Despite popular belief that effective decision-making requires a lot of contemplation and time, there’s evidence that many decision-making “winners” execute decisions rather quickly.
A study conducted by Harvard Business Review (HBR) revealed that one of the four things that set successful CEOs apart is the ability to make decisions with speed and conviction.“We discovered that high-performing CEOs do not necessarily stand out for making great decisions all the time; rather, they stand out for being more decisive. They make decisions earlier, faster, and with greater conviction.”
Yet, a McKinsey Global survey shows 57% of managers and senior-level employees feel that most of their decision-making time is used ineffectively. Additionally, only 20% of respondents in the survey believed their organizations excelled at decision-making.
Leaders can quickly lose credibility, respect, and trust without being decisive. Nevertheless, managers face great pressure to make the right choices. Brent Gleeson explains, “As our organizations grow, the decisions generally become more frequent, more complicated, and have more serious ramifications.”
As options increase in number and impact, a step-by-step system for decision-making helps leaders make efficient and effective decisions quickly. In this article, learn how to streamline the process of making wise decisions without stressing unnecessarily or wasting time.
- HBR’s data showed that employees described as “decisive” were 12 times more likely to be high-performing CEOs.
- Skilled decision-makers often focus their energy on only the most critical decisions, rely on problem-solving processes they’ve developed, and tap into their “gut feeling” or intuition.
- Decisive leaders have also mastered the ability to prioritize and respond to the most urgent needs of the moment without wasting time.
What Is Decision-Making?
Decision-making is the process of choosing between options. It involves gathering information about potential choices and their alternatives. Often, making a good decision requires weighing the benefits and risks, or pros and cons, of different options. How someone makes decisions also depends on factors including personal biases and blind spots, which are often unconscious.
Factors that can influence the psychology of decision-making include:
- How much information you have
- Time limits
- Others’ opinions or advice
What Are the Different Types of Decisions?
We use different decision-making styles and techniques based on how important or meaningful decisions are, plus how much time we have to decide. Having many options, as opposed to limited ones, also affects our choices.
Below are examples of common types of decisions we make:
- Fast and automatic decisions: Also called programmed decisions, these are based on experience and repetition. They can be made quickly and don’t require lots of deliberation because the outcome is mostly assumed.
- Informed decision-making: This involves reasoning, thinking critically, and making decisions based on available information you’ve gathered rather than on intuition or emotion. Another way to describe this type of process is analytical, tactical, or strategical decision-making, usually made by business owners or managers who follow standard guidelines and procedures.
- Gut reactions: When you “go with your gut,” you choose the option you intuitively believe is best rather than carefully analyzing information. Gut reactions tend to be made quickly, which can be risky. However, this approach can be helpful in situations where there isn’t necessarily one “right” choice to make.
- Group decision-making: This occurs when multiple people work together to look at problems and issues, analyze the available information, and come up with effective solutions they can all agree to act on. This can lead to decisions that are thoughtful, creative, and inclusive.
- Satisficing approach: This occurs when you’re okay with achieving a “good-enough” outcome but aren’t necessarily concerned with making the best choice possible. Often this is done when there’s a time limit involved in the decision or the stakes aren’t very high.
- Maximizing approach: This is the process you follow if the stakes are high and you have time to weigh all options. In this case, you use information and resources, such as guidance from others and your own deliberation, to make the best possible decision in order to maximize benefits and minimize risks. This type of process is also called organizational or operational decision-making.
How to Make Effective Decisions Quickly
Some decisions require more time to decide than others, especially irreversible decisions or ones that have major consequences.
To make the best decision possible when you don’t have a lot of time, you need to have practiced and even mastered certain decision-making skills. By following a problem-solving process that involves working through repetitive steps quickly, you can come to conclusions faster and make choices that you feel confident about.
