We often take for granted our ability to make decisions. We make 100's per days and not only do we not think about how we make them, we rarely, if ever, get trained how to decide!
We need to develop our decision making skills. To do this we need to use a system with which we make decisions, we need to build a team of topic experts who we can rely on and we must be able to segment decision types.
Some decisions can be a 'gut call' based on instincts hones over the years of experience of similar situations. However, be warned, an instinct that is without the relevant skill or experience, is a guess! In this situation, don't be fooled if the decision turns out to be right. That is not a sound decision, it is luck, and everyone's luck runs out at some point!
Other decisions need to be more considered, they may involve data gathering, analytical insights, research and even market testing. But again a warning, in this segment beware of Analysis Paralysis, where there is so much data that no decision is ever made. Decision making is both an art and a science, neither one can dominate the other.
A Decision Making system can be as simple as two questions.
By making this decision will I move closer to achieving my/our goal (this goal could be a personal goal, a business objective or a sporting ambition).
Am I doing what is best for my team, family or friends.
A good decision making system helps us make consistently good decisions in an appropriate amount of time.
It often helps to have a clear purpose against which you can set your decisions. With your North Star, you can challenge all decisions to check that they support/further the cause of your North Star.
A good example of this is what Dave Lewis did when he became C.E.O. of Tesco. He rewrote the business purpose to be 'Serving Britain's shoppers a little better everyday'.This became the mantra of the business and at the core of all decision making. People would challenge a decision by asking "will this help us serve Britain's shoppers a little better everyday?"
The more senior you become, the further you are from the shop floor and therefore, the less detail you know. You cannot and should not know everything. You should have subject matter experts who know everything, you just need to know enough.
How much is enough?
The US Army work to a 40'70 rule. This states that for a soldier to make the right decision, they need to be in possession of between 40% and 70% of the information. Anything less that 40% and they are guessing, anything more than 70% and they are taking too long to make a decision.
Obviously, in business, the ramifications of guessing or taking too long to act are less than in war, but I think that the 40/70 rules can be applied to most decision making situations.
by Richard Wright
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