Ultimate Guide To Better Decision Making
We make decisions every day, including which cereal we want, whether to call in sick and what TV show to record. If you’re one of those people who struggles with the smallest of decisions, then how can you make life-altering decisions? The Leading Edge Journal claims we make around 35,000 decisions each day!
Decision making is a vital part of our daily life, but many people struggle when it comes to choices that could impact the course their lives take. We’ve all heard of action and consequences, but many individuals and businesses fear the consequences of their decisions. This fear leads to poor decision making and the inability to take charge.
What is Decision Making?
In its purest form, decision making is the ability to look at many choices and pick the most logical. It involves weighing up the pros and cons and finding a conclusion. There are many skills involved in decision making, including:
— Critical Thinking
— Logical Reasoning
— Analyzing Data
— Risk Assessment
— Creative Thinking
— Teamwork
— Negotiation
— Leadership
As you can see, decision making isn’t an easy process, but it’s possible to learn how to make better choices.
How We Decide
There are some really useful tools to use when making a decision, which we’ll cover later. However, most decisions result from a complex thought process, Each step of the process is critical to ensuring you make the right decision.
Identification
The first step is to identify an opportunity, problem or gap in the market. Doing this will enable you to decide if making a decision is a worthwhile use of your time.
Information
Now you need to find information about the various aspects of the problem. Find the date and ask people for help.
Options
Think of all the options available and write them down. Considering those options will enable you to think of the pros and cons.
Outcomes
Listing the pros and cons of each choice can help you evaluate what the outcome will be.
Choice and Action
Make your choice and put the decision into action. This will involve contacting the correct people and putting your plan into place.
Assess
Never forget the importance of assessing and evaluating the consequences of your choice. As things unfold, it’s useful to make notes on what you could have done differently.
Decision-Making Tools
We all differ in the way we make decisions. Some people follow their hearts which is also known as intuitive decision making, while others use their heads. There’s no right or wrong when it comes to intuitive or logical decision making, so instead, we should try to balance the two.
There are plenty of ways to aid you in the decision-making process, including these methods which are often used by businesses.
The Matrix
No, not the movie, although this tool is very powerful. You may know it as the decision making grid or Pugh Method. This method involves making a table which lists the various options available and how each of them measures up.
After listing each point and evaluating them depending on performance, you can make a final decision based on the total score each achieves. Use this example to design your own decision-making grid.
The Decision Tree
Decision trees are complicated to design but excellent for weighing up the pros and cons of each potential choice. This data-driven approach combines logical thinking, with an analysis to show you how to use each node to make the decision. Sound way too complicated? Here’s a simple to use guide.
Thinking Models
If you’re not the type of person who uses data to make decisions, then using a mental model is probably the best choice for you. Our mental model is how we perceive the world, but we can adapt many models to think about others perceptions. Using this method will enable you to think about the outcomes and make a choice based on these models.
Most of us use mental models every day, but don’t even know it. Here are some ways to expand your mental models.
Opportunity Costs
This is the ability to remember that every opportunity costs someone else. For example, a double glazing salesman sees a potential house to make a sale. However, the owners of that house will incur a cost.
Confirmation Bias
We tend to predict outcomes based on our past experiences. For example, an individual who has suffered from abuse in the past might have a negative outlook when it comes to future relationships. Our prejudices, past teaching and other situations all contribute towards confirmation bias.
Inversion
Inversion means thinking about the outcomes you want to avoid, so it’s a reverse way of making a decision. By canceling out all negative outcomes you can look at which option offers the most positive ones.
Key Take-Away
Decision Making is a vital part of both your personal and professional life, and it’s daunting. Using the above methods will enable you to make decisions based on the outcomes they offer. Balancing logic with intuition is extremely important to ensure you can make worthwhile decisions for both yourself and your business.
About This Decision-Making Guide
This guide offers the most insightful articles, educational videos, expert insights, specialist tips and best free tutorials about decision-making from around the internet. The learning guide is split into four levels: introduction, basics, advanced and expert. You can learn at your own pace. Each item shows an estimated reading or watching time, allowing you to easily plan when you want to read or watch each item. Below you’ll find a table of contents that enables you to easily find a specific topic you might be interested in.
Types of Decision Making
Decision making is an intellectual process for selection of the best alternative from available two or more alternatives to reach the desired result. Decision-making days of several types. Various scholars have classified decision making in several categories, according to their methods, thinking and requirements.
