Good Decision-Making Means Good Business!
Business owners and business managers are constantly having to make business decisions. However, these decisions are often made under pressure.
Common Pitfalls To Avoid In Business Decision Making
What drives your business’s progress is the quality of your decision-making. Without the right information, your decision-making, and in turn, your business’s progress, will not happen.
When making decisions and for your decision-making to be effective. It is always a good idea to avoid pitfalls. Here are six common pitfalls you should avoid.
- Avoid making decisions on the basis of flawed logic, and incomplete information;
- Base your decisions on a foundation of knowledge and sound reasoning;
- Weigh up the “consequences” of your decisions;
- Weigh up the positives and negatives of each “available option” and consider the “alternatives”;
- “Forecast the outcome” of each option; and
Remember. It is a good idea to continually “improve” and “hone” your decision-making skills;
Strategies You Can Use in Decision-Making
Making better, faster decisions will help you take advantage of business opportunities and avoid pitfalls.
There are strategies you can use to avoid common pitfalls and hone your decision-making skills.
Before providing you with some useful strategies. It would be a good idea to first provide you with a definition of “What is Decision-Making?
Decision-making is about choosing from:
- Several options, and ideas.
- Taking action to generate a particular result.
To put it another way, decision-making is usually considered to be a rational and logical thinking process.
Remember, your business should always be better off as a result of making better decisions.
Here is a list of strategies you can use to avoid the common pitfalls and to help you in making the right decisions.
Define the Issue/Situation
It is vital to have a good understanding and be very clear about:
- What is the issue/situation?
- What is it that you want to achieve?
Remember, this will set a very clear and measurable outcome for your decision-making process.
Step Back and Think about the Issue/Situation
Step back and think about the issue/situation in its full context. By stepping back and thinking about the issue you are in effect, seeing this from as many perspectives as possible.
Gather the Facts
Gather all the facts and necessary information that has had an impact on your business. This is important, because, you do not want to miss critical information that could make a difference in how you run your small business.
Focus on the Results
Focus on your business’s results. This allows you to look for ways on improving how your business does business. This will go a long way in helping you to accomplish your business goals and your business’s mission. For example, keeping up-to-date on your business’s financial statements is very important.
The information required can be about the alternatives or about the issue/situation and the required outcomes. The number of alternatives you choose will depend on such factors as:
- Knowledge, and
Selection is the choice of one of the alternatives (i.e. choose the option that has more positives than negatives).
Make your Decisions Based on Evidence
Make your decisions based on the evidence currently at hand. Here is a list of simple steps you can take to incorporate this evidence into your decision-making:
- Use performance data to support your decisions. You should use the most complete and current data possible.
- When a course of action is suggested, try to establish what this course of action is based on and whether it is supported by data.
- Determine whether commonly used business strategies have worked in a similar situation to yours, and will these strategies apply to your particular situation/issue.
Remember, always check if the data you are using is current.
Consider Other Viewpoints
Consider seeking other viewpoints, rather than just your own such as a business consultant, or even your business peers. For example, consider joining a local business support group to network with and to get some valuable information that can help your business.
Determine and communicate to your employees the level of decision-making authority they have regarding decisions. Let them know up-front, how committed they should be in the decision-making.
Remember. While decision-making is based on the collective benefit of all, how you go about making that decision should be your own (i.e. stay autonomous and take responsibility for your own decision-making).
Any time spent making a decision is wasted if it is not converted into an action plan.
Remember. By taking action you are in fact, able to assess whether your decision has actually achieved the desired outcome. If not, then you may need to make some modifications until you reach your desired outcomes.
In summary, many business owners and business managers make the mistake of wanting to know how things will pan out, even before they make a decision. In fact, this is counter-productive to the decision-making process.
You can avoid making mistakes, by simply taking the time to:
- Think about the pros and cons of making business decisions, and
- Weigh up the consequences of your business decisions.
Contact Us Today
If you require more information or assistance, please call our “business consultants” today on 1300 4 SINGH, or simply click here to send your question.
DISCLAIMER: This blog post is of a general nature only and does not constitute professional advice. I strongly recommend that you seek your own professional legal and accounting advice in relation to your particular circumstances.