What are good decisions?
Some might say it only turns out in the end whether a decision was good or not. While that is certainly true, it can be unfair to the decisionmaker. I believe that good decisions are those decisions that can potentially solve a problem. What is the difference? Let me show you my evaluation criteria for a retrospective analysis whether a decision was good:
- was the decision based on the complete set of information that could have been available to the decision maker with reasonable efforts (or within a limited time frame)?
- was the problem which called for the decision
- clearly defined?
- correctly captured (based on the available information / the available time frame)?
- were there at least two realistic solutions/options to decide between (ideally at least one more than just yes or no)?
- were the decision criteria suitable to select the solution that – with the available information – successfully solves the defined problem?
- was the decision made on time?
The key message of these criteria is: I strongly believe that also decisions that lead to a bad result can be considered being good decisions – if they fulfil these criteria.
How can something that causes a bad result can be considered as good? I believe in a business culture that is tolerant to failures (believe me – it took me long efforts to accept this point of view). Ironically it was not the singer Kelly Clarkson but the philosopher Friedrich Nietzsche who was first known to say: what does not kill you makes you stronger. And there are many examples to prove he was right.
How to make good decisions
Secret 1: don’t be afraid
Sometime it feels scary to be the one who has to decide about “the fate”. For example if there are several options (“which one is best?”) Or in case there is a lot at stake. But there is no need to worry. Why not? I give you three reasons:
- if a decision turns out to cause bad effects, simply look at it as a new problem – so there will be a second change to make a better decision
- if a decision turns out to cause positive effects, nobody will ever know whether another solution would have been better – you cannot turn the wheel back and decide again
- quite often not making a decision is a bad decision – a business would lose focus or miss opportunities
Secret 2: respect the challenge
Never underestimate your challenge. If the challenge turns out bigger than you thought, you will be surprised by its power. If that happens it will be much more difficult to make good decisions, because:
- the original problem will have been increased
- the time to solve the problem will have been decreased
- others will have been better prepared and have taken their opportunities
How can you make sure you respect the challenge? Respect the five questions in the beginning of this article. If you strive for answering them with yes after you made your decision, you will be safe.
Secret 3: understand the problem
In the beginning of this article I said I believe that good decisions are those decisions that can potentially solve a problem or make a situation better. Obviously without correctly understanding the problem, good decisions cannot be made.
The following questions proved to be useful for me to understand a problem:
- Where are you? – Describe the current situation and what is problematic about it.
- Where do you want to be? – Recall the objective that is linked to the problem.
- What does obstruct your way? – Identify the causes that prevent you from achieving the objective.
I found an interesting method for understanding problems posted by John Borwick.
Secret 4: use all your resources
If you want to make good decisions, don’t shoot from the hip. You have a lot of resources, so why wouldn’t you want to use them? Here are the most important:
- time: take your time, but don’t be too late – knowing when you have to make a decision gives you space to prepare good decisions
- team: use the expertise, heritage and creativity of your team – usually there you have all it takes to find a good solution
- network: ask people in your network – they may be able to add new perspectives to the problem and open horizons to a variety of solutions
- benchmarks: investigate how others have solved similar challenges – don’t reinvent the wheel
Secret 5: focus
If you have well understood the problem and taken advantage of all your resources, you will have a number of good options to choose from. But which one to chose? The more you compare, the more disadvantages you’ll find in each of them.
My advice: don’t look for the optimal solution unless your problem is mathematic. In business, it does not exist. Focus on your objective. Then choose a solution that is most suitable to achieve it. It will be a good decision!
Secret 6: learn from failures
I admitted before that even with good decisions there is a chance of failure. But what is the consequence of a failure? You will have a new problem to solve. And your advantage is that with a failed decision, you have already opted out one way to solve it. Doesn’t sount too bad, right?
And this is not the only lesson you can learn from a failure. Here are some other benefits you can take out of failures:
- Improve your process: possibly you find out that something in your decision making process can be improved
- Adjust your prioritization patterns: maybe you find out that in retrospective, your priorities in selecting relevant information made you miss something important. Prioritization is strongly based on experience. Congratulations, you made some new experience.
- Sharpen you selection criteria: perhaps something was missing in your criteria to select the chosen solution. Keep it in mind, and the outcome of your next decision might be better.
There is a detailed article about strategies for learning from failure in the Harvard Business Review. Check it out.
What is your best lesson learned? What are your ingredients for making good decisions? Share them with us and leave a comment!