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11 Step Decision Making Process

        posted by , February 24, 2013

Decisions aren't easy.

Getting a decision wrong is almost always painful. Not making any decision at all is usually worse.

If there's a single thing that will improve your business results it's better decisions. Every incremental improvement in the quality of your decisions also does wonders for your professional and personal success.

The vast majority of decisions are made with no process at all (or an informal ad hoc process). This is usually a mistake.

Once you become accustomed to process-driven decisions, it's hard to go back. The following process will improve the quality of virtually any decision.

decision making process

1. Define Problem or Mission

If I had an hour to save the world
I would spend 59 minutes defining the problem
and one minute finding solutions

~ Albert Einstein
What's your problem? What's your mission?

These questions might seem arbitrarily easy. However, they are important. Even minor differences in problem definition can lead to completely different decisions.

Your problem definition should be simple but avoid ambiguous interpretation. It should get to the heart of what you're trying to solve.

2. Define Objectives

Objectives are goals that you derive from your problem or mission. Most problems will decompose into 3-10 objectives.

Example Objectives

Problem / Mission
Start a small business.

Location in New York.
Professional and personal satisfaction.
Good chance of success.
High margin business (30% net margins or more).
Revenue > $1 million per annum.
Investment < $1 million.

3. Prioritize Objectives

Assign priorities to your objectives. Often a simple ranking is enough. ABC analysis is also a good technique (A = very important, B = less important, C = nice to have).

Your prioritized objectives will be used to evaluate potential decisions. Making tough choices at this phase will help you make a better decision.

Example ABC Analysis

A (very important)
Professional and personal satisfaction.
Good chance of success.

B (less important)
High margin business (30% net margins or more).
Revenue > $1 million per annum.
Investment < $1 million.

C (nice to have)
Location in New York.

4. Brainstorm Alternatives

Create a big list of possible solutions. Don't bother evaluating them. Just spit them out. You want the widest list possible. This is an excellent group activity, have a meeting or two.

5. Evaluate Alternatives

Evaluate the list of possible solutions against your prioritized objectives. This doesn't have to be a quantitative evaluation (numerical score). Often qualitative judgments yield the best decisions.

6. Choose Tentative Decision

Choose the best decision from your list.

7. Evaluate Tentative Decision

What will be the full impact of the decision? It may be useful to brainstorm a list of impacts.

If the full impact of the decision doesn't look good go back to step 5 (or as far back as appropriate).

8. Make Decision

Commit to the decision.

9. Identify Actions

Generate a list of actions that implement your decision.

10. Implement Actions

Implement your decision.

11. Perform Lessons Learned

Perform a post decision analysis in the hopes of improving future decisions.

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