Decision-making: The art of making strategic decisions

Decision-making has long been something of a Cinderella topic. Economists took a bizarre approach to it, starting with a model which assumed that the decision maker had perfect information (an impossible ideal), then worked erratically backwards from that point towards reality. 

Business writers tended to avoid the subject of decision-making. Often they fell back on what I call the myth of decisiveness – that natural leaders had an innate ability to be ‘decisive’, so there was no point in writing about the subject. You either had it or you didn’t. If you don’t have an innate ability this list of UK betting sites can help you come to a decision of which one to use.

Decision-making: The art of making strategic decisions

Decision-making is, of course, a skill. But, how we decide the right course of action. There are two systems, one relatively automatic but sometimes subject to irrational bias, the other more conscious and reasonable. The comparison between electrical and mechanical systems helpful here: an automatic system is like an electrical one – once wired up, it works with great speed. The conscious system is mechanical, almost as if you have to crank a handle to get an answer. So, if you multiply 2×2 to get the automatic system working, and 24×15 to activate the mechanical (try it).

But the question still is; I’ve got to make a big decision, pretty soon. What do I do? How do I best get the two systems to work together to help me? Here are some hints.

How soon is soon?

Establish exactly when the decision has to be made. If someone is pressurizing you, try and buy time. Good decision making takes time (this is not what the myth of decisiveness claims, but the myth is wrong).

Having bought time, use it to find out information

This is normally a mixture of researching facts and talking to people, especially people who will be affected by the decision you make. Sounding people out without letting on you’re planning a decision is an art well worth cultivating.

Take time to play with options, too

As you mull these, a feeling of confusion may well result. Accept this: confusion is a good thing; it spurs creativity and pushes you out of your comfort zone. Keep pondering and (if necessary) finding out more. What usually happens next is that one or two emerge as clear ‘front-runners’.

Get in a good, relaxed mood

The romantic hero of the decisiveness myth makes decisions in a storm of energy: in the real world, the best decisions are often made in moments of calm.

Know when you have decided

This may sound obvious, but good decision makers have intuitive criteria that make them know when ‘almost undoubtedly, that’s what I’m going to do’ becomes ‘yes, that’s it’.  These are feelings (or can be sights and sounds: everyone is different). If you are not sure how you ‘know when you know’, try this test. Ask yourself if you approve of the decision with your head, then with your heart, then with your gut. If all three say ‘yes’, you have made a ‘congruent’ decision. Proceed.

Implement with subtlety

However well a plan is researched, reality is more complex, so the best decision will soon hit some kind of barrier. The myth of decisiveness says that these should be met with a steamroller. Good decision makers leave themselves ‘wiggle room’ to adapt their decision to fit what the decision makes happen. This is not the same as copping out.

Even the best made decision can go wrong

If the wheels really are falling off, then good decision makers go back to the drawing board. They do so only after a long fight to make the decision work, but they do eventually know when to call it a day. Knowing ‘when to hold and when to fold’ is a great decision maker’s art. (In practice, well-made decisions – well researched, congruently made and well implements – rarely go wrong.)

Most of these tips create a balance between the two decision-making systems.

  • Time-buying is largely a conscious process, as is researching facts.
  • Researching people and their opinions uses the ‘electrical’ system, assessing instinctively how they feel.
  • Creating and toying with options is largely electrical – you just feed stuff into the system and it processes it quietly.
  • Congruence is very much a matter of ‘instinct’ and feel, the domains of the electrical system.
  • Implementation, by contrast, is largely a rational business: it is something you plan.

However a measure of instinct is still needed – good decision makers get a feel for whether a plan is working or not. Calling it a day is probably based on instinct, but needs to be checked by reason (the ‘electrical’ system is loss-averse, and may sometimes panic too early and need to be kept in check by conscious resolve).

Perhaps the most important thing of all is to understand that decision-making is a skill that can be improved over time. Like all deep, difficult skills, there is always room for improvement.