One of the most critical skills of every leader or entrepreneur is the ability to make decisions, yet that's also the most challenging skill.
We are often forced to make decisions with incomplete or inaccurate information; under tight time constraints; within the context of uncontrollable environmental conditions, as well as the uncertainty of impacts and outcomes.
While there are many kinds of complex decision-making models available, here are four simple things that everyone can do to improve their decision making skills.
1. Remove the emotion.
While this seems to be obvious, the truth is that many people make snap decisions driven purely by their emotions. Despite the fact that psychological research suggests that the quality of decisions is inversely proportionate to the level of emotion. The higher the emotional level, the more questionable the quality of the decision.
For example, removing emotion from the equation is the primary rationale to preplanning funeral arrangements for loved ones. Separating the grief and sadness that's naturally associated with the passing of a family member and the numerous, and often expensive, decisions regarding internment and memorial options makes sense.
This is a transferable skill that has direct application to business decisions.
2. Seek trusted advice.
Teams make better decisions than individuals. I have personally avoided professional and financial disasters on several occasions by simply asking individuals I respect and trust for their advice regarding critical matters.
This might be the single most powerful decision-making tactic available to leaders.
3. Write a weighted list.
When big decisions need to be made it's a useful exercise to draft a "pros" and "cons" list for the available options. However, an even more effective tactic is assigning a weighted value to each decisional criterion as well.
For instance, if you're considering a new market to potentially enter, list as many variables under the respective "pros" and "cons" columns (e.g. up-front investment, competition, growth potential, ROI, risk...etc.) and then assign a value for each variable on a 1-to-5 scale based on the variable's respective importance to you. A low number equates to low importance, a high number to high importance. Simple.
Once each variable has an assigned weighted value, total those numbers for the "pros" and "cons." In my experience, 99 percent of the time there will be a clear difference in the summations that can serve as a heuristic tool. If both columns equal each other, take a break, come back later and add a few new variables to mix and redo the exercise.
It's not perfect but it's useful at providing structure and prioritization to the most important aspects of a critical choice.
4. Act like a consultant.
One of the benefits that an outside consultant brings to an organization is the ability to bring a "fresh pair of eyes" to a situation or problem.
Leaders can apply that exact tactic when making key business judgments by re-positioning themselves as an impartial observer.
This simple effort to independently evaluate a situation, recast a problem or re-frame circumstances can help provide new perspectives that vested participants may have looked past previously---at a fraction of the cost of hiring an actual consultant.
When it comes to making decisions, perhaps the best model can be summed up in this quote from U.S. President Teddy Roosevelt:
"In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing."