Effective decision making is not only the province of entrepreneurs, but also the lifeblood of successful businesses. After all, your choices either build a strong operation and fuel its growth — or they don’t.
The basic tenets of good decision making get discussed frequently. Here are some other powerful techniques that can help you get better results from your decisions.
Cast a Wider Net
It’s a big mistake to make an “either/or” decision — should I or shouldn’t I? — when other options exist. That’s because seeing issues in black and white encourages you to develop only one solution to a problem and, if it doesn’t pan out, you’ll have to scramble to find another (and perhaps later, another).
Instead of limiting yourself to one course of action, come up with various scenarios. This allows you to make more subtle, nuanced choices. For example, you can choose a course of action that steers you away from the worst side effects or that best synergizes with your other business activities.
You also tend to get better results when you explore many possible solutions and outcomes before making a decision. Considering multiple alternatives simultaneously helps you to understand the situation in greater depth and recognize all the different ways that responses may vary.
In practice, this means: asking employees and others to look into several possible solutions, not just one; pricing out various potential products, services, and vendors; and working out the pluses and minuses of different plans instead of going with your initial idea and waiting to see whether it will get you where you want to go.
Follow Others’ Successful Leads
Why reinvent the wheel? Whenever you’re facing a problem or an opportunity, you can often find great value in the success of others. Notice — and study — how your peers and competitors have already responded to similar problems or opportunities.
Look for analogous examples across industries, time frames, scale, and problems, too. A bottleneck in one situation can often be opened up by a solution that was developed for a far different one.
For example, after its delivery trucks were habitually delayed for hours at one particular receiving company, a shipping company discovered that no one was giving the receiving company advance notice of when each truck would arrive. A simple phone call providing the next truck’s arrival time allowed the receiving company to clear a loading dock and have a crew ready to starting unloading each truck as soon as it backed into place.
A small business owner learned of this bottleneck solution and applied it to her own refurbishing department, which became backlogged whenever too many products were returned for attention. By requiring customers to obtain a “Return Authorization Number” for defective products and then tracking inbound returns, the refurbishing department gained enough information to adequately staff up for each week’s workload.
Take a Longer View
Entrepreneurs can get so wrapped up in increasing their results for the current or coming quarter that they fail to think about what effect their actions will have in subsequent months or years. Basing your decisions on the near-term only can force you to make less than ideal choices down the line.
Generate better results for your small business by looking farther ahead. Before you take an action, consider what its impact will be in the coming weeks, months, and years. For example, if your small business experiences seasonal demand fluctuations, you may be comfortable hiring temporary workers to bump up production rates during busy periods. But each new crew of temporary workers requires training time, and may also waste raw materials and reduce production quality so much they actually cost your business more than you’d pay several permanent employees who work variable hours throughout the year.
Consider the Downsides
Many entrepreneurs fall in love with their first idea, after which they merely seek its validation. One way to get better results from your decisions, however, is to consider its weaknesses. What could go wrong if you put it into action? How could the entire concept fail?
Looking for potential pitfalls not only gives you a fuller picture of what you’re stepping into, but also helps you avoid the all-too-common situation where the cure turns out to be worse than the disease.
The decision to hire a new crew of temporary workers for each busy season, as in the previous example, might seem ideal when you consider only its positive aspects. When you look for potential problems, though, you might well recognize the extra expenses and problems that untrained, transient workers are likely to introduce.
Prepare for Problems
No matter how well you make decisions, you’re bound to misstep now and again. Use the potential downsides of each decision you implement to set up early warning systems and to prepare to take remedial action.
For example, if your small business gets customer complaints about long hold times on the telephone, you may address the issue by asking your team to put people on hold after they quickly acknowledge the new caller. But if you’re not alert to the possible fallout from this problem, you could be angering even more customers — including those who were previously served without such interruptions.