The habits of successful decision makers

PUBLISHED : Saturday, 25 March, 2006, 12:00am
UPDATED : Saturday, 25 March, 2006, 12:00am

MOST PEOPLE make hundreds of decisions every day. Many of these may be small and inconsequential, but each decision has an incremental impact.

For example, you may be naturally athletic, but if you decide to eat junk food for lunch every day, you are likely to become a couch potato rather than a picture of health and fitness.

The same principle applies at work. Decisions about budgets and the choice of suppliers, assignments and priorities have a direct impact on your effectiveness. More importantly, they affect the financial performance of your company.

Therefore, many organisations look at decision-making skills when assessing employees for promotion. They are aware that making the right decisions consistently is easier said than done. Who has not struggled to find the best way forward when dealing with conflicting information, disparate needs and the inevitable uncertainty of how things will turn out?

Some of us prefer to take a fluid or relaxed approach, but in business that can lead to additional risks and problems.

Fortunately, you can improve your decision-making ability by adopting a structured process. This allows you to consider all the relevant factors and establish reasons for your actions.

Start by defining the issue in detail so that there is no doubt about what has to be decided. You can then clarify the key issues more easily.

For example, when deciding between two candidates for a job, first determine why you need to hire someone. Is it to replace a reliable but unexceptional member of staff or to bring new blood into a growing organisation?

Next, work out the specific standards or criteria that must be met. These might include salary expectations, the candidate's track record and the likelihood that the person will fit in well with the organisation's culture.

Variables which fall outside the main criteria often influence decisions. Try to consider as many of these as possible and be ready to consult colleagues. Nobody can expect to see all sides of a situation, so it always helps to get a different point of view.

The next step is to brainstorm and come up with a comprehensive list of alternatives. Try not to evaluate them straight away as too much analysis at this stage tends to stem the flow of ideas. Instead, concentrate on the full range of potential solutions and see things from different perspectives. It is important to be as creative as possible and to involve others if you can.

Then move on to evaluating each alternative. This might entail nothing more than listing the main advantages and disadvantages.

However, it could also involve a thorough cost-benefit analysis or a detailed study of the implications of a decision. For instance, will your decision to hire a replacement candidate at a higher salary affect the department's budget and limit your ability to recruit more people? Or, what impact will a cheaper but less qualified candidate have on the workload and morale of staff?

The aim is to get and examine hard data. You should try to quantify the potential returns from hiring the more expensive candidate and also calculate the possible cost of training the less qualified applicant. The guiding principle should be to create the greatest return for the least work or expense.

When making a decision, it helps to use a grid on which the variables can be ranked. If necessary, assign a score to each factor. Try to focus on the top few factors when the volume of data is overwhelming. Base your decision on these and later review whether the lesser factors need to be taken into account.

Act quickly. It is often better to make a decision that is not absolutely correct than to put things off. Also, do not forget to monitor the impact of a decision and be prepared to make changes or implement a back-up plan if necessary.

When it comes to making major investment decisions, the process obviously takes longer and has to be more rigorous. For example, the installation of a new IT system will be expensive, can have an impact on everyone in the company and must deliver results for years.

In such situations, it helps to use structured decision-making models. These include decision trees, paired comparison analysis and force field analysis. Each of these tools enables the user to weigh the relative importance of different courses of action, take complex variables into account, and calculate the financial impact of different decisions on the business. For more information on these techniques, visit

Of course, in every organisation, some decisions have to be made in a split second. In these instances, seasoned business professionals generally rely on gut feeling or intuition.

Think of Donald Trump in the hit TV show The Apprentice. His decisions to fire people are often based on instinct rather than rational analysis, but few would question his judgment.

Malcolm Gladwell, author of the bestseller Blink: The Power of Thinking Without Thinking, explains how such intuitive decisions are possible. In the book, he recounts how an art dealer, when first laying eyes on a famous Greek statue, declared it a fake.

The claim was shocking because the J Paul Getty Museum had paid millions for the artifact and conducted rigorous analysis to establish its authenticity. Even though the dealer could not explain his reasoning, the statue turned out to be a fake.

The judgment appeared intuitive but was not a lucky guess. Gladwell suggests the dealer's extensive experience had caused his brain to develop a sophisticated, though subconscious, decision-making model. This enabled him to focus only on the key features of a genuine statue such as the texture of the stone or the styling of the hands. He could tell a fake instinctively whereas the museum had become distracted by analysing too much irrelevant information.

It seems that experts and entrepreneurs are able to make accurate and insightful decisions because experience shapes subconscious decision-making mechanisms. All of us can do the same by getting wider exposure.

This requires seeking diverse, hands-on experience and being prepared to make the occasional mistake. Both positive and negative experiences help to build our internal decision-making models.

Do not get caught in 'analysis paralysis'. Learn to trust your instincts and the data. Soon you will be known as someone whose judgment can be trusted, and that will be good for your career.

Article sponsored by Gemini Personnel, the trusted name in personnel

The right solution

A 12-point checklist for making decisions

Define the problem

Consult others to get a wide perspective

Brainstorm to find alternatives

Pick the most creative solutions

Weigh the costs and benefits of each alternative

Evaluate the potential impact of each choice

Give appropriate weight to specific factors

Support your analysis with data

Find a solution that creates the most impact with the least work

Trust your intuition

Make a definite decision, even if some information is missing

Evaluate the impact of the decision