When the inevitable stands in front of us, what do you do? When your business is affected by developments outside your control, what do you do? Decision-making is something we all need to learn how to do. It takes some time and practice is the key to master informed decision-making.
The opposite of informed decision-making is cognitive bias decision-making. This happens when you rely on limited or low-quality information, over-rely on past experiences and go with your gut. To reduce bias in your decision-making you follow these steps.
Frame the issue and set questions
Some issues affect everyone, like COVID-19 for example. Every business has the same question: how to continue trading and meet financial commitments so the business continues. How to adapt my production to customer need. What will stop me from reaching my customers. What is the lowest minimum my business can survive on? What is my legal obligation to employees? How will the government support my business? Also include individual questions on how the issue will affect you personally, your family, your finances, your health.
Asking the right questions early in the process provides an anchor for your thinking process and steers you to an informed decision.
Access to information differs widely across the world and here developing countries are at a disadvantage as online is now one of the main platforms for business information. Your preference for communication channels impacts what you collect. If you only follow your news feed on social media, you receive what you already expect to hear. Sourcing information from several reliable channels is important when collecting data. Usually, regulatory and government organisations are clear with their information and also provide direction where to find more. When questions are not answered by what your read, then call.
Keep in mind the issue and questions you set in the beginning and read, think, discuss, and sleep over all the data to extract what is relevant to your situation. Order the information, categorise, manipulate, and summarise it.
Even when it appears to be overwhelming at first, with the specific questions to focus on, you will make progress. Some data is relevant to more than one question, other data may identify a blind area in your original framing of the issue.
Interpretation of data should be qualitative and quantitative because you want to achieve a holistic perspective. Your business is not an island. It includes you, your customers, your landlord, your suppliers, your employees, your accountant, your family, your friends, your reputation, your future and, most important, yourself.
This means you interpret the data for business and personal impact and then set that against your own capacity to manage the issue.
Make the informed decision
Decide and move forward. You answered the questions and base your action on your interpretation of the data you collected. You made an informed decision. This is the stage where informed decision-making shows its strength as it works as a circle. When you act, another cycle of data collection starts. With the new data you analyse how relevant it is to the issue, interpret its relevance in your action plan and then decide to raise, lower, improve or discard for example.
It is important to learn how to make decisions and some learn it young, some later. The key to learning this life skill is understanding what the decision-making process entails and to practice doing it.
“Some people have been burned in the past by poor choices and decisions and are afraid to, once again, risk making a bad choice or decision. So they may do nothing hoping the change will work itself out, or go away, or that somebody else will take care of what needs to be done.”
This article includes some basic techniques on how to teach children decision-making but they are also relevant to everyone who still needs to master them.