Decision-making depends on the quality of information you have, and the quality of the information itself is a function of how you have processed them and what kind of conclusions you have arrived at concerning the thought process.
In my post today, I will share my thoughts on the systematic steps to decision-making:
- Understanding the Situation – here, you identify and collect all relevant information and determine what is relevant, and what is not, amongst the information gathered. There are six questions you must ask yourself here:
What – What is happening?
Why – Why is this happening?
When – when did it happen?
Where – i.e., the location of the event.
Who – the protagonist.
How – how is this happening?
Apart from the question above, ensure to understand the contextual characteristics of the problem at hand, this way you can effectively address the issue.
2. Identify the right problem –At this stage you must avoid confusing the symptoms with the problem, for example, a headache may be because of a deeper-seated medical problem, if you then pick headache as the problem, you would have misconstrued a symptom as the problem. So, at this stage, you must get to the real cause of the problem, and this is where you come up with a Problem Statement. Please, be mindful of how the problem is stated as this may affect or trigger certain emotions in people which then drives how they think about their responses.
3. Be guided by objectives – what is the vision? What would you rather have? And generally being clear about where you want to go; helps to overcome conflicts arising from varying perspectives. The goal or objective should be simply defined as what should happen when the decision is made.
4. Brainstorm on alternatives – generate alternatives or options but be sure not to have too many alternatives which may lead to cognitive overload. (Two or three alternatives are okay). Holding a brainstorming session provides a useful source of alternatives, however, you should beware of “group thinking” and be sure to have the right brains, i.e., a variety of diverse thinking brains, this means that you do not have just similar thinking people to work on a decision that will impact a variety of people.
5. Identify the criteria, considerations, and limitations, that is the parameters to determine which of the selected alternatives meets your objective. This will help you focus on what is most important, prevent you from unfounded inclination towards one option, and it is ethical.
6. Evaluate alternatives using the established criteria – be sure to examine both the qualitative and the quantitative issues, establish the trade-offs, opportunity costs, and consequences, and determine the long-term versus short-term outcomes.
7. Take the decision! – do not get stuck in dogma, the most optimal decision is the one that meets your criteria. Mentally immerse yourself in the decision you have made and if you do not feel right, then you may have to re-evaluate the decision-making process.
8. Develop the action plan – the solution begins after the decision has been taken but does not stop here. You should develop questions about implementing the decision, associated risks, and mitigants here.
Thank you.
#MEMBA 11
INTRODUCTION TO ACCOUNTING (2)