Unfortunately, many entrepreneurs don’t realize that taking faster, better decisions in business on what they should do is more important than what they actually do. Making quick better decisions is a skill that needs to be developed to be successful in business or anywhere else.
Most entrepreneurs focus on perfecting or prototyping whatever they do before critically thinking through the goals to achieve. Be it building a great product, assembling a great team, provide great customer service. Every goal needs quick & better decision making to drive action.
Decide On the Decision
Decision making in business has long been more art than science. In part, that is because most entrepreneurs are relatively making decisions based on gut feeling rather than critical thinking.
Decisions should be made on the data and information you as an entrepreneur have. Jumping to conclusions without using your knowledge and experience with just data would information is dangerous. Analyze the options you have at hand and then decide on what decision you have to make.
Be creative and come up with as many decisions you can come up with. So that at the later stages, you can filter out the ones that fits your core values and decide on what decision to make.
Identify the Obstacles
As people, we all have taken decisions and then rationalized it with reasons that suits us later. Agree or not, we all fall for the trap of cognitive biases often than we accept which distorts our perceptions and affects the decision making abilities.
Also focus on the credibility of the data and information you have. Examine, if they are from trusted sources and there are no mistakes. Accommodate for margin of error and the effect it can have on your decisions.
One of the most dangerous obstacle as an entrepreneur we can face in the decision making process is making emotional decisions. Yes, emotional decisions can give you high rewards as exception but they have the potential of high risk. Try to identify these biases and emotions to make better decisions.
Set Deadlines to Make Decision
What would happen if no decision is made? The answer to this question is most often catastrophic failure. A decision has to be made fast, sitting idle hopping for things to change have done more harm to me. Sure, you can take a pass at any new opportunity that might come your way. But, that decision should be made, instead of postponing or not taking a decision.
Set a deadline to make a decision, which will force you to take one if it does not come with one. For example, consider you have debt at a high interest. You have to decide on how you’re going to repay it ASAP rather than later. Indecision here will cause you financial loss and more. Hence, make sure to set deadline to ensure you make a quick decision.
Assess The Risk and Rewards
Assess the risk and rewards for every decision you have with you. Depending on your goals and risk appetite make decisions accordingly. Let’s say, you have enough war chest to buy that new technology from the previous profits that you have made. In case of failure you lose the invested money, if your right the company can grow many folds. What would you do? Of course you should invest. But, if the failure would erase your capital, you would find a balanced decision to offset the risk.
Identify potential downsides for each alternative. Make the best balanced choice. Having clearly identified the value and the risks each alternative poses, you’re now better prepared to weigh the potential gains against the potential risks.
Risk of Making Wrong Decision
Only with time and experience will an entrepreneur be able to take good decisions most of the time. Plan for the eventuality of making wrong decisions. It might happen due to a misjudgment of factors beyond your control.
Make decisions accounting for the ability to reverse the decision if things don’t turn out well after you make your decision. Make a backup plan to minimize the impact of failure if a downside occurs in a decision you make.
Making Better Decisions
Your goal is to work towards decision effectiveness. Estimate the value involved in each decision, and focus on those with the highest impact and value. Take the help of others while taking bigger decisions of high impact and encourage your employees to decide more on less risky day to day decisions.
Build a decision making framework. The objective of taking faster, better decisions is to drive action. Build the right team to implement the decisions to get the job done. Constantly focus on making decisions quickly and execute them effectively.
Follow Up On Your Decisions
Always make sure, your following best practices in making better decisions and keep close track of progress. People often forget to check in when decisions are going poorly, missing the opportunity to make corrections and learn from what’s happened.
No company can reach its full potential unless it makes good decisions quickly and consistently and then implements them effectively. Applying some structure to the way you make decisions can make a huge difference on your business’s path to success.
Do you know any other steps to make faster, better decisions as entrepreneurs? Share them on Trdinoo for others to learn and please share us with your friends and network.