Tips on Decision Making

Stop Making Decisions That Waste Time and Money

Many managers rely on gut instinct to make important decisions, which often leads to poor results. On the contrary, when managers insist on incorporating logic and evidence, they make better choices and their companies benefit. Here are three ways to introduce evidence-based management at your company:

• Demand evidence. Whenever anyone makes a compelling claim, ask for supporting data. Don't take someone's word for it.
• Examine logic. Look closely at the evidence and be sure the logic holds up. Be on the lookout for faulty cause-and-effect reasoning.
• Encourage experimentation. If you don't have evidence, create some. Invite managers to conduct small experiments to test the viability of proposed strategies and use the resulting data to guide decisions.

  

Three Tips for Making Trade-offs

Every important decision inevitably involves a trade-off. Knowing what you can't pursue is as valuable as articulating what you will. But how do you know which trade-offs are acceptable and which are losing propositions? Here are three ways to help make the distinction:

• Get input on pros and cons. List advantages and disadvantages and ask others for their perspective on which carries the heaviest weight.
• Balance short term with long term. Determine what you'd be willing to give up in the long run for some important short-term gain — and vice versa.
• Gauge support. While weighing alternatives, think about who will support a particular idea and who will oppose it. Ask whose support you can live without, and whose backing and buy-in you absolutely need.

Schedule Time for Second Guessing

Questioning whether or not you've made the right decision can be a useful way to make sure you're on the right track. But if you second guess yourself at the wrong time, you may feel tempted to give up on important commitments. Don't question yourself when you are most vulnerable. Instead, schedule a time to review your decision critically when you are in the right frame of mind. For example, don't wonder whether you should abandon a plan to talk more during meetings when you are walking into the conference room. Rather, tell yourself that you will question the decision ten minutes into the meeting, once you've had time to get used to the idea. Setting a time will also help you second guess once rather than nagging yourself with doubts.

 

Avoid Three Common Decision-Traps

Making decisions is your most critical job as a leader. The more high-stakes a decision is, the more likely you are to get stuck. Here's how to avoid three of the most common traps:

• Anchoring. Many people give disproportionate weight to the first information they receive. Be sure to pursue other lines of thinking, even if the first one seems right.
• Status quo. Change can be unsettling and it's easy to favor alternatives that keep things the same. Ask yourself if the status quo truly serves your objectives and downplay the urge to stay in your current state.
• Confirming evidence. If you find that new information continually validates your existing point of view, ask a respected colleague to argue against your perspective. Also try to avoid working with people who always agree with you.

Rely on Others to Improve your Judgment

Reversing a decision that isn't working out can be a painful experience. Perhaps the product you launched isn't selling, or an ad campaign that you were behind is falling flat. Whatever the issue, accepting failure and changing direction can feel like a comment on your judgment. In these situations, call on others to help you evaluate and redirect. Ask people with a variety of perspectives — peers, direct reports, customers, family — to give you input on what went wrong and what to do now. The collective wisdom of this crowd can turn a bad situation into a winning one. Reversing a decision shouldn't be a reason for shame, but a badge of honor in that you lived and learned.