When Stakes Are High-How to Make Better Decisions

We are faced with thousands of micro-decisions daily…what to eat, where to park, whether to stop and get coffee…

Then, there are stop-and-reflect decisions that take more contemplation…where to go on vacation, how to juggle family time with a current big project, when to get that new car…

And finally, there are high-stakes decisions. Those “bet-the-company” decisions that require careful consideration, weighing impact to the immediate and future state of the enterprise.

In this last case, how do you decide what is gambling and what is calculated risk?

How do you make sure you have everything you need in order to take action – and how do you prepare for this?

Often, we base our decision-making on previous experience – ours and those of others – and what has worked in the past. Or we gather our executive team together because they embrace the vision and culture of the company, and we thus use the collective brain trust to come up with solutions we feel are best.

But there are dangers in using one or the other of these approaches by themselves, even though this is how most executives arrive at “bet-the-company” solutions. And unfortunately, making a wrong move might set your enterprise back significantly.

How do you make sure you have what you need in order to make a best decision for the company that will lower risk and maximize return?

Here is a checklist for good decision-making with some practical tips you can use right away.

1. Be sure your brain is functioning at top capacity.

Your days are filled with meetings, phone calls, and other interactions that require non-stop information download. However, your brain has little time to process all this so that you can integrate and use the information into situations where it would be helpful.

Be sure you take a minimum of two 10-minute breaks daily where you literally sit and do nothing, allowing your thoughts to wander. When you do this, you permit the brain to process what it has been fed so that it can apply the information.

2. Identify the real problem before coming up with options.

Be sure you separate issues from root causes.

For example, if you are weighing whether to reorganize, why are you doing so? And what is underneath that?

Get to the root cause to be sure you are addressing what really matters. For more, see my article on Toyoda’s 5 Whys.

3. Keep the bigger picture in mind.

Remind yourself of the vision and revisit your organizational goals and objectives before considering solutions. This will provide a solid framework of reference as you go into brainstorming mode.

I have seen many an enterprise run after a shiny object because the competition is doing so, without fully considering whether it makes sense for the vision, mission, values, and key objectives.

4. Be smart in gathering research.

You will want to consider best information and multiple perspectives. Identify best sources as you gather information, and develop a set of questions that shed light on lessons learned.

Play the devil’s advocate and include information that argues against popular practices.

And as you reach out to tap into the wisdom of others, involve only those key stake-holders/best thinkers that can put aside personal agendas and undue influence because of the personal relationship they share with you. Invite those who aren’t afraid to get creative and to think outside the box.

5. Shine light on your assumptions and biases.

Write these out so that you can ask yourself how much these are interfering with your best thinking. This will be especially helpful as you gather to brainstorm with others on the short list of potential solutions.

Articulating your assumptions and asking others to do the same as you meet together to discuss will help surface potential hidden roadblocks to bigger thinking.

When a company becomes focused on one magic answer, it can distort a greater perception of reality. If the executive team heads down this path with such a flawed mindset, it will become arrogant and defensive to other ideas outside of its own. This can eclipse answers that bring greater return on many levels.

6. Keep your eyes on the horizon as you weigh risks and impact to support short- and long-term goals.

If you find that you or your team become granular before completely assessing business impact at the organizational level, stop and regroup.

If people jump into problem-solving mode at division and individual levels, they may be inadvertently blocking a best answer. If you or a colleague begin making comments like, “We’d have to shut down the XYZ division if we did that, and this would cause a loss of LMNOP,” or, “Well, if we do that, James will quit and we don’t want to lose James!” then you need to table those.

Once you come up with answers providing best and greatest impact to the company as a whole, the next line of questioning involves examining what this would impact – and if there are alternative solutions to what seems apparent.

Further, you might find that you are allowing certain personalities or pet divisions to dictate strategy – a deathly path.

7. Don’t forget to factor in the cost of indecision.

Very often, the plethora of ideas that come to play can be overwhelming. Be careful not to allow the process to trail out too far.

Many a top executive has tabled a critical situation for so long that the costs associated with inaction have been irreparable. K-Mart, Borders, and other companies that decided to wait come to mind.

If you are in a first round of brainstorming discussions, collectively agree on a deadline by which you want to target a best solution. Reverse-engineer meeting times from there, and be sure you have someone track the discussion with notes so that you can drive a powerful agenda going forward each time.

And a last word…

• Good decision-making requires that you rely on intuition and experience while remaining open to new ideas.
• It asks that you involve people in the process who are not afraid to get creative while keeping the company’s best interests at the helm.
• And It demands courage and fortitude to do the right thing once you have made your decision.

I’d be interested to hear about your current decision-making process and how it is working for you!

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