Here are steps to follow in order to make wise decisions efficiently:
1. Save Your Energy for Important Decisions
“Effective executives do not make a great many decisions. They concentrate on what is important.”Peter F. Drucker
Begin by identifying exactly what problem you’re trying to solve. Then, decide how important the decision is, based on ramifications and if it’s reversible. While choosing between choices can feel stressful, the truth is: Most personal and professional choices have few long-term, negative consequences, or at least they can be corrected if need be. As Tim Ferris says, “You don’t need to make perfect decisions for a lot of things. Preserve your decision-making calories for the things that actually matter.”
Here’s how to dedicate your time and energy toward decisions that have the most impact:
- Utilize the Eisenhower Matrix: Also known as the Urgent-Important Matrix, this helps you prioritize which tasks are most important to focus on first. Break down your tasks by defining whether they are urgent or not urgent, and important or unimportant. To be an effective leader, give priority to urgent and important tasks that demand you to take action quickly, delegate tasks that are urgent and not important, and schedule not urgent but important tasks for a later time.
- Determine if a decision can be reversed: If it can, don’t spend a lot of time debating. Simply make a choice based on your experience, gut feeling, or the recommendation of someone knowledgeable.
- Use fast decision-making for simple choices: Decide quickly when purchasing things that don’t have much lasting impact, such as clothes, house items, hotel rooms to book, and so on.
- Avoid “choice overload”: Also called “FOBO” (fear of better options), inconsequential choices can cause you stress. Ask someone else to choose for you, or even assign the decision to something random such as a flip of a coin.
2. Look Objectively at Options
“Information is a source of learning. But unless it is organized, processed, and available to the right people in a format for decision-making, it is a burden, not a benefit.”William Pollard
Putting aside fleeting feelings to make rational choices is one sign of emotional maturity and intelligence. Using reasoning and deliberation to make choices over emotion indicates that someone uses their “higher brain” to analyze information.
“There are two systems in the brain that collaborate whenever we want to make a choice. The first system is in charge of quick, automatic responses . . . On the other hand, the second system is accountable for solving more complex problems,” explains psychologist Daniel Kahneman. When you make decisions based on pure emotion, it may actually move you further away from your initial goals. Therefore, you want to slow down and think things through when the decision has lasting repercussions.
To utilize your brain’s “second system” and higher executive functions:
- Gather any information you can on alternatives so you understand all of your options.
- Imagine what it would be like if you carried out each option. Think in detail about what the actual outcome would be and whether it would solve your main problems.
- Take time to recognize and react to your emotions before making any major decisions. Do this with help from mindfulness exercises like meditation, journaling, and exercise.
3. Reverse Engineer the Problem
“A good engineer thinks in reverse and asks himself about the stylistic consequences of the components and systems he proposes.”Helmut Jahn
A great rule of thumb for problem-solving is to reverse engineer the outcome of your choice. Imagine yourself at point B (where you want to be) and then work yourself back to point A (where you need to begin). The whole point of reverse engineering is to dismantle a situation to see how it was developed, allowing you to analyze the process and gain knowledge about the journey.
Digital marketing entrepreneur Scott Oldford believes that reverse engineering can and should play a role in strategic decision-making processes. “You understand the impact you’re making . . . You have a grander vision, and although you may not know the exact road map that will get you there, you understand the fundamentals of how you will do it,” says Oldford.
Imagine yourself reaching your goals, then ask yourself these questions:
- What steps did you have to initially take to get the ball rolling?
- If you chose option A, did you end up getting what you truly wanted? What about option B?
- What sacrifices did you have to make? Were you okay with these? Were they worth it?
- Was there anything missing in the end that another alternative would have provided?
4. Weigh the Benefits and Risks
“Watch out for people who argue against something whenever they can find something—anything—wrong with it, without properly weighing all the pluses and minuses. Such people tend to be poor decision-makers.”Ray Dalio
Writing lists of pros and cons helps you to visually see the aspects of the options in front of you, this way you can weigh which one best serves your objectives. Deferring a decision until you’ve completed a pro-con analysis also provides space for powerful emotions to dissipate. This puts a halt to “amygdala hijacks,” a cognitive phenomenon popularized by Daniel Goleman in which perceived threats lead to extreme, undesirable actions.
