Effective decision-making is a vital function for management and the entire organization. A well-planned business decision making process is required to make tough decisions that will impact the profitability of the firm.
There are many errors in decision-making today because there is no process in place or no clear picture of the desired outcome. Another common issue is becoming fixated with just one option. All these issues can be solved with the implementation of a sound business decision-making process. The process will help to make thoughtful and informed decisions.
Every company has a different business management style, including yours. Therefore, the business decision making process should be developed to work for the organization. However, there are vital steps that must be followed for the decision-making process to succeed. Here are the recommended steps:
1. Determine if a decision must be made
The business decision making process will depend on several factors, which is why you and your team need to identify the problem that requires a decision. The goal is to address the problem and ensure that there are no consequences, such as business losses or failure.
2. Gather research and relevant information
To ensure the decision is workable, it is necessary to undertake research and gather all the relevant information. This information provides a complete insight into the problem and critical areas that require solutions.
With specific knowledge of the causes, your team and senior management can reach a collaborative decision. Look at the problem from every angle to determine a solution as you can find the answer much quicker than you think.
3. Identify all alternatives and solutions
Before getting fixated on one option, make sure you and your team have reviewed all possible solutions. When you collect information, you and your team will identify several paths and actions to take. List down the pros and cons. You can create a decision-making matrix that can help you look at the big picture. This matrix is necessary when making a tough decision. When faced with multiples choices, a decision-making matrix can clear the perplexity.
4. Brainstorm and weigh all evidence
Brainstorming will help to challenge the decision and its solution. It will also help to have a complete understanding of the issue. Use the list of pros and cons that you created to understand which path or solution will result in the desired outcome. This step will help you narrow down your list and find the obvious solutions. Make sure to evaluate every detail of the different decisions that look promising.
5. Choose the right decision to implement
Take time to select the right decision. It is always recommended to sleep over the decision and take a few days to reassess them. Don’t be hasty to decide due to time constraints, as it can lead to risky outcomes. Time constraints can impact your judgement and therefore compel you to make a decision that may not work or can be detrimental for the firm.
In situations like this, ensure you gain second opinion, take a few hours to review the decision and gather the team for a second time to finalize the decision.
6. Take action through implementation
Successful decision implementation creates positive effects and outcomes. When you are confident that the decision is the right one, then put a plan in place to implement the solution. At this stage, you will identify the needed resources, tools, step-by-step actions and the timeline for implementation. This stage is simple when you and your team have diligently completed the previous steps of the decision-making process without cutting corners.
7. Monitor and evaluate the outcome
Most teams make the mistake of thinking that implementation is the final step. This is not the case. The next step is to monitor the implementation of the decision. There could be consequences and uncertainties to manage, including more decisions that might have to be made.
Ongoing monitoring is crucial to ensure that the decision implemented resolves the problem completely. This may mean responding to new information or challenges that crop up after the implementation of the decision.
8. Review the decision made based on the results
The decision-making process does not end at achieving the desired results. The final step is to review the decision and how well it resolved the issue. You have to see if the decision immediately solved the problem or if it needed more reassessments to come to a conclusion. Sometimes, a decision involves a cycle where more issues surface and require immediate attention.
At times, there are consequences after the decision is implemented. When you review the implementation, you will learn from this stage, which will help make the business decision making process less complicated for the next problem that needs to be solved. This final step will help you determine if you made the right decision that benefited the team and your organization.