There is no dearth in our ability to make decisions rather a need to identify the types of decisions we are making, because different decisions especially the strategic ones that are consequential on the outcome of a business require different approaches. Deciding on what to wear to a dinner date, or which university to enroll for a master’s program has a different result from a decision to introduce new product line for a company worth over 100 million dollars.
Categorizing Decisions
Each decision you make should be categorized to better understand how to address them. Key elements to note are control and performance. How much influence do we have on the outcome of a decision? Can we change the options presented to us or we can only make a one-time judgement? Also, the manner at which success is measured- performance. Is it based on absolute success or based on comparison with competition? Will the success of a competitor affects our own wins?
There are four fields to categorize decisions.
- Routine Decision Making & Judgement
In making decisions on routine activities, controls are usually low, and performances are absolute- i.e the outcome or choice does not affect your stance with a competitor. The goal isn’t to come first but to do great. In these scenarios, we should beware of systematic biases where options are placed to influence our decisions.
- Influencing Outcomes
Some decisions are based on outcomes and options we cannot influence; however many others can be controlled through positive thinking and self motivation. Decisions such as, the time it takes to finish a task is dependent on our mindset and can be controlled. When we believe we can finish early, we commit to it, and work towards driving a better outcome. This is a crucial element of high performance.
- Competitive Betting
This compares one’s performance in relation to others, sometimes competition. This is common where only one person takes the prize. Therefore, there is need to strategically anticipate competitor’s move and make decisions that will take you ahead of them and give you a chance at winning.
- Managing For Strategic Success
This field differs from all other field by revealing the essence of strategic management. Executives make decisions and influence outcomes by the way they lead, inspire and communicate. Decisions with high level of consequences and stakes such as release of a new product line or acquisitions are all strategic. They do not follow a laid down steps of decision making due to their complexities. Therefore, a high level of self-belief, commitments and determination are essential to win; including a eye for detail- avoiding common biases.
A mix of careful and dispassionate analysis on one hand called left-brain thinking and a willingness to push boundaries called right-brain thinking is the game changer, not just avoiding systematic biases.
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