Topic of the day
Decision Making
Plan > Focus > Execute
Be more efficient at work and spend time doing the things you love.
Mastering Decision-Making:
Probably the biggest thing I’ve learned in my career is the impact that decision making has on an organisation. Decisions come in many shapes and sizes, and learning how to recognise them and take the appropriate action is the difference between okay and great.
A company that can make a quick, high-stakes decision can gain a competitive advantage. For example, a startup that changes its offer and pivots quickly based on customer feedback, will win versus a competitor that takes months to make a change.
In today’s article, I’m going to bring some of these business lessons to personal decision making.
"It is in your moments of decision that your destiny is shaped." - Tony Robbins
When it comes to our individual productivity, the main resource we want to maximise is our time. Quick decisions reduce bottlenecks and streamline workflows, leading to increased productivity.
Time is a valuable commodity. Decisive action drives efficiency.
However, not all decisions should be made quickly. The first step in your personal decision-making framework is to assess the speed with which you should act.
- Simple Decisions (quick) - Routine, low-stake decisions with clear options should be taken quickly. For example - choosing a meeting time or submitting an expense report.
- Complex Decision (slow) - High-stakes, ambiguous decisions with multiple potential outcomes. For example - major investments or hiring new employees.
Starting by working out how quickly to decide will ensure you allocate the appropriate time and resources. Don’t spend too much time on a simple decision and waste valuable time.
Step two in the framework is assessing reversibility. You start by asking yourself, “if I take this decision, could I go back with minimal impact?” Reversible decisions should be taken quickly.
- A “Two-Way” Decision (reversible) - can easily be changed if a mistake is made and with minimal impact. For example - changing the colours of a website or changing customer survey questions.
- A “One-Way” Decision (non-reversible) - is hard or impossible to change. These should be taken with more care and by examining additional data. For example - signing a binding, three-year contract or resigning from your job.
The final step in your framework will help you make better complex decisions. If you are left with a complex, one-way decision you should use “scenario planning”. Take some time to review the potential outcomes. Consider the best-case, worst-case, and most likely scenarios. Think about potential losses versus gains and weigh up the costs involved.
For example - When deciding to move house (one of the biggest and most complex decisions we can make) you should consider many factors, including: Location - proximity to essential services, Neighbourhood - safety and community, Affordability and Value - can you afford the investment and how will the house appreciate, Property Condition - can you move in immediately or is work required, and Future - how could the local area change in 5 or more years.
"Risk comes from not knowing what you're doing." - Warren Buffett
Before you get started, there are a few common mistakes you should consider:
1 - Hesitation or Paralysis
Overthinking and delaying decisions can lead to missed opportunities, stagnation, and a loss of momentum.
2 - Ignoring Data and Relying on Gut
Making decisions without sufficient evidence will result in increased risk and biased outcomes. Be sure to try to quantify your choices wherever possible.
3 - The Impact of Bias
There are many biases that have an impact on decisions. Including confirmation and availability bias. Be sure to challenge your own beliefs and assumptions when exploring risk and uncertainty.
Now you know how to use a 3 point decision making framework: (1) Speed and complexity, (2) Reversibility, and (3) Scenario planning. You are ready to reap the benefits. Making structured decisions will lead to:
- Increased confidence and clarity - Using a framework and getting good results will reinforce your skill at taking decisions, reduce anxiety associated with them, and give you a strong sense of control.
- Enhanced problem-solving - effective decision-making will cultivate critical thinking and creativity.
- Improve success - Consistent, high-quality decision-making will lead to better outcomes, improve your reputation, and lead to career success.
"Ultimately, our greatest freedom is the freedom to choose our attitude and our response to difficult circumstances." - Viktor Frankl
Did you enjoy this issue? If you think someone else might benefit please consider sharing it with them. Also, if you have any comments or questions then I’d love to hear from you. Either email me or send a DM on LinkedIn.
Thank you for subscribing, have a great weekend, and I’ll see you next week.
Mike
