Everything You Need To Know To Make Great Decisions

If you can’t tell yet, we here at Decision.io are firmly against the “gut decision” when the decision is of the complex and critical variety. We’re against it, and we don’t apologize.

These 6 steps of a sound decision-making process will give you everything you need to know about the entire decision-making process. Stop leaving decisions, the cornerstone of success, to chance!

1. Frame the decision to be made

Framing the decision is really just making the effort to ensure that you are indeed working on the right problem. This is where a vision statement and scope should be crafted. It’s your chance to invest a little extra time upfront so that you aren’t wasting your time during the more time and resource intensive steps.

Your vision statement should…

Clearly define the problem you are setting out to solve. For example, if you’re a business looking to develop a new product feature to satisfy a customer need, you should have a good understanding of that need. You should have an idea of how your customers fulfill this need currently via some kind of workaround. You should also know if they supplement with another product or service. Finally, you should know if enough of your customers have this problem to make the development of a solution profitable.
Articulate the proposed solution you are setting out to build. What will it do? How might it look? How is it different? How is it better? Can it be produced and therefore sold at a competitive price? etc.
Find the win/win/win. Determine how the customer, the employees, and the company will benefit from solving this problem. What does the company stand to gain in terms of revenue, brand power, connections etc.? How might this project help develop your workforce? What pain points will this solve for your customers and how will their day to day lives benefit?

In an article about Amazon’s Founder and CEO Jeff Bezos’ management style, Craig Timberg and Jia Lynn Yang report that he has employees write a mock press release that outlines how the proposed solution will be loved and appreciated by customers. If this task is difficult or the release unconvincing, then Bezos believes that the proposed solution or the problem it is solving isn’t good enough. This just goes to show that you can get creative about this step and make it an interesting and enjoyable exercise.

Your scope should…

Identify resource constraints. How many people will be available to execute on the final decision? How much money can be allocated to the execution or implementation of the final decision? What will be made available to you in terms of material goods?
Determine some deadlines. How much time do you have to complete the proposed project? Are there certain deadlines in between the start date and end date that need to be met?
Define the quality you must achieve at the end of this project to make it a success. We all like to believe that we’re only interested in creating the best possible product with the most quality humanly possible, but it’s not true. Perfection is usually too expensive!
Define the scope. The above constraints are very real, and your responsibility is to come up with the best outcome possible given the constraints. If the constraints are too tight, you’ll be faced with the options of either abandoning the project, increasing efficiency, or finding a way to loosen the constraints by extending the deadline, hiring more people, getting access to more funds and so on.

Defining project scope can become a very involved process, hence the profession of project management. If you don’t have project managers on board and hiring some isn’t feasible, you should be able to at least brush up on the basics of project management and make an honest attempt. The act of working through these questions and problems with your team will be beneficial, even if the end result is an imperfect vision statement and scope definition.

2. Generate feasible alternatives

Once the vision statement is created and the scope and constraints defined, it’s time to come up with a number of alternatives. While we like to think that the best idea is usually the first idea that strikes us like a bolt of lightening while showering – this isn’t usually the case. That first idea should serve as just that. It’s the start of the idea generation process during which you’ll hopefully come up with your winner.

Your alternative ideas should…

Be competitive with your initial idea. If the original idea is your own or one you firmly believe in, subconsciously it’s possible to make brainstorming nothing more than busy work in order to ensure that the original idea is still standing. Instead, make it your mission to come up with alternatives that dominate your original idea.
Be doable. Remember those constraints and the scope you defined as a result of those constraints? They play a role here too. We’d love to create a decision-making platform that automatically does everything for you from start to finish, allowing you to lay out on an exotic beach sipping your favourite vacation drink. Due to constraints, we can’t develop such a product right now, and so we’ve settled on creating a platform that makes the accepting of online submissions and the subsequent collective decision-making process efficient and effective. We’ll tell you when we’ve developed the aforementioned dream solution though!
Be a creative stretch. This is a chance to forget those pesky constraints, or at least let them linger in the background for a while. It’s time to come up with some crazy ideas! One of these ideas, or a variation of one of these wacky ideas could be a winner. You’ll definitely want to apply the same constraints to these alternatives after the brainstorming session.
Be evaluated. For your best alternative ideas, hold them up to the same standards as the initial idea. Ask the same questions from step one. Apply the same constraints.

There is a pretty good chance that one of these alternatives are competitive with or just downright dominate your initial proposed solution. This is great!

3. Use meaningful and reliable information

Deciding to go with an alternative or our initial plan is not the stuff of gut decisions when the problem is complex and unfamiliar. Save the gut decisions for choosing between your break room’s honey crueler and chocolate dip donuts. Complex and mission critical decisions need data.

