Developing decision-making skills

Decision-making skills: From simple to complex

career-development-1080x720pxDecision-making involves choosing an answer to a question or problem. We all make many decisions daily in our professional and personal lives.

Decisions, though, vary in how “tough” they are to make. Some have various factors to consider and potential outcomes to evaluate. Others affect people beyond the decision-maker. Decisions that generate emotion or must be finalized quickly are often among the most difficult.

To illustrate, consider the daily decision of what to pack for lunch. If leftover pizza or a turkey sandwich are the only two options available in your fridge, you select one over the other.

The choice isn’t particularly impactful (except maybe to your waistline), and co-workers likely do not care because they aren’t eating it.

But what if your boss puts you in charge of catering a fancy business lunch? You’ll need to consider where to order from, what type of food participants will enjoy, how much to spend, and if anybody has allergies or dietary restrictions.

The decision you arrive at has many implications. It could affect your company’s image, attendees’ happiness, or job security.

Decision-making skills assist in constructing alternatives, evaluating these options, and arriving at conclusions. Let’s look at the decision-making process and techniques for making sound decisions.

What goes into making effective decisions?

To make better decisions, people often follow a series of steps to illuminate potential courses of action and the pros and cons of each choice.

  • Problem identification and definition

A clear understanding of the issue at hand enables the generation of possible solutions on target.

  • Information collection and analysis

Seek out relevant data and expert input. After you gather information, take a hard look at what it suggests.

  • Option generation

Brainstorm alone or as a group. Different perspectives reduce biases and encourage innovation. Lay out all the possibilities.

  • Evaluation of alternatives

Weigh the pluses and minuses of each option.

  • Decision selection

Choose the best decision among the possibilities.

  • Implementation and monitoring

Put the decision into action. Track its progress. Tweak or return to the drawing board as necessary.

Types of decision-making abilities

Don’t think of good decision-making skills as a single entity. Instead, becoming a decisive decision-maker involves possessing a range of competencies, such as:

  • Problem-solving skills (identifying obstacles and ways to overcome them)

  • Critical thinking (analyzing information and applying it to the situation; questioning assumptions)

  • Logical reasoning (thinking things through in an organized, fact-based manner to make an informed decision)

  • Creative thinking (going beyond what quickly comes to mind to generate novel ideas)

  • Emotional intelligence (seeing information or possible outcomes from other people’s shoes)

  • Time management (attending to the timeframe available to gather information, generate and evaluate options, and reach a decision)

  • Leadership skills (stepping up to make quick decisions in emergencies; helping team members work together to arrive at a group decision)

Intuition and decision-making

Many people also consider intuition important to effective decision-making. Some think of it as a gut feeling about whether a decision is right or wrong.

Realize, though, that what gets labeled intuition can arise from more than just an unexplained leaning toward one choice over another.

Past experiences, for instance, come into play. Actions that succeeded or failed in the past weigh into our viewpoints, whether we consciously think about them.

Likewise, values factor into the equation. Our individual core beliefs, as well as those internalized as necessary to the company, influence the options we generate and what we ultimately decide.

Business decisions and their importance

Organizations face decisions at every turn. Leaders, workers, and other stakeholders want to make the best decisions possible for the company to thrive. Poor choices can result in time and money loss, missed opportunities, and even business failure.

While choices that need to be made vary by workplace, some big decisions are commonly faced by most organizations. These include:

  • What products or services to offer

  • How to budget money among departments or projects

  • Who to hire

  • Compensation structure

  • How to retain workers or keep them engaged

  • The company’s core values

  • How to attract and retain customers

  • Company policies

  • How to maintain competitiveness

  • What image to present and how to build that reputation

  • How to improve company culture, diversity, efficiency, etc.

  • What professional development initiatives to invest in

  • What type of work arrangements to allow

Of course, a multitude of more minor decisions come into play. A supervisor may need to figure out who on staff would best work with an important new client. An administrative assistant may need to decide how to rearrange her day after a manager puts an extra task on her plate. The tech team may need to decide if upgrading software is in the company’s best interest.

Because there are so many decision-making scenarios, wise companies seek out employees with strong decision-making skills and offer training to improve these skills.

Who determines the outcome?

Individuals do not always agree about the best alternative for a given situation. Still, a “final word” needs to be reached. Standard methods of concluding include:

  • Consult method

Experts, team members, stakeholders, and other relevant people offer helpful input such as data, opinions, and options. However, only one person assumes responsibility for the final decision.

  • Command method

In this method, one person decides the outcome without seeking ideas from others. When a quick decision is necessary, the command method takes less time than other ways.

Individuals may use this method to make personal decisions that affect their well-being only. Authoritative leaders often favor this style to maintain total control.

  • Voting

In this method, the majority rules. The group decides, and the option with the most support becomes the course of action.

  • Consensus

All group members making the decision must agree to reach a consensus. Ironing out a conclusion that all support often proves very time-consuming. However, all participants are more satisfied with the ultimate course of action.

Empowering workers

Employees confronting decision-making situations face various concerns. Foremost, of course, they want to make the best decision. The success or failure of the choice reflects on them and has consequences for the employer.