If time allows, and a decision is significant, here’s how to carefully weigh risks and benefits:
- Write down the positives and negatives for each option, looking for imbalances.
- Consider creating a points system to tally which option comes out on top.
- Be careful not to overanalyze data, which can become paralyzing. “The highest-IQ executives we coach, those who relish intellectual complexity, sometimes struggle the most with decisiveness. Good CEOs realize that a wrong decision may be better than no decision at all,” says Elena Lytkina Botelho for the Harvard Business Review.
5. Lean on Others (Delegate and Seek Wise Council)
“It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.”Steve Jobs
Making a decision becomes a lot easier when leaders delegate certain decisions and defer to those they’ve hired who are experts in their fields. When managers and high-level executives act with humility, they also make decisions that benefit everyone in the organization. Humble people put others’ needs before their own and respect moral and ethical boundaries.
To get help making important decisions:
- Show up to team meetings with humility and a listening ear. Assume that others have knowledge to share and insights that can help you make decisions.
- Seek wise counsel from mentors and experts who know the journey. A survey from The UPS Store found “70 percent of small business owners that receive mentoring survive for five years or more, double the success rate of those that do not receive mentoring.”
- Use technology for instant, infinite mentorship from some of the world’s top business leaders. For example, utilize advice found in books, videos, online courses, and business podcasts, all of which offer valuable advice for a low cost.
- Take a note out of Amazon’s leadership page: Seek to hire employees that can make wise decisions on behalf of the company. Once they’re on board, help them develop their talents and leadership qualities to improve decisiveness.
What to Avoid When Making Decisions That Require a Fast Solution
The habits below can potentially stand in the way of effective decision-making:
- Lacking emotional intelligence: Letting your emotions control you, rather than relying on a decision-making process, may cause you to rush decisions and overlook important details. This is mostly a concern when making high-stakes choices rather than insignificant ones.
- Panicking: Not utilizing all the time you have to gather information and consider all options can cause rushed decisions to be made. Unless the decision is trivial, it’s best to take some time to come to a conclusion.
- Doing too little or too much research: Sometimes, too much information can be overwhelming and lead to procrastination, stress, or regret (sometimes referred to as decision fatigue or the paradox of choice). On the other hand, doing no research might contribute to impulsive decision-making.
- Not trusting your own opinion: Mistaking other people’s recommendations or opinions for facts can steer you away from your own values and goals. Similarly, when too many people weigh in on a decision, “groupthink” can occur, in which a group makes irrational choices out of a desire to conform.
- Failure to learn from past mistakes: Not taking into account what you’ve learned from past errors and failures puts you at a disadvantage. A more effective approach is to consider what you’ve learned in the past and apply it to your present situation.
Great Decision-Makers Have Strong Processes in Place
Decision-making in itself is simply a process. But you can expect an unsatisfactory result when the process is ineffective or not executed well. Lacking a process for choosing between options can also make leadership feel emotionally charged and haphazard. On the other hand, following steps to choose wisely instills a sense of direction in an organization and guides teams toward success.
Here’s what you can do now to hone your decision-making skills and develop effective work processes:
- Maintain a “big picture” view of your business as a whole. Learn to prioritize the most urgent needs over those that are less important or time-sensitive.
- Gather information about your options and weigh the facts, but avoid information overload, which can lead to procrastination and stress.
- Don’t hesitate to delegate tasks and ask others for advice or input.
- Recognize that even great leaders make mistakes and errors, yet this shouldn’t stand in the way of decisiveness. Many decisions can be rectified or reversed.
Want to learn more about different types of work processes? Find out more in this article: “Do You Have the Wrong Talent or the Wrong Work Processes?”
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