadline or resource perspective, etc.).
Step 4: Evaluate the Information
The next step is to compare all of the alternatives and weigh your options. This is when you take all of the different solutions you’ve come up with and analyze how they would address your initial problem or opportunity.
Identify potential pitfalls for each of your alternatives, and weigh those against the possible rewards. Begin to rank the alternatives, reflecting on how each option may resolve the problem or opportunity.
Depending on the decision, you might want to use specific tools or strategies to help weigh all of your options. Listing the pros and cons of your decision, for example, is a classic way to do this. Other ways to evaluate your options and make better decisions include creating a decision tree or matrix.
Step 5: Select Your Decision
Now it’s time! This is the step where you actually make THE decision. You’ve identified and clarified what decision needs to be made, gathered all relevant information, and developed and considered the potential paths to take. You are well equipped to choose your decision!
Don’t be surprised if the decision is not from only one source. Combining the best aspects of different alternatives can lead to a perfectly blended decision. Effective decision-making involves creative problem solving. Don’t limit yourself to choosing just one option while risking the benefits of another.
Step 6: Take Action
You can feel confident knowing you’ve taken all the necessary steps before now to make the best decision possible. Once you commit to putting a specific solution in place, go all in – put the decision into action with conviction. Making a decision without taking action would stall the decision-making process.
It’s time to execute, implement, and go forward with the plan. Be direct in making an implementation plan so that your team is on the same page. A good decision with a weak execution would be a waste of time and energy. It gives you a false sense that a bad decision was made. In addition, have a system in place to measure, monitor, and evaluate performance over a specific timeframe. This will be helpful in the next and final step.
Step 7: Review Your Decision
The review stage is the last step of the decision-making process. Here, you will take an honest look back at your decision. Did the specific outcome resolve the problem or opportunity you initially identified? If the outcome was achieved, you’ll want to reflect on what went right and any challenges or lessons learned along the way.
Even if you follow the steps of the decision-making process, there is still a chance that the outcome won’t be exactly what you had in mind. Business environments are constantly changing. There are many unknowns and what-ifs at play. Be ready to adapt your plan as necessary, or switch to another potential solution. Learn from your mistakes as you begin the decision-making process all over again.
Let us Help Your Decision-Making Success
Your success and the success of your company depend on you making the right decisions and learning from the wrong ones. Using these decision-making steps can help you make the most sound decision for your team.
Azul Corporate Advisory knows that empowering teams to make strategic decisions results in cohesion and strength. Schedule a complimentary consultation so we can lead you through the process each step of the way.