Decision-making in business, particularly in times of uncertainty, is the most important role of management and leadership. Making classic business decisions involves good listening, careful thought, focus, execution and evaluation of results.
Focus. Break the decision's impact down into areas such as operations, marketing, employees, investor relations, finance, technology and costs. Avoid distractions that are not relevant to the specific decision at hand. Be aware of alternative paths and analyze how these are different from the decisions that appear to be the right answer. Remove emotional considerations from the process.
Think. Making decisions under uncertainty does not mean that all consequences can or might be evaluated, but they can be identified. Quantify potential results wherever possible. As managers gain more experience, they tend to rely more and more on instinct to make decisions. Experience is critical to classic decision-making, but needs to be combined with careful thought and analysis based on information gleaned in Step 1.
Execute. As soon as a classic business decision is made, it is important for good leadership to stand by it and see it all the way through to its conclusion. Often a decision is based on expectations of actions and results, which means that if action is delayed or not executed properly, the foundation of the decision is weakened. Making decisions with no intention to execute the decision is the same as not making the decision at all.
Listen. Before good business decisions can be made, as many points of view and as much information as possible should be considered. It can be hard for a leader to be a good listener, but this is an essential skill. Most companies have a senior leadership team, which brings together a variety of disciplines such as finance, marketing, legal, technology, human resources and others. All of these voices and perspectives need to be heard by the decision-maker. She must understand the ramifications of each decision and how it affects stakeholders such as employees and shareholders.
Test. Always review and test the results of business decisions over time. Assumptions, market conditions and personnel choices should be reviewed in light of how they change over time and affect the outcome of a decision. Understand where assumptions might have been flawed. Look at the alternatives and try to quantify how they might have turned out. Compare these scenarios with the one chosen. This last step can be very important to making decisions in the future.
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