When you decided to read this article, you made a decision; what made you click on the link for this article? What appealed to you the most? Such factors pushed you towards making this decision and here you are.
Well, while most such decisions that span your day-to-day life are based purely on instinct, it’s not the same case when you’re making decisions on an organizational level, where it could potentially be affecting thousands of people and the stakes are pretty high.
With that said, how should you go about making decisions in such cases? What factors to take into account? How to deal with conflicts? And what are the common barriers to effective decision-making? Well, that’s what this article is all about. We’re going to be seeing how you can effectively make such high-stake decisions in a systematic and data-driven manner.
So, in this article, we will be talking about the decision-making process in different organizations.
As far as the contents of this article are concerned, we’ll be discussing the following points in this article:
- The steps taken to make a decision
- Types of decisions as well as methods that can be adopted for the decision-making process
- What makes someone a skilled decision-maker
- Recommendations for decision-making guidebooks
Decision-Making – And How to Improve It?
Decision-making is a process in which an individual analyzes their situation and chooses what they think is the best option amongst other alternatives. It’s a no-brainer that decision-making is a very critical skill for leaders in an organization. Not only are they shaping their organization’s future, but also of everybody associated with it.
There are many techniques people employ to work on their decision-making skills. To start with, one needs to understand how important the entire decision-making process is. For example, the butterfly effect; when someone in an organization makes even a minor decision, it significantly impacts the company’s future. This means that every individual in the organization has a great responsibility and must be very mindful of their decisions. You need to comprehend the entire situation carefully before making up your mind.
The Step-by-Step Decision-Making Process in an Organization
When it comes to making big decisions that might significantly impact your organization’s future, it is better to follow certain steps to ensure that you always make the right choices after considering all the possible alternatives.
If you practice decision-making by following these steps, it will eventually become a habit. And consequently, you’ll become better at making important decisions. Before you get into the decision-making process, it’s crucial to determine who is making the decision, whether it’s an individual or a group and whether that individual or that group is fully capable of making that decision.
Here is an easy six-step method that you can put into practice to improve your decision-making skills:
- Examine the situation
- Collect all the relevant information
- List down the possibilities
- Determine which option is better for you
- Make your choice
- Learn from the consequences
Now, let’s discuss these steps one by one so you can have a better grasp of how to use them:
1. Examine the Situation
Sometimes there isn’t much to be examined, but if you look over the situation one more time or at least from a unique perspective, your mind can develop different strategies or solutions for a problem. Suppose you must make an informed decision that will impact your company’s future. In that case, it’s best to examine the entire situation thoroughly or even ask someone to investigate the problem with you as a fresh set of eyes.
While making important decisions, you mustn’t miss out on any of the intricate details. To help you decide what you need, sometimes thinking about your desired outcome also helps because then you have a better image of what you want, and it gets easier to make decisions that will help you achieve it.
2. Collect all the Information You Need for Your Research
When working in a big organization, you can’t make the right choices unless you have all the required information. For instance, if your company were downsizing, you would need all the information about its employees, their salaries, the budget division, etc. If you don’t have any of the required information or if some of the information is missing or corrupt, it will definitely impact your final decision to a large extent. Therefore, it is not only important to collect the required information, but you must also ensure that it’s all up to date as well.
3. List Down all Possibilities
Just like two plus two isn’t the only way to obtain the number four; similarly, there isn’t always one way to achieve a particular goal. There could be many paths leading to a single destination; therefore, it is vital to go through all the available alternatives. This way, you don’t end up wasting your resources and regretting the path you chose midway. Choosing a path feasible for most organization members is recommended so that nobody is left behind.
4. Determine Which Option is Better Than the Others
How do you choose which path is better for your organization’s future? Well, you list the pros and cons for each approach. Of course, you need to be sure that your chosen path has more upsides than downsides compared to those of all other alternates. You can also get help from your past experiences at this point, e.g., what helped you the last time you did something similar.
Pro Tip: Always make sure that you have at least two backup plans (your second and third best alternatives), so just in case the first one doesn’t seem to work out for you, you always have your backup plan ready instead of panicking and making the wrong choice in a rush.
5. Make Your Choice
Now, if you were merely dependent on your intuition, this would have been your first step. You would have closed your eyes and made the decision hoping and praying that it works out for you. In this case, you have your entire plan laid out in front of you, and you have logical reasoning for all your choices as well as a backup plan which in return makes you more confident about your decision.
