Decision-making is the process of gathering information, evaluating alternatives and resolutions. According to the Oxford Advanced Learners Dictionary, the word “decision making” means “the process of deciding what is important for a group of people in an organization”.
In the simplest sense, decision-making is the act of choosing between two or more approaches. In the broader problem-solving process, decision making involves choosing between possible solutions to a problem. Decision-making can be an intuitive, thoughtful process, or a combination of both.
It is important to understand that not all decisions are made equally and trying to execute a one-size-fits-all approach for all your decision making endeavors is bound to fail. Context and background matter. But it may not be easy to develop a fluid and flexible decision making process in your initial experiences as a leader. Therefore, it is a good idea to level up your decision making skills by utilizing decision making models that allow you to categorically and comprehensively make decisions by taking into account all the factors that lead to effective decision-making.
In this blog, you will learn –
- Prioritization And The Decision-Making Process
- What To Keep In Mind When Making Clear And Scalable Decisions?
- Pitfalls To Avoid In The Decision-Making Process
- The Best Decision-Making Models That Simplify The Process
Prioritization And The Decision-Making Process
One of the most fascinating things about the human psyche is the ability to analyze complex problems and situations to come up with an optimized decision that is a total of every aspect and element that the brain could comprehend. This kind of logical problem-solving and decision-making ability is what allows us to do great things including creating and managing large organizations with multiple teams, departments that all need to work together for success. And all of that is far from simple. It requires a great amount of thought and drive, as well as the ability to adapt and make decisions that will inspire growth and success for a firm.
One of the primary aspects, when it comes to making complex, or simple, decisions is knowing how to prioritize your tasks and goals, and make decisions in accordance with the relevancy and importance of certain tasks. Prioritization itself is a broad topic and can be its own entire topic of discussion. However, it plays a very important role when it comes to making decisions that need to align with a larger objective or your organization’s vision.
The first order of business, therefore, when making any decision, is to classify all your tasks based on their level of importance and urgency. For instance, if your company’s priority is to expand into your markets, all tasks related to market research, expansion plans, and growth management need to be prioritized.
Step-by-step approaches are the most efficient way to make thoughtful and informed decisions that have a positive impact on the short and long-term goals of your organization. When you introduce a formal decision making process, you will be able to avoid hurty decisions and make more informed decisions.
Source: Prioritization Matrix Template by SlideUpLift
To come to the most optimum decision, it is important to be in possession of all the facts, has your priorities sorted, and understand what it takes to be a robust decision-maker in your organization. Check our professionally designed collection of Prioritization Templates.
What To Keep In Mind When Making Clear And Scalable Decisions?
Making decisions can be one of the hardest things in a position of responsibility. For instance, in this pandemic, global work cultures had to be changed dramatically, leading many companies to see a significant loss in their yearly and monthly profits. Many had to make the tough decision between laying off employees or cutting back on their pay as a way to mitigate this unforeseen loss in revenue. The deciding factor between the two elements here is not as simple as simply weighing the pros and cons of each. Neither is it a good idea to simply work on a whim or a pre-decided model for making decisions. After all, it is important to note that your one decision can in fact trigger a chain of reactions and decisions that can and will affect the operational structure of a business.
Therefore, it should become standard practice to make scalable decisions i.e. decisions that clearly define the boundaries of each aspect of its execution – from team member roles to prioritization of tasks to clear transparency about the process of reaching the final decision.
So, how do you ensure that our decisions are the best possible ones, given the information and facts that you have in your possession? A few tips that will help simplify the process:
A significant part of using decision making models to make scalable decisions is to clearly define the roles and responsibilities of each team member. This way, you avoid overlooking any point of view, which automatically eliminates a lot of the friction normally associated with making executive decisions. It also involves the entire team within the decision making process, leaving no doubt for any team member to wonder about their work or responsibility in executing the decision.
As stated previously, decisions cannot be made in isolation. Without defining the context for a decision, you run the risk of making decisions in a bubble, one that does not take into account the individual weaknesses and strengths of the organization.
A key part of making decisions is also deciding the course of resource management within your company. After all, the best decisions are ones that effectively optimize the use of finite resources to maximize output in the shortest amount of time possible.
Pitfalls To Avoid In The Decision-Making Process
While you all make decisions based on our gut-feeling or instantaneous reactions in our daily lives, at a business or organization level, relying solely on your instincts may not be the perfect decision-making endeavor. After all, our instincts react only to our immediate understanding of things, and it can often cause us to give in to our biases, or believe that you understand all the nuances of a situation when you, in fact, don’t.
Imagine if all your life decisions were made using solely the algorithms you input into a large spreadsheet? All the nuance associated with making decisions for people and complex situations will go unattended. A spreadsheet is great if you need to classify and categorize all the different aspects that you need to analyze. However, excessive reliance on it can lead to decisions that lack essential human intuition and analysis.
One of the biggest reasons why so many people fail when it comes to making good and forward-thinking decisions is that at some level, they assume that there will be a predictable pattern to the workings of the world. However, this is a simplistic and often-times flawed method of approaching decision-making. Decision making should be a dynamic process, taking into account the various complexities of the situation, as well as understanding that things may change or not work the way they’re supposed to and planning for the same.
