Three steps to making better business decisions

Have you ever wondered what made Apple, Virgin, Facebook and a myriad of other companies so successful? Ultimately, it can be traced back to a series of decisions their leaders made. Richard Branson decided to use a quirky brand name and put it on everything he does and so the Virgin super-brand was born. Steve Jobs decided to develop both software and hardware within his computers which has given Apple a massive edge and a loyal following. And Mark Zuckerberg choose not to charge Facebook’s users and so rapidly built a viral phenomenon.     

The art of making effective decisions is key to business success. There may be a million reasons that may contribute to the rise or fall of your business, but ultimately, it’s not about what happens to you, it’s how you react.

Choosing to be in business is choosing to be a prolific decision maker. Your business started with a decision but that is only the beginning. It’s my view that everyone can learn to be a successful business person or entrepreneur by understanding the science behind making effective decisions – a specially developed methodology I call Decisionship.

Decisionship is making faster and better-informed decisions, without the angst. Mastering Decisionship means understanding the three components that contribute to both good and bad decision making:

1.    Speed – How fast or slow do you make decisions?

Being too fast or too slow in your decision making could hold your business back. Imagine working for a boss who makes decisions too quickly or who makes a decision only to subsequently change his or her mind. It can be really frustrating for employees, partners and investors.

Making decisions too quickly can be inefficient and erodes your credibility, as you don’t always do what you say you will do. Equally frustrating, however, is someone who takes too long to make decisions. I’m sure we can think of a bad manager or boss who falls into this camp as well. They hesitate like the proverbial rabbit caught in the headlights as if the decision needs time to mature – to let you sweat out a result before they can honour you with an answer.

2.    Information – How much information do you need to decide?

There are two ineffective extremes when it comes to be being informed. You might have a leader who will go to the ends of the earth to gather information, proclaiming that they need more ‘data’. It might cause them to miss the decision window entirely! Data is certainly useful but decision makers need to watch out for information overload –which only makes decisions more difficult.

On the other extreme, is the ill-informed decision maker. This is demonstrated by leaders who have a disregard for facts, jump to conclusions or only rely solely on their ‘gut’ or ‘instinct’. Having your head in the sand is clearly not a great approach. Many entrepreneurs fall into this decision-making habit when it comes to their financials. They often do not have enough accurate data about what they can afford. This keeps them in the dark and often sends them broke in the process.

3.    Angst – How stressed do you feel about the decisions you make?

When it comes to decisions, there are entrepreneurs who are cavalier and those who are overly anxious. Both can be a problem. Cavalier or flippant decision-makers often use bravado as a mask for denial. They turn off their ability to emotionalise decisions, which leads to decisions make without enough foresight or thoughtfulness for the consequences. On the other extreme, business leaders who are overly worried about the consequences rarely make the best decisions. You might suffer from pre-decision angst in which you run the decision over and over in your mind, too scared of taking the wrong step. Others might take the safe route, which is often counter to entrepreneurial success.

There is also post-decision angst where the decision maker frets over whether they made the best choice rather than accepting it and moving on. It’s debilitating for a business as you are bound to miss opportunities ahead of you if you are always looking backwards.

Good decision-making is about creating a balance between these three factors. Making decisions quickly isn’t always better. Getting depth and breadth of data doesn’t always lead to better decisions than those made with enough information. And angst might be your intuition guiding you in the right direction.

Everyone makes decisions differently. By paying attention to your unique decision-making profile, you can improve your decisionship and accelerate your business, without stressing yourself out.