Major business decisions should not be taken lightly, as the consequences of making the ‘wrong call’ can be far reaching and long lasting. A common cause of business failure is inadequate attention to what turned out, with hindsight, to have been a major decision. So the essential starting point for major decisions is to know when you are about to make a major decision !
Examples of major decisions in business include business expansion, downsizing, new product investment, new routes to market, major marketing initiatives, business relocation, capital investments, change of strategic direction:
10 Tips on Decision Making
1. Identify ALL the options
There are usually more options or variations on core proposals than you think at first.
2. Develop Selection Criteria
Consider how different options align with your vision for the business. Make sure that long term, not just short term considerations are taken into account. Work out the small number of key considerations upon which the decision will be made.
3. List the points ‘in favor’ and ‘against’ each option
Identity all key risks and be realistic as to the extent to which each can be mitigated. Carry out ‘what if ‘ sensitivity analysis. Be realistic about the upside potential of each option.
4. Give it time
Don’t be panicked into making a decision before you have considered all aspects. Explore and work through your fears.If you don’t challenge your fears they may dominate your decision making and fear based decisions tend not to be good decisions.
5. Consult widely
…with people who have a variety of perspectives, to ensure that you are factoring in all relevant considerations. Using a Business Coach as a sounding board for major decisions can provide an extra level of assurance that you are considering all dimensions.
6. Test the validity of key assumptions
It can be all too easy to be lazy and skip this part of the decision making process. You don’t want your decision to be made on the basis of inaccurate information.
7. Consider the ‘ Do Nothing ‘ option
…but it has consequences which need to be examined. The status quo will always seem enticing, as however bad it is, at least it seems certain. Of course, this can an illusion as there is always change on the horizon, whether you realize it or not.
8. Explore your doubts
You need time to explore any niggling doubts and to become comfortable with the direction of your thinking, before finally deciding.
9. Don’t procrastinate
Remember that not everything can be known at the point of decision, you will have to accept some element of uncertainty. This is particularly a feature of major decisions.
10. Trust your intuition
How a decision feels is as important as the hard analysis.
While making major decisions can be daunting, once you decide it will feel like a load is lifted (namely the burden of indecision !). This will hopefully be accompanied by a sense of excitement at the prospect of pursuing the direction you have chosen.