Your data/information should…

Be evaluated for credibility. Your data should be coming from credible sources. In science, this would be your peer reviewed academic journals. In business, this might be Forrester and Gartner reports or in-house user data. Either way, you want this information coming from sources that have established some credibility.
Be evaluated for relevance. It’s great that your data has come from a credible source, but is the source and/or the information relevant? In the case of a granting committee, they might read about application management strategies that are paper based, and therefore look at ways of implementing some more efficient paper based application management processes. Problem is this credible report was written in 1988, and a whole lot has changed since then in the way of technology! It’s credible, but not relevant!
Address the known, known unknowns, and unknown unknowns. The information decision makers are presented with should elaborate on the things already known and provide some support of the known. Usually, when we come to know something, we also realize we know next to nothing about something related. The information should definitely explore these known unknowns to the point that they become a known for the decision maker. Finally, and ideally, the research should dig deep enough that things we didn’t even realize were unknown to us come to light, moving it into the known unknowns category.
Acknowledge the threat of biases. This part of the process is especially prone to the introduction of biases. For example, it is tempting to focus on information that supports our position and to discount information that discredits it. Biases are a topic that we’re passionate about here at Decision. So much so in fact that we have a two part series that touches on some of the common decision making-biases. See The ABCs of decision making biases Part 1 and 2 for more info.

The decision maker should be left with information that is credible and relevant. They should have gained some supplementary information for the things they already know, some insight into the things they knew little about, and a taste for some things they didn’t even know they didn’t know. The information should have been gathered and presented in a manner that acknowledges the pervasiveness of biases and an attempt should have been made to minimize said biases.

4. Define values and tradeoffs

This is where we determine what we value in our final decision. In a perfect world, we’ll be able to make a decision that hits all of the things we value out of the park. In the real world, it’s likely that we’ll have to make some trade offs because it may not be possible to make a decision that sufficiently addresses each value. This can be okay, just as long as the trade offs are made carefully and consciously.

You should…

Identify the important metrics that will determine the quality of your decision. Some examples might be stakeholder satisfaction, short and long-term return on investment, customer satisfaction, brand perception etc.
Make conscious trade offs between your set decision criteria. If addressing all of your decision values with this decision isn’t possible, what are you willing to give up? For example, if you’re a business incubator evaluating startup applications, are you willing to overlook the fact that a team lacks a strong technical member due to them having a stellar idea? Or, is this a trade off that you aren’t willing to make? I don’t know the answer, but you should!
Ensure these values and trade-offs are communicated throughout the organization and with key stakeholders to ensure that decisions are made in a consistent way. Continuing the example above, it should be known by everyone on your review team as well as with key stakeholders what you value in a startup company and what kinds of trade offs your review team is willing to make and why.

5. Use logical reasoning

We still aren’t making the decision at this point. Here, we are focusing on analyzing the possibilities in such a way that decision makers will be well-informed and able to make the best decision with the information that has been made available to them thanks to steps 1-4.

You should…

Use decision analysis. This is basically the identifying, representing, and assessing of all of the important aspects of a decision. When done correctly, a decision-making ecosystem of sorts is built, and the likelihood of a good decision increases.
Include probability analysis. This will help to acknowledge and quantify uncertainty. If the decision is a complex one, and most important decisions are, there will definitely be some elements of uncertainty.
Make use of technological solutions that help to streamline this process and negate the many biases that can present themselves in this and previous steps. The problem with logical reasoning is that we’re not very good at it!
Avoid analysis paralysis. Be sure to only remain on this step for as long as necessary and not longer. It is possible to reach a point where further analysis does not come with a proportionate pay off. If we go past that optimal point, we’re engaging in analysis paralysis.

The decision maker should now be presented with possibilities that are well articulated and that fit within the constraints that surround the proposed solution. The proposed solutions have stood up to the brainstorming process and came out as winners. Quality and relevant information has been gathered, helping the decision maker expand their knowledge and gain insight into areas they may not have even known about but are important nonetheless. The values by which the decision will be measured along with the acceptable trade offs will have been established and communicated. Recommendations will be made available that are based on logical reasoning. The only thing left to do is to make the final decision!

6. Execute!

Now, it’s time to decide! This sounds like the easiest part, but this is actually where a lot of organizations get held up. If the structure to make the decision and implement it isn’t there, all of this has been for not. It is not uncommon for an organization to do the above fabulously only to be held up at the decision or implementation stage.

So, it’s important to have…

A plan of execution. When the decision has been made, exactly how will the organization move forward to make it happen? You need to have a good answer for this.
Buy in from all major stakeholders and decision makers. Otherwise, steps 1-5 will have amounted to little more than busy work resulting in a case study. Everyone needs to be on board to move forward on the final decision. If not, the decision that was good at the time it was made may not be good by the time it is implemented due to the variables that may have been introduced within that period of time.

Final notes

100% effort needs to be put into each step. That doesn’t mean that perfection needs to be achieved. Rather, the point at which further time and effort isn’t feasible and/or helpful should be reached.
Steps 2-5 are iterative. It is good practice to go back and generate more alternatives as new information comes to light, evaluate these new alternatives, and repeat as necessary. Eventually a decision must be made, so keep in mind your constraints and scope or you’ll run out of resources before you’ve made a decision.
Decision quality is judged at the time the decision is made. It’s tempting to judge decisions by the quality of the outcome, but this is inaccurate. The decision quality should be judged by the quality of the decision-making process and the information available at the time of the decision. Unforeseen variables may present themselves between the time of decision and when the outcome is realized.
For an even more detailed look at decision quality, see this 2011 Stanford video. This video is 1 hour of decision quality gold.

The time that it takes to ensure good decision quality pales in comparison to the potential repercussions of a decision made quickly and carelessly. There are also a number of increasingly affordable technological solutions that address the challenges of the different steps. Good decision making combined with a little help from technology can give you decision quality and efficiency. Who doesn’t want that?

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