Saturday, September 1, 2012

Decision Making (#1 of a short series)

I’ve spent the last few years writing this newsletter about communication. I started doing that because I saw (as many of us see) that we and our co-workers often make decisions that turn out badly, and those disappointing results can usually be traced back to two elements: lack of necessary information and a lack of objective understanding of the facts. Because these are the biggest shortcomings in our decision making, I write and speak about them the most (how do we get better information and develop a better understanding). However,  they aren’t the ONLY problems with our decision making so today I will start a multi-article series about how to improve our decision making with ideas NOT centered on face-to-face communication.

When we talk about “problems with decision quality” we have to start with a definition of a good decision as our reference. If I ask 10 people “how can you tell if a business decision was a good one?”, I will almost always hear “I don’t know”, which is a little troubling. After some discussion I will generally hear “you can say that a business decision is good if you got a good result”. That is, if we:
·         wanted to enter a new market
·         decided that certain design changes would be important to that market
·         made the design changes
·         began competing in that market
then our decisions were good, because we got a good result.

Really? So you can’t tell if a decision is good until you get a result? Decision experts tell us that that is a bad way to look at things BECAUSE it gives us an excuse to relax the rigor of our decision making and rush through the process of making them. I mean, if you can’t tell if the decision is good until you get a result, then you don’t need to bother with being rigorous; you need to get the result and then adjust.

This lack of understanding regarding decision making cripples countless business efforts and reduces our willingness to hold accountable our decision making process. Of course we want our decisions to yield good results, and by identifying and considering the important factors involved and methods used in making decisions, we can improve our decisions markedly. Let’s start with a new definition for a good decision:
A good business decision is one that has been made in a way that assures:
·         that rigor has been applied in the objective identification and consideration of the expected impact of the outcome terms of:
o   benefit and consequence
o   permanence
o   strength to bind the stakeholders to the outcome
·         that rigor has been applied in the objective identification and analysis of the information upon which the decision will be based
·         that the rigor applied is proportional to the impact of the decision, and therefore efficient in the use of the resources required to make it

Over the next few weeks I will describe how such a decision making method is implemented and how all of the elements of a good decision are defined and determined. 

Insist on great business results! Go to Pathfinder Communication

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