Small Business Blog from Atlantic Canada

Characteristics of a good decision making process:

1. Understand if there is a problem in the first place. A problem occurs current results are misaligned with objectives; or if there is any deviation from the plan.
2. Define the problem. If you can’t define the problem, then you have very little understanding of the problem in the first place. Go back to Step 1.
3. Problem components - break down the problem into parts and identify the various forces at play. Every problem has constraints. Identify them. Perhaps addressing the constraints may change the nature of the problem. If it does, go to Step 2.
4. Look at the alternatives. It is important to remember not to pass any value judgments about the alternatives at this stage. Push the comfort zone of your thought process. Keep in mind the pluses, minuses and interesting points about each alternative. Then choose the most optimum alternative.
5. Devise an execution plan based on the most optimum alternative.
6. Monitor and follow-up in the execution of the plan. As you execute you will discover new information or find that the execution has changed the nature of the problem. Go back to step 1.

All too often, best practices in decision making process are thrown out of the window. There are a very few managers who take a proactive approach, especially in small businesses. It is usually reactive and hence managers do not have the time to implement a decision making process at all. We can categorize managers into three categories based on their decision making process:

1. Ready, fire, aim
2. Ready, ready, ready, aim, ready, ready, aim
3. Aim, ready, fire

Ready Fire Aim - The reactive mode

Most small business owners or managers tend to be a part of this category. The owner is too busy with all the things on his/her plate to be proactive. And of course you do not want to delegate. If you find yourself making decisions like this all the time, you may have a BIG problem on your hands. I also call such decision making “managing using emotions”. Such an organization barely survives for long. If they do, survival is by the seat of their pants. There is really no planning, no long term strategy. Act first without thinking through or even considering the risks is how I would describe these managers.

The manager can be compared to a marksman in a shotgun sport where s/he has to react to clay targets thrown into the air by a machine. In business, the odds of missing the target are more. The sad part is most of us would fall in this category. This is also true of our life. How many of us can truly say we are in charge of our lives, relationships, or our career? Think about it.

Ready, Ready, Ready, Aim, Ready, Ready …. - The indecisive mode

At the other extreme is the indecisive manager. The reactive manager at least acts. This type of manager does not even act quickly. Precious time is lost in discussions after discussions. They think too much that they end up doing nothing. It affects your subordinates and they begin to question your ability to lead. If you make this a habit, it can kill your program and demoralize your team. Such managers are typically happy with the status quo and find it very difficult to change. They may also not want to be accountable for failures and hence the indecisiveness.

The only way to get such managers to decide is to back them into a corner. They then revert to Ready Fire Aim mode of decision making. If you are such a manager and are reading this you need to change and quickly. It will kill your business and your life. Indecision leads to stress, which in turn causes health problems. The stress in turn will feed your indecision. See, you have just entered a vicious and destructive cycle. Either lead or get out of the way.

Aim, Ready Fire - The proactive mode

This is the ideal scenario. Such managers do not spend too much time gathering information, nor do they make a decision based on incomplete information that is material to the problem. Let’s face it. You can never have all the information you need to reach the ideal solution. However, based on the information you have, you can make a decision keeping in mind that you may need to alter course when new information becomes available. Before you make a decision, you evaluate the risks - and this includes risks of not having the complete information. Then you make an optimum decision.

The operative word is “optimum”. When I put “Aim” first, I meant making sure you have considered the risks involved and are prepared with contingency plans. This is called being proactive. Very few managers or small business owners think, strategize and plan.

Decision making can be an informative, fun and a great learning experience for all employees - not to mention a great motivational process. Use it to your advantage.

This is my eigth business life lesson.

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