We make decisions every single day. As we explore in this article, you'll see that some decisions are simple, others are more complex.
Some of your decisions will be so routine that you make them without giving them much thought. But difficult or challenging decisions demand more consideration. These are the sort of decisions that involve:
• Uncertainty – Many of the facts may be unknown.
• Complexity – There can be many, interrelated factors to consider.
• High-risk consequences – The impact of the decision may be significant.
• Alternatives – There may be various alternatives, each with its own set of uncertainties and consequences.
• Interpersonal issues – You need to predict how different people will react.
When you’re making a decision that involves complex issues like these, you also need to engage your problem-solving, as well as decision-making skills. It pays to use an effective, robust process in these circumstances, to improve the quality of your decisions and to achieve consistently good results.
This article outlines one such process for combining problem-solving and decision-making strategies when making complex decisions in challenging situations.
A Systematic Approach for Making Decisions
In real-life business situations, decisions can often fail because the best alternatives are not clear at the outset, or key factors are not considered as part of the process. To stop this happening, you need to bring problem-solving and decision-making strategies together to clarify your understanding.
A logical and ordered process can help you to do this by making sure that you address all of the critical elements needed for a successful outcome. Working through this process systematically will reduce the likelihood of overlooking important factors. Take this into account when making a decision:
. Create a constructive environment.
. Investigate the situation in detail.
. Generate good alternatives.
. Explore your options.
. Select the best solution.
. Evaluate your plan.
. Communicate your decision, and take action.
Let’s look at each of these steps in detail.
Create a Constructive Environment
Decisions can become complex when they involve or affect other people, so it helps to create a constructive environment in which to explore the situation and weigh up your options. Often, when you are responsible for making a decision, you have to rely on others to implement it, so it pays to gain their support. If it’s most appropriate to make the decision within a group, conduct a
Stakeholder Analysis to identify who to include in the process. To build commitment from others, make sure that these stakeholders are well represented within your decision-making group (which will ideally comprise five to seven people).
Investigate the Situation in Detail
Before you can begin to make a decision, you need to make sure that you fully understand your situation. It may be that your objective can be approached in isolation, but it’s more likely that there are a number of interrelated factors to consider. Changes made in one department, for example, could have knock-on effects elsewhere, making the change counter-productive.
Start by considering the decision in the context of the problem it is intended to address.
Generate Good Alternatives
The wider the options you explore, the better your final decision is likely to be. Generating a number of different options may seem to make your decision more complicated at first, but the act of coming up with alternatives forces you to dig deeper and look at the problem from different angles.
This is when it can be helpful to employ a variety of creative thinking techniques. These can help you to step outside your normal patterns of thinking and come up with some truly innovative solutions..
Explore Your Options
When you're satisfied that you have a good selection of realistic alternatives, it’s time to evaluate the feasibility, risks and implications of each one.
Almost every decision involves some degree of risk. Use Risk Analysis to consider this objectively by adopting a structured approach to assessing threats, and evaluating the probability of adverse events occurring – and what they might cost to manage.
Select the Best Solution
Once you’ve evaluated the alternatives, the next step is to make your decision. If one particular alternative is clearly better than the rest, your choice will be obvious. However, if you still have several competing options, there are plenty of tools that will help you decide between them.
If you have various criteria to consider, use Decision Matrix Analysis to compare them reliably and rigorously. Or, if you want to determine their relative importance, conduct a Paired Comparison Analysis to decide which ones should carry the most weight in your decision.
Evaluate Your Plan
With all the effort and hard work you’ve already invested in evaluating and selecting alternatives, it can be tempting to forge ahead at this stage. But now, more than ever, is the time to "sense check" your decision. After all, hindsight is great for identifying why things have gone wrong, but it's far better to prevent mistakes from happening in the first place!
Before you start to implement your decision, take a long, dispassionate look at it to be sure that you have been thorough, and that common errors haven't crept into the process. Your final decision is only as good as the facts and research you used to make it. Make sure that your information is trustworthy, and that you’ve done your best not to "cherry pick" data. This will help you avoid confirmation bias, a common psychological bias in decision making
Communicate Your Decision, and Take Action
Once you've made your decision, you need to communicate it to everyone affected by it in an engaging and inspiring way. Get them involved in implementing the solution by discussing how and why you arrived at your decision. The more information you provide about risks and projected benefits, the more likely people will be to support your decision.
If people point out a flaw in your process as a result, have the humility to welcome their input and review your plans appropriately – it’s much better to do this now, cheaply, than having to do it expensively (and embarrassingly) if your plans have failed.
Tip:
There are many tools and techniques that you can use as part of making a good decision. If you use them all, however, you could wind up spending a very long time making a very small decision. Pick and choose tools appropriately, depending on the nature and scale of the decision you want to take.
Key Points
Although problem solving and decision making are different processes, it is often necessary to combine them when making a complex decision.
Systematically incorporating problem-solving and decision-making tools can help you make fully-informed decisions, either individually or as part of a group. These strategies are:
. Create a constructive environment.
. Investigate the situation in detail.
. Generate good alternatives.
. Explore your options.
. Select the best solution.
. Evaluate your plan.
. Communicate your decision, and take action.
Apply This to Your Life
Next time your team has to make a decision, use these steps above to streamline the process.