Making Better Decisions

How to make smart, timely decisions to benefit your business

In today's world, a small business without good decision-makers is like a computer with dial-up internet access: lagging behind the competition and soon to be obsolete. Think good decision-making skills cannot be taught? Think again! Here are the three steps to making great decisions:

1. Consider choices to determine whether they fit your short- and long-term business goals.
2. Identify emerging issues and develop anticipatory decision-making skills.
3. Utilize one of several standardized methods to recognize the right choice for your situation.

 

Look at the big picture

Decision-making often goes wrong because it has only a short-term focus. It takes strategic planning to reach the long-term goals in your business plan, and nearly every decision you make along the way, good or bad, will affect your ability to achieve those goals.
Try: The U.S. Small Business Administration (SBA) has a free, online guide to the basics of strategic planning (PDF).

Anticipate and you'll do great

Become an anticipatory decision maker. No one can foresee every twist ahead, but by examining potential areas of improvement in your small business, you'll have time to consider your options before a real need arises.
Try: The educational site Horizon offers "Anticipatory Management: Tools for Better Decision Making" with advice and tools to help you think ahead.

Write it down

Get to know some easy-to-use decision-making outlines, including the Pareto Analysis, to help you prioritize your decisions, the Decision Trees, a "pros and cons" list, and the Six Thinking Hats, to show you a range of perspectives.
Try: Mind Tools explains various decision-making techniques and lets you print the worksheets for free.

Use cost benefit analysis (CBA)

A cost-benefit analysis contrasts the actual costs to the long-term financial benefits of a specific decision.
Try: Check out Mind Tools to discover the financial effects of your possible decisions. The bonus? They give you the low-down without a bunch of 50-cent words.

(Almost) automated answers

Computers do everything in today's world - and yes, that includes helping you make business decisions.
Try: Microsoft offers automated tools designed to improve the quality and speed of decision-making. Check out the Microsoft SQL Server Reporting Services and the Microsoft Office Excel Add-in for SQL Server Analysis Services.

 

• Be rational, not rash: Rational decisions are good. Rash? Not so good.
• Be wary of groupthink: Studies have shown that in a group atmosphere, people are less likely to voice individual thoughts and more likely to follow the other group members' ideas.
• Gather the information: Be sure to collect all necessary information to allow you to make the wisest decision.
• Get feedback: Bounce your ideas off a trusted colleague for his/her feedback.
• Don't get stuck with the leftovers: If you're slow to decide, some of your options might become unavailable, leaving you with the less-appealing alternatives.
• Don't play the blame game: We all hate making mistakes, but the real mistake would be rationalizing, making excuses, or blaming someone else.
• Learn from your experience: Take notes about your decision-making process and results, and learn from your successes and mistakes.

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