|If you incorporate the following metrics into your decisioning framework you will minimize the chances of making a bad decision:
Perform a Situation Analysis:
What is motivating the need for a decision? What would happen if no decision is made? Who will the decision impact (both directly and indirectly)? What data, analytics, research, or supporting information do you have to validate the inclinations driving your decision?
Subject your Decision to Public Scrutiny:
There are no private decisions. Sooner or later the details surrounding any decision will likely come out. If your decision were printed on the front page of the newspaper how would you feel? What would your family think of your decision? How would your shareholders and employees feel about your decision? Have you sought counsel and/or feedback before making your decision?
Conduct a Cost/Benefit Analysis:
Do the potential benefits derived from the decision justify the expected costs? What if the costs exceed projections, and the benefits fall short of projections?
Assess the Risk/Reward Ratio:
What are all the possible rewards, and when contrasted with all the potential risks are the odds in your favor, or are they stacked against you?Assess Whether it is the Right Thing To Do:
Standing behind decisions that everyone supports doesn’t particularly require a lot of chutzpah. On the other hand, standing behind what one believes is the right decision in the face of tremendous controversy is the stuff great leaders are made of. My wife has always told me that “you can’t go wrong by going right,” and as usual, I find her advice to be spot on. There are many areas where compromise yields significant benefits, but your value system, your character, or your integrity should never be compromised.
Make The Decision:
Perhaps most importantly, you must have a bias toward action, and be willing to make the decision. Moreover, you must learn to make the best decision possible even if you possess an incomplete data set. Don’t fall prey to analysis paralysis, but rather make the best decision possible with the information at hand using some of the methods mentioned above. Opportunities and not static, and the law of diminishing returns applies to most opportunities in that the longer you wait to seize the opportunity the smaller the return typically is. In fact, more likely is the case that the opportunity will completely evaporate if you wait too long to seize it.
Bonus – Always have a back-up plan: The real test of a leader is what happens in the moments following the realization they’ve made the wrong decision. Great leaders understand all plans are made up of both constants and variables, and that sometimes the variables work against you. Smart leaders always have a contingency plan knowing circumstances can sometimes fall beyond the boundaries of reason or control – no “Plan B” equals a flawed plan.