Making effective business decisions is a crucial skill for business leaders. Without this skill, it’s unlikely that a business leader will be able to find lasting success. The reason this skill is so vital is a big part of being a leader is constantly making decisions. It’s not uncommon for business owners and other leaders to make dozens of decisions every single day. Not making a decision means a business will stall and fail to make progress. And if a leader makes the wrong decision enough times, it can result in absolute disaster for the business.
A fairly common belief is making smart decisions is something that certain leaders are simply born with the ability to do. Although it’s true that plenty of notable leaders give the impression that making effective decisions is very natural for them, the reality is decision-making is a skill like any other. What that means is even if you’re unhappy with your current decision-making abilities, there are steps you can take to improve this skill.
Understanding Business Decisions and How to Make Them Effectively
The first step to making effective business decisions is understanding what actually goes into this process. Experts agree that there are three main stages in making a decision. Those stages are to identify the problem, analyze the possible solutions and evaluate the possibilities that are likely to bring you closer to your goal.
Realizing that all of those stages are involved in a single decision may come as a surprise. But as mentioned above, the reason experienced leaders give the appearance of making decisions with ease is they have a lot of practice doing so. As someone who’s working to improve your skills through practice, taking the time to mentally go through each step will benefit you immensely.
Once you’ve gone through those steps, you have to make a decision. It’s important to understand that just because you’re utilizing this process doesn’t mean every decision will be clear or easy. A big part of making effective business decisions as a leader is taking the information that’s available to you, analyzing and then committing to a decision.
Another important note is an effective decision is different than one that’s simply good or bad. Business decisions often require compromise or other considerations. That’s why the other important piece of improving your decision-making ability is taking time to go back and review decisions. This will help you learn valuable lessons that you can use to help make future decisions.
To find out more about what you can do to improve as a leader, we encourage you to learn about the Baldrige Performance Excellence Program and our process for putting it into action.