Sunday, November 22, 2009

Decisions, decisions... why we are bad at making them and what we can do to make better ones for our businesses. (Part 1)

One of the most important aspects about being a leader in business is making decisions. In the hierarchy of decision types the pinnacle is a strategic decision. These are the decisions that make or break the business. These are the ones that impact the future immediately and often bind substantial resources of the company. The importance of the decision is often palpable and as a result strategic decisions are often the hardest ones for even the most seasoned business people to make.

Considering that no one can 100% accurately predict the future every strategic decision starts out as a 50/50 coin flip. However, there are numerous tomes and pages of research dedicated to the topic of making better strategic decisions. Interestingly, none of the things I have read or any of the research I have seen works in all instances. The main reason for this is that most research is based on case studies and hindsight that prove the researchers point, or on experiments that limit “real world” variables. I don’t know about you, but I have never been able to go back and make a decision, nor have I been able to change the variables surrounding my strategic decisions. So is there anything we can do to make better strategic decisions? Yes there certainly is.

Research shows that the only constant in strategic decision making is the human element. However, as you may figure, it is hard to ever really consider the human element a constant. We all have different experiences, moods, emotions, etc. which research shows impacts our ability to make strategic decisions. Moreover since we are not machines the human condition actually causes us to make bad strategic decisions. Therefore the key to making better strategic decisions is not finding a formula for making strategic decisions but understanding what about us is going to cause us to make a poor decision. In part 2 I will discuss the causes and give the tips you need to make better strategic decisions.

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