Factors Affecting Decision Making
Every day, people are inundated with decisions, big and small. Understanding how people arrive at their choices is an area of cognitive psychology that has received attention. Theories have been generated to explain how people make decisions, and what types of factors influence decision making in the present and future. In addition, heuristics have been researched to understand the decision making process.
Reasons Why You Make Bad Decisions
While it goes without saying that you will probably continue to make bad decisions, you can gain a deeper understanding of the process behind these sometimes irrational choices. There are a number of factors that contribute to poor choices and knowing how these processes work and influence your thinking can perhaps help you to make better decisions in the future.
Making a Decision: Using Conscious vs Unconscious Thinking
We are constantly making complex decisions under conditions of risk and uncertainty — and, in our world, the consequences of a bad decision are a lot more severe than getting stuck with a car that’s a lemon for a few years. If we could improve decisions simply by replacing conscious deliberation with a brief period of distraction, it would represent a great — and essentially costless — step forward for us, and for our patients.
You Can’t Be a Wimp—Make the Tough Calls
As one of the world’s preeminent advisers to CEOs and boards, Ram Charan has spent the past 35 years on the road, watching hundreds of executives deal with their toughest challenges. He regularly shares the insights from his experiences in speeches and the classroom and is the author of several best-selling books.
Principles For Startup Decision
Applying these seven heuristics may tremendously increase your chances of success.
1. Plan less, do more. Your business plan is useless. Create a learning plan
2. Think big. Start small. If you are not getting bigger, you may disappear
3. Get a crystal-clear understanding of why people are using your product
4. Don’t fall in love with your idea. Test a lot of options
5. Understand correlation amongst variables in your business. Position the startup to be noticed
6. Pick a positioning category where the money is going and create unique value
7. Choose the right environment which is open and gives you access to capital, connections, and competence.
Steps to Good Decision Making
Decisions that seem to be the most difficult are those that require a deeper level of thought. When decision making, there are many steps that can be taken; but when making good decisions there are really only five steps that need to be considered.
Why is it Difficult to Make Decisions?
Many people agonize over decisions. Difficulty making decisions can be a sign of depression. When one is in the throes of despair, there may be a pessimistic view of reasonable options and an inability to act.
The Decision-Making Process
Using a step-by-step decision-making process can help you make more deliberate, thoughtful decisions by organizing relevant information and defining alternatives. This approach increases the chances that you will choose the most satisfying alternative possible.
Developing Alternative Perspectives For Decision Making
Look at your problems in different ways; find a new perspective that you haven’t thought of before. Brainstorming, or rapid noting of alternatives no matter how silly is an excellent discovery process.
Evaluating Alternatives
List all the alternatives together – preferably on one page. People find it easier to do comparisons if they can just flick through with their eyes. If you have more than one page then you risk people not being able to remember details as they skip between pages.
Great Leaders are Great Decision-Makers
Great leaders understand how to balance emotion with reason and make decisions that positively impact themselves, their employees, their customers and stakeholders, and their organizations. Making good decisions in difficult situations is no small feat because these types of decisions involve change, uncertainty, anxiety, stress, and sometimes the unfavorable reactions of others.
The Vroom-Yetton Decision Model
The Vroom-Yetton Contingency Model, developed by Victor Vroom and Phillip Yetton (with additional collaboration by Arthur Jago) bases decision making on situational leadership that can be used by just about anyone, regardless of rank. In other words, it suggests that the best way to make a decision is to base it on the current situation or problem; not the personal traits or style of the decision maker.
Leadership Styles of Decision-Making
Many people think that decision-making is a result of personality rather than a strategic choice. With that said, leaders need to understand that personality can’t stand in the way of making critical corporate decisions. Successful leaders can alter their approach to decision-making to accommodate the demands of diverse business situations.
Steps to Making Better Career Decisions
Throughout our entire lives, there will always be moments when we’re faced with making big decisions from choosing to go to university, taking a specific course or sticking to the same job for the rest of our career. And, they are some of the hardest choices to make considering that we spend the best part of the day at work.
Steps of the Ethical Decision Making Process
1. Gather the facts
2. Define the ethical issues
3. Identify the affected parties (stakeholders)
4. Identify the consequences
5. Identify the obligations (principles, rights, justice)
6. Consider your character and integrity
7. Think creatively about potential actions
8. Check your gut
9. Decide on the proper ethical action and be prepared to deal with opposing arguments
Avoiding Psychological Bias in Decision Making
Confirmation bias is one of many psychological biases to which we’re all susceptible when we make decisions. In this article, we’ll look at common types of bias, and we’ll outline what you can do to avoid them.