The Best Decision-Making Models That Simplify The Process
OODA Decision-Making Loop
OODA stands for ‘Observe, Orient, Decide and Act’, and is a loop-based decision making framework that is highly effective for making decisions relevant to your learning process and commercial operations.
The basis of the OODA Decision Making Loop is the four categories mentioned in the loop.
Observe: the first step of the process is to be observant of the situation, taking note of all of the externalities and aspects that are affecting the situation.
Orient: This is a critical thinking activity, wherein you actively orient yourself into the right headspace by eliminating all potential biases you may have about the situation
Decide: What is the right course of action is based on your observations and analyses, and then ‘act’ on that decision.
Act: Implement your decisions effectively.
Source: OODA Loop by SlideUpLift
Source: OODA Loop Template by SlideUpLift
The loop can be done multiple times, each time with a different approach or decision, to come up with the final decision that works for your company. Showcase your decision making using our pre-designed OODA Loop Diagram templates here.
DACI Decision Making Framework
DACI is a decision making framework that was specially designed for collaborative decision-making. It is highly effective in involving larger teams in the decision-making process. The method of decision-making adopted in this framework starts with identifying the ‘Driver’, or the individual responsible for driving the decision by collecting information and making decisions based on all the information they collate.
The next to be identified is the ‘Approver’, or the team member responsible for making the final call on the decision. This is often a member of the upper management or a superior responsible for signing off on any new initiatives or projects.’
‘Contributors’ come next, and these are all the people that are relevant as they provide critical insights, data, expertise, or opinions. However, they do not get a say in the decision-making process.
And lastly, once the decision has been made and approved, the ‘Informed’ are made aware of it, as they’re not part of the process but require an understanding of the final decision in order to work accordingly.
Source: DACI Decision Model by SlideUpLift
Source: DACI Framework by SlideUpLift
This model is often also used with a slight variation. This variant is called RACI, and it simply changes the driver of a decision to the one ‘responsible’ for it, providing for a greater role in terms of execution for the driver or the one responsible. Check out the collection of DACI Decision-Making Models here.
The Vroom-Yetton model was originally developed by Victor Vroom and Philip Yetton in their 1973 book, “Leadership and Decision-Making.” The model is used to provide a way of deciding on a decision-making framework. It helps categorize the various decision-making models and leadership styles available and helps you decide which approach would be best in your position and situation.
The model essentially poses 7 ‘yes or no’ questions, and on the basis of their interaction, allows an individual to decide on their model of leadership and decision-making. These are further explained by the five categories of decision-making processes –
- Autocratic (A1) – You make the decision using the information you already have, without any input from your team.
- Autocratic (A2) – You make the final decision, but you ask your team to obtain certain information that helps form your decision.
- Consultative (C1) – You individually ask for each team member’s opinions, but there is no team discussion that happens for the decision. The final decision is still made by you.
- Consultative (C2) – The entire team discusses the decision together, but the final decision is made by you.
- Collaborative (G2) – Your role is more facilitative, and the entire team discusses and debates to reach a final consensus for a decision.
Source: Vroom Yetton Model by SlideUpLift
Source: Vroom Yetton Decision Model by SlideUpLift
Browse through the library of Vroom Yetton Model for PowerPoint.
Cynefin’s decision-making framework is a conceptual framework that allows managers and decision-makers to identify the specific contexts of their situations and subsequent best practices for making decisions within those contexts. There are five domains within this framework, and they each are ways to understand and perceive the behaviors of all the people involved. These domains are –
Obvious – In this situation, there are clear rules and there is stability.
Best practice: Sense-categorise-respond (establish the facts (“sense“), categorize, then respond by following the rule or applying best practice.)
Complicated – This domain implies that this situation consists of known unknowns, or conceivable potential issues and problems.
Best practice: Sense–analyze–respond (assess the facts, analyze, and apply the appropriate good operating practice).
Complex – This domain consists of the unknown unknowns, and effectively states that analysis can only be done retroactively.
Best practice: Probe-sense-respond (probe and experiment, identify patterns, and apply best possible practice).
Chaotic – In this domain, the cause and effect are unclear as the situation is somewhat volatile.
Best practice: Act–sense–respond (act to establish order; sense where stability lies; respond to turn chaotic into the complex).
Disorder – This is the domain when all the other domains are rendered ineffective in terms of classifying a situation. There are multiple perspectives, multiple leaders, and various constituent parts that need to be further broken down to identify each of their domains. There is no set “best practice” for this domain beyond deconstructing it to assess it further.
Making decisions can seem to be a glamorous part of a leadership position. After all, it is at your discretion that the functioning of a team, firm, or organization will rely on. However, with great responsibility comes greater consequences of failure. Making bad decisions can instantly change the trajectory of your career and the success of your organization. Thus, it may be a good idea to invest some time in educating yourself on the various tools, tips, and decision-making models available that can significantly change the decision-making process by making it simpler and less likely to lead to failure.
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