How To Make Good Business Decisions

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Do you often find yourself getting stuck when making important business decisions?

We all fall into this trap from time to time. I believe getting bogged down or stuck is part of being human.

When problems come up, it’s just too easy to get derailed. Our human biology is to avoid decisions that might carry risk and to procrastinate by pushing those decisions away. You can see this tendency materialise in an endless cycle of emails and in calling yet another meeting.

We fall back into doing what you might call research and give it some time, waiting for something to pop-up. This can turn into an endless cycle and gets us nowhere.

How do you get out of this cycle?

Let’s face it, making a decision always carries a certain risk. Nobody knows the future and predicting an outcome to 100% is not possible. For many decisions we take every day, predicting even an outcome of 50% is a rarity. That means taking decisions requires you to take risks.

Are you worried about taking risks?

You shouldn’t.

The only way to learn and get better at making the right decisions is by making the wrong decisions.

Making the wrong decision is not really the problem. It is the consequence of that wrong decision that is holding us back.

Not making a decision is most often the worst decision to make.

The easiest way to get things right is by knowing what doesn’t work – and that requires you to decide. You see the paradox?

Learning how to make the right decision

For any decision you need to be clear about the following points:

  • Am I the right person to take that decision?
  • Who should be involved in the decision process?
  • What is the core issue I am deciding on?
  • What is the expected result of my decision?
  • What is the highest impact of my decision?

Once you’ve got a grasp on this, the next step is what I call the “Rapid Decision Process”.

This process is divided into two parts. The first part is called “TCI” (Test Core Issue).

The idea behind it is to cut the large decision into smaller decisions. Then, very quickly test each one and review the result. Depending on the result, adjust the rest of the decisions.

Go for the core issues

Imagine you realize that the way you were selling your products isn’t really giving you the results you’ve expected. You’re faced with the problem to change that process. You’ve investigated several options and now you have to decide which one will be the one to use.

There is a high risk of getting it wrong. You’re already behind your target numbers and introducing a new system will take even more time and resources. This kind of decision can stop anyone. It’s a scary place to be.

If you apply the “Rapid Decision Process”, you would need to identify the core change. Which part has the most impact? Take the most important one and implement that change straight away.

Count on failure, as it will most likely fail

See it as a required learning process to make the right decision. The reason this is so powerful is because it removes a lot of assumptions we make when looking at new processes. We need to replace these assumptions with real values.

The “Rapid Decision Process” does exactly that. As soon as an assumption is replaced with real data, the picture changes. And the clearer it becomes, the easier is the decision.

I have worked with clients using this technique introducing small decision factors from multiple possible options at the same time…watching the interactions and recording the results.

In our example, we would set up different and very simple sales channels at the same time, testing each one and replacing assumptions with results. It is important to do this very quickly. It is very similar to split testing of marketing and advertising campaigns, but with this method we use the least amount of resources possible to test the outcome.

For this to work really well, identifying the core issues is very important. In our sales example the interaction with the customer is the core part of a sales strategy. That’s the part that needs testing. Not the website promoting the product or the training of the sales staff.

You need to find the core item of the strategy to be decided on.

The second part is called “DIN” (Do It Now).

It’s that easy.

Ready to go?

John Di Stefano

An entrepreneur at heart and founder of the Entrepreneur Academy in Brussels, Belgium. He is teaching and supporting entrepreneurs in the skills every entrepreneur needs to create a better life for themselves and the people around them.

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