Commandments of Decision Making Under Uncertainty
A focus on simple vs. complex analyses and decisions that are based on heuristics rather than optimization runs counter to the grain of conventional wisdom across many areas, from financial regulation to environmental protection.
How to Make a Difficult Decision
As an experienced time-management coach, I’ve developed a handful of strategies for cutting down the time it takes to make tough decisions. First you need to lay the groundwork, then you can pick and choose your tactic, depending on the type of tough call you’re trying to make, and how much time you’ve got to make it.
Common Decision Making Mistakes to Avoid
But after working with scores of leaders, educators, professionals and folks from all walks of life to help them make wise and effective decisions, I think I can help you avoid some unnecessary stress and heartache the next time you face a tough decision.
Here’s a quick overview of some of the ways that leaders and work teams make mistakes when trying to tackle important decisions.
Management Decision-Making Games
Managers need to be able to make decisions that affect their entire team and they often need to make these choices in only minutes. A manager may seek advice and suggestions from people inside or outside of their team, but ultimately, it’s up to the manager to make the decision. That’s why decision-making games can be so useful in preparing managers to make these tough calls.
Decision Making Exercises
The goal of this exercise is for the whole group to hear what is most important to each individual before making any assumptions or decisions. This is accomplished by each participant having a two-minute conversation with every other person.
Analytics at Google: Great Example of Data-Driven Decision-Making
Google is a company in which fact-based decision-making is part of the DNA and where Googlers (that is what Google calls its employees) speak the language of data as part of their culture. In Google the aim is that all decisions are based on data, analytics and scientific experimentation.
Three Ways to Make Better Decisions
If you ever struggle to make decisions, here’s a talk for you. Cognitive scientist Tom Griffiths shows how we can apply the logic of computers to untangle tricky human problems, sharing three practical strategies for making better decisions — on everything from finding a home to choosing which restaurant to go to tonight.
How to Make Hard Choices
Here’s a talk that could literally change your life. Which career should I pursue? Should I break up — or get married?! Where should I live? Big decisions like these can be agonizingly difficult. But that’s because we think about them the wrong way, says philosopher Ruth Chang. She offers a powerful new framework for shaping who we truly are.
Further Reading: Best Books About Decision Making
Decisive: How to Make Better Choices in Life and Work. Written in an engaging and compulsively readable style, Decisive takes readers on an unforgettable journey, from a rock star’s ingenious decision-making trick to a CEO’s disastrous acquisition, to a single question that can often resolve thorny personal decisions.
Smart Choices: A Practical Guide to Making Better Decisions. In Smart Choices, John Hammond, Ralph Keeney, and Howard Raiffa—experts with over 100 years of experience resolving complex decision problems—offer a proven, straightforward, and flexible roadmap for making better and more impactful decisions, and offer the tools to achieve your goals in every aspect of your life.
Facilitator’s Guide to Participatory Decision-Making. This book demonstrates that meetings can be much more than merely an occasion for solving a problem or creating a plan. Every well-facilitated meeting is also an opportunity to stretch and develop the perspectives of the individual members, thereby building the strength and capacity of the group as a whole.
Thinking, Fast and Slow. In the international bestseller, Thinking, Fast and Slow, Daniel Kahneman, the renowned psychologist and winner of the Nobel Prize in Economics, takes us on a groundbreaking tour of the mind and explains the two systems that drive the way we think. System 1 is fast, intuitive, and emotional; System 2 is slower, more deliberative, and more logical.
Further Learning: Best Courses About Decision Making
Decision-Making and Scenarios. This course is designed to show you how use quantitative models to transform data into better business decisions. You’ll learn both how to use models to facilitate decision-making and also how to structure decision-making for optimum results.
Data-driven Decision Making. In this course, you’ll get an introduction to Data Analytics and its role in business decisions. You’ll learn why data is important and how it has evolved. You’ll be introduced to “Big Data” and how it is used. You’ll also be introduced to a framework for conducting Data Analysis and what tools and techniques are commonly used. Finally, you’ll have a chance to put your knowledge to work in a simulated business setting.
Effective Problem-Solving and Decision-Making. Learn how to use analysis, synthesis, and positive inquiry to address individual and organizational problems and develop the critical thinking skills needed in today’s turbulent times. Using case studies and situations encountered by class members, explore successful models and proven methods that are readily transferable on-the-job.
Problem-solving and Decision-making Strategies. This course gives you exactly what you need to improve your problem-solving and decision-making habits. It gives you models and techniques that you can use in real life professional and personal situations.