Making Difficult Decisions in Business

Leaders in business - whether the business is large or small - have to make many decisions. Some of them are difficult decisions. Often there is inadequate information. There are two classic mistakes the business leader can make. One is to make no decision, the other is to rely purely on instinct.

We should not put off difficult decisions; we should make them, but make them with care. From time to time we are faced with difficult choices between several options each of which has attractions and disadvantages. The approach that is commonly used is to consider the pros and cons of each option, argue and discuss for a little while, and then make a decision based on our feelings and intuition. We tend to use some analytics in considering the options but then go ''¹..."with our gut' when it comes to the final decision. The trouble is that our choice is subjective and therefore open to criticism. How can we be sure that we made the right choice when ultimately it was based on our feelings rather than anything rigorous? Did we make a rational decision or was it overly influenced by our mood and emotions on that day? If our decision is criticised then we will probably defend it vigorously and try to convince ourselves and others that there were many good reasons for it.

Important decisions need more than instinct. A generalised method for making major decisions consists of the following elements:

1. Analyse the problem. Gather data from various sources. Use problem analysis techniques such as Six Serivng Men or Why Why? Try to understand what is causing the problem. Break it into manageable chunks.

2. Generate many ideas using creative thinking or advanced brainstorming techniques.

3. Evaluate the ideas to come up with a short list.

4. List the pros and cons of different courses of action.

5. Only if time allows, sleep on it. Let the decision incubate for a little while.

6. Make the decision.

7. Review the decision down the line and be prepared to change your mind if it proves that you made the wrong choice.

Some decisions require more analysis and precision and here I would recommend a ranked pair analysis as described in the book below.

Brilliant thinkers know when to use the left brain for analytical and logical thinking, for critical analysis and convergent thinking. They also know when to use the right side of the brain for creativity, ideas, intuition and divergent thinking. When it comes to important decisions we should not just depend on our instincts. We should go through a critical and impartial analysis using a tool such as a weighted pair ranking. If we feel unhappy about the outcome then we must go back and check all the assumptions that led to it. If necessary we can repeat the process. You can generally trust it to give you the best result.

Once you have arrived at the best decision and thought through the consequences it is time to take action and to implement your choice.

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