“No mommy, I don’t want Cheerios for breakfast. I want to eat Frosties…Mom, I think I want Golden Morn instead.”
Oh, the arduous decisions a toddler is faced with.
Decision making is a constant part of life. In business or in our personal lives, making good decisions forms a huge chunk of our daily living.
Analysis of Business Problems is taught at the Lagos Business School to teach executives how to develop and build their critical and analytical skills through an organized and systematic approach.
The application of a planned methodical process leads you to make best rational and practical decisions, rather than emotional decisions mostly affected by intuition or popular conception.
Would you like to know my opinion? I believe that the systematic approach to decision-making is genius. It may seem like a lot of unnecessary evaluation for what could appear to be the obvious choice. However, when you intentionally apply each step in forming an analysis, you’ll find that you have indeed reached the best choice, or at the very least come to a reasonable conclusion.
I also believe that the systematic approach in arriving at business solutions should not entirely be limited to business. It is very applicable to the many life choices we must make. For instance, our dear toddler child burdened with the choices of breakfast cereals. Now, that’s a major problem requiring a major decision!
Let’s have a look at the step-by-step process in analyzing a business problem.
- Identify and collect all relevant information and understand the dynamics to the business
- Identify the right problem. Never forget that the way you state a problem frames your decision
- Be guided by the objectives – overcome conflicts by focusing on the vision and the goals
- Brainstorm on alternatives
- Identify criteria, considerations, and limitations. They could be financial, social, ethical, psychological, and the list goes on.
- Evaluate the alternatives using established criteria
- Take a decision
So, in summary identify the problem and objective, seek, and evaluate all possible options with considerations affecting each option. Then take a decision!
Remember our toddler? Let us call him Ben. Ben is a chubby-cheeked 4-year-old. He has an enormous tendency to overeat and so is allowed just one big bowl of cereal at breakfast with a glass of juice or some fruit. Let’s walk with Ben as he follows the systematic approach in its most basic and simplest form, to lead him to a fair and implementable decision.
- Ben is undecided about which cereal he wants for breakfast
- What choice of cereal would easily satisfy Ben’s appetite because Ben is very hungry
- The objective is to eat and be full
- Ben’s options are his favorites – Frosties, Golden Morn and Cheerios
- Recall Ben is allowed only a bowl of breakfast cereal, so he would want to choose the cereal that would fill him up best at a single serving.
- Frosties – the flakes are thick and coated with a lot of sugar. It always leaves Ben wanting for more. It’s his most favorite cereal. Golden Morn – this cereal swells up so quickly and Ben has discovered that it takes him longer to finish. Cheerios – this cereal is quite light in weight and mostly floats above the milk. He would certainly request seconds…or thirds.
- Ben has decided to have Golden Morn for breakfast, for that full feeling. Breakfast is served!
Of course, this is simply a fun and linear illustration of the systematic approach to decision making that I hope we can all consciously apply in our daily affairs. Our decisions should be practical and not laced with biases or sentiment. The focus is the goal! Organizations have achieved outstanding successes following these guidelines.
Always remember, the decision-making process does not stop when you make a decision. Be prepared to reevaluate and improve.
My best wishes, everyone.
Learnings in Corporate Financial Accounting