Being able to make good decisions is an important skill for a leader. In your role, you’ll probably find that you make decisions every day. Many decisions will be quick and easy. Others will be more complex.
No matter the choices you’re making, you want to be able to make good decisions. Good decisions reduce bad outcomes, increase good outcomes and are made at the right time.
Bad, Lucky and Wrong decisions
We’re focusing on making good decisions here, but it is worth thinking about the other types of decisions a little.
Bad decisions are those that are poorly thought out. You didn’t do your homework and the outcomes were poor. Lucky decisions are similar – you didn’t put in effort to make the decision, and by chance, it just happened that things turned out OK.
Wrong decisions are not bad decisions. A wrong decision happens when you put in the effort to make a good decision, but something unforeseen happens, resulting in a bad outcome. Wrong decisions can be great learning experiences.
But bad decisions, when little thought and preparation is put into thinking through the consequences – are not good learning experiences. Bad decisions (according to my classification above) are lazy, irresponsible and not a sign of competent leadership.
How to Make Good Decisions
1. Make good decisions by considering the impact
Good decisions are all about impact, and impact covers many things. Your decision might impact people in your team, or other people in the company. Impact can also include losing money or increasing the risk of something going wrong.
Start by writing down a list of all the people that you might impact with your decision. Then, write a pros and cons list for each option you have. This will give you a better idea of the good and bad outcomes of each option, and will tell you who you might need to think about when making the decision.
2. Make good decisions by consulting the right people
You rarely make good decisions in isolation, because they often need input from other people. In the previous step, you made a list of the affected people, so you might need to consult them before making your decision.
Also be sure to look for any areas of uncertainty in your decision. Could you talk to somebody who has the knowledge to help you work out the impact or benefits?
You may also need to speak to the people who might be impacted by your decision so that they are aware of what is about to happen. Bad decisions often involve surprises.
“They decided to do what?”
3. Make good decisions by doing your homework
Before jumping to a decision, you need to do some analysis. For big, expensive decisions, you might need to do a lot of analysis for each option. For small decisions, you only need a little.
That’s why companies often put together huge proposals for expensive projects, rather than deciding to build a new space station without understanding the details.
For each option in your decision, you should think about:
- Cost. How much will the option cost if you choose it?
- Time. How long will the option take to deliver?
- Risk. If you select this option, how risky is it? What might go wrong?
- People impact. Just like in Step 1, you should think about how much impact this option would have on the people in your team, and others inside or outside your company.
Remember, it doesn’t need to be rocket science. Do as much homework (analysis) as you need to feel comfortable about your decision. Of course, you still need to make the decision at the right time, which leads us to Step 4.
4. Make good decisions by taking the time
Good decisions don’t always need to be quick. Work out when you need to make your decision. Is it next week or next month? Or is it tomorrow?
The earlier you can work out when you need to make your decision, the better. This gives you time to consult the right people, do your homework and tell anyone who will be impacted. Many bad decisions are made quickly, because people didn’t think about them early enough. As a result, they become rushed decisions, which are more likely to produce a bad outcome.
If you’ve followed the steps, then you have a chance to make a good decision. You still might not get it perfect, but it’s better than taking the risk of making a quick, rash decision that goes bad.
What do you think are the keys to making good decisions? When have you seen bad decisions being made? Let me know in the comments below!
Alternatively, if you would like to ask a question or need some help on this topic, you can send me a private message through my contact page.