Sometimes, though, workers hesitate to make decisions. They fear stepping on toes and wonder if they are skilled enough to generate solid possibilities and select among them.

Wise managers realize the importance of team members boosting their decision-making skills. They clearly outline what situations workers can handle independently and what decisions need input or approval from management.

Employees taking charge of certain decisions saves the manager time. Such control also generates greater self-confidence and job engagement as they take more responsibility for company actions and success.

Tools and techniques

Individuals and organizations alike employ various methods to make decisions. Some are relatively simple, others quite complex. Some utilize pencil and paper; others use decision-making software.

One of the most basic ways to go about decision-making is generating a list of possible solutions. Under each potential choice, note the pros and cons. Then, evaluate all the options and select a course of action.

Business decisions commonly involve a multitude of factors and input. Leaders might opt to use one of the following decision-making aids:

  • Decision trees

A decision tree is an effective way of mapping out possibilities and their consequences. Think of it as a flow chart containing three main parts:

  1. Root: The objective or “big” decision

  2. Branches: Stems coming out of the root via arrows that show different options

  3. Leaves: Attached to the ends of branches to present a fuller picture of a given option, such as success rate, costs, benefits

The decision tree can contain as many branches and leaves as decision-makers generate. A basic template makes filling in a decision tree simple, organized, and visually helpful.

  • SWOT

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. Each of these four things to examine has its square. Together, they form a matrix that helps decision-makers organize their decisions.

Suppose leaders are debating whether or not to offer a new service.

Under Strengths, jot down what’s already working. Consider what the company does well, what customers like about us, and where the organization outperforms competitors.

Weaknesses involve asking the same questions in reverse: Where are we underperforming? How is our competitor doing things better? What resources do we need that we currently lack?

The Opportunities box considers where the company could go and contains possibilities for better outcomes. What might that new service offer the company, such as raising customer satisfaction or increasing profits?

The Threats category contains potential problems. Might market conditions change? Are new competitors entering the industry? Might we be spreading ourselves too thin?

With all this information in visualized form, decision-makers can examine the entire picture, evaluate it, and decide what to do.

  • Cost-benefit analysis

As the name implies, cost-benefit analysis involves weighing potential rewards against associated costs. If the rewards outweigh the costs, the decision is feasible.

Cost-benefit analysis contains five parts:

  1. Purpose: Defining goals and scope

  2. Costs: Gather relevant financial data and assign numerical worth to intangibles such as morale, customer satisfaction, etc.

  3. Benefits: Identifying monetary gains, satisfaction, safety

  4. Compute: Subtracting costs from potential gains

  5. Recommend: Implementing or rejecting a solution based on the computation

Companies mainly use cost-benefit analysis to assess the financial viability of a task, project, or change. Note that just because the numbers are positive does not immediately signal acceptance. Many solutions can have positive potential, and all cannot be implemented. Leaders must consider what fits with overall company objectives.

The dangers of underthinking decisions

Some people make very quick decisions. Such decisiveness proves helpful in situations that demand immediate action.

A team member suddenly cannot represent the company at a recruiting fair because of illness. A manager must think quickly about whether or not to send someone in her place and who would be the best choice.

However, rushing fast into decisions is not always necessary or desirable. Pitfalls of not taking proper time include:

  • Overlooking or ignoring critical data

  • Limiting creativity

  • Not receiving sufficient input from experts or those with other perspectives

  • Failing to think about consequences

  • Regretting outcomes

Difficulty making decisions

Conversely, decision-makers sometimes take too long to make a choice. Indecisiveness has its potential risks, such as:

  • Missing out on opportunities

  • Frustrating others in need of your decision

  • Looking wimpy or incompetent

  • Increasing your anxiety

A person experiencing difficulties making a decision may suffer from analysis paralysis. This term describes overthinking or overanalyzing choices to the point of being unable to decide.

At the root of analysis paralysis is the fear of not making the best choice. Too many options and variables contribute to this helpless feeling.

Also, individuals suffering from imposter syndrome may believe they are not qualified to make the decision. Their hesitancy comes from the fear of being “found out” or appearing stupid.

3 tips for faster decision-making

What might those who regularly experience difficulty making decisions do to move along the process? Try these things:

1. Avoid decision fatigue

Each person only has so much mental energy. Try to give that attention to important matters. Tackle one problem at a time.

Consider delegating trivial decisions. (Does it matter where the new office plant goes?) Limit the number of daily decisions you need to make. (Put five shirts in a row in your closet. Grab the first one each day rather than debating what to wear.)

2. Set a deadline

Develop and stick to a decision-making timeframe. Allow a certain period for brainstorming and information gathering, another for analysis, and a last one for finalizing a decision. No extensions.

3. Get comfortable with making mistakes

Finally, realize that humans cannot completely predict the future and outcomes. Everyone experiences feelings of “I wish I would have chosen.” Accept imperfection and look for ways to learn and grow.

More resources:
Crucial HR KPIs you need to make data-driven decisions New tab icon
Digital age workplace: Why soft skills matter more than ever New tab icon
Talent shortage: Addressing the growing gap in the workplace New tab icon

Want more insights like these? Visit Beth Braccio-Hering’s author page to explore her other articles and expertise in business management.