Use a systematic process to make optimal decisions.
Despite a glut of research on all facets of decision making, decisions often fail. In fact, one source claims a decision failure rate of 50% – effectively no better than chance. (Source: “Principles of Management, v.1.0,” Carpenter et al.)
Most day-to-day decisions, often including operational decisions (e.g. What should we say to customers about our new product?) and tactical decisions (e.g. How should we market the new product line?) are not important enough to undertake a thorough rational analysis.
However, in the case of strategic decisions (e.g. Should we merge with another company?), as well as important operational and tactical decisions, a thorough rational analysis is called for. When coupled with an understanding of our inclinations toward irrationality – and tactics for avoiding those judgment traps and biases – it gives us the best opportunity to arrive at an optimal decision.
Impact and Result
In order to become effective decision makers, leaders must be reminded of how to take a structured approach to decision making to drive stakeholder buy-in, reduce bias, manage groupthink and analysis paralysis, and drive overall decision consistency.
Thorough training on decision making will enable managers to realize greater decision making success – and this easily translates into significant business outcomes.