6. Learn from the Consequence of Your Decisions
If plan A works out for you, that’s excellent; however, that doesn’t mean that you become overconfident or that every other decision you make in the future will work out. You still need to be aware of the cause that made your decision successful, so you can utilize it while making similar decisions in the future. If your plan doesn’t work out, try executing your plan B instead of giving up. You need not get disheartened by the setback; instead, you need to identify the reason for your failure and make sure that it doesn’t happen again in your plan B. Especially when you’re working in a company, instead of bashing your colleagues for making the wrong choice, you should discuss the causes for the failure with them to develop a healthy work environment.
What are the Different Types of Decisions in an Organization?
In an organization, there are three distinct types of decisions that are usually taken. Every decision can be placed under one of these three categories. This makes it essential to learn what these categories are and how to make these sorts of decisions so you don’t end up mixing one type with the other.
The three types of decisions are operational, strategic, and tactical. Let’s explore them below in detail:
These are the more straightforward decisions every employee makes as a part of their routine. For instance, if you’re working on a project and need to take some time to make it work, that’s part of your job.
These are significant decisions that must be taken by the seniors at the organization only because these kinds of decisions impact the organization overall. These seniors are responsible for making decisions to help the organization achieve its goals.
Tactical decisions focus on how things are supposed to be done around the company. For example, what process must a customer complaint go through to ensure it’s correct and can be handled?
What Makes Someone a Good Decision Maker in an Organization?
There is a criterion for everything, and decision-making is no different. There is also a criterion for a person responsible for making crucial business decisions. And without a sound bar of this criterion, it would be impossible to make sure that the decision being made is the best for the company and its employees.
Because people can often be deceptive, and they could be working for their sole benefit only. A good decision maker would keep in mind the good interests of the entire organization and keep their opinions separate from the whole process.
Therefore, before you appoint someone to make a weighty decision, you must make sure that they possess qualities such as:
- Proper knowledge about the end goal and the requirements to achieve that goal
- Patience in going over all alternatives instead of rushing to decide
- Someone who is open-minded and would happily take advice from their fellows
- Active listeners who would be willing to listen to every detail of the situation instead of jumping to a conclusion
- Good problem-solving skills and is good at identifying patterns and forming solution strategies instead of getting confused by the details.
Our Top Picks in Decision-Making Articles
6 Barriers to Effective Decision-Making (Real-Life Examples)
The Decision-Making Model Explained (In Plain Terms)
13 Reasons Why Data Is Important in Decision Making
Some Highly Recommended Books on Decision-Making
By now, if you still don’t have a clear picture of the entire decision-making process, here are some top-rated books that will further guide you through the decision-making process and what it takes to make intelligent decisions that will benefit you, as well as your organization.
1. Streetlights and Shadows: Searching for the Keys to Adaptive Decision Making (By: Gary Klein)
Rating: 4.3/5 (Goodreads)
Some people often get confused about when to go with their gut and when to sit down and think before making important decisions. Well, this book is perfect for those people because it teaches its readers how to identify various situations by debunking different decision-making myths with real-life examples.
2. Smart Choices: A Practical Guide to Making Better Decisions (By: John S. Hammond, Ralph L. Keeney, and Howard Raiffa)
Rating: 4/5 (Goodreads)
This book is the perfect guide for those who need help choosing what option is the most beneficial to them. This book uses simple terms and is entirely reader-friendly. Once you’re done reading this book, you will be familiar with the entire process of decision-making.
3. Decisive: How to Make Better Choices in Life and Work (By: Chip Heath)
Rating: 4/5 (Goodreads)
The author of this book highlights common problems that hinder a person’s ability to make good, informed decisions while working in an organization. Not only does he highlight the issues, but he has also provided several solutions that help you improve your decision-making skills.
4. Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts (By: Annie Duke)
Rating: 3.8/5 (Goodreads)
The author of this book emphasizes the idea that nothing always goes the way you plan it because every time you decide if there is a chance of it going the right way, there’s also a chance that the results could be unfavorable, which explains the title, thinking in bets. Therefore, you must learn to embrace whatever the outcome is instead of disheartening by the results.
5. The Paradox of Choice: Why More Is Less (By: Barry Schwartz)
Rating: 3.8/5 (Goodreads)
This book talks about the availability of numerous options and how it has affected our minds. It has led us to become increasingly anxious and dissatisfied with the results because we are constantly thinking about all the other options we could have chosen. The author talks about the latest studies that are being conducted to help people make the right choices.
As we wrap this article up, let’s go over some of the critical points. As human beings, we are responsible for making decisions at even the minimal steps in our lives, and for making decisions that will benefit us later, we need to keep a few things in mind. If we follow a proper pattern or a set of steps for making decisions, we can identify which path is the most beneficial for our organization.
However, it’s worth noting that, more often than not, following some specific steps is not enough to make good decisions. And the person making the decisions should also be reliable and capable of keeping their individual interests separate from those of the entire organization.