Creating and Building a Decision-Making Policy for Consistently Excellent Decisions
Businesses that make consistently excellent decisions realize excellent business results. These businesses do involve the right people discussing the right things at the right time and then making well-communicated decisions. These businesses monitor decisions made and quickly revise decisions as is appropriate. The result is an honest formulation of goals and a perception of reality that creates consistently excellent decisions and profitable business results. Let’s break this down.
Consider who makes the decision. There is a person with authority and responsibility who will “make the decision” by articulating the decision. Who makes and articulates the decision is significant, but the procedure to make the decision as a part of the business culture is also articulated and is more important. Simply because you have the authority and responsibility to make a decision does not allow you to ignore the available information and the opinions of others knowledgeable or involved. You may be gifted with intelligence or intuition or both, but alone you will not be able to produce as consistently good decisions as a group of knowledgeable and involved people. Most people accept this fact readily, but if your arrogance does not allow you to respect the views of others, the successful decision-making process stops here. Yes, the authority and responsibility will be vested in accordance with the governance rules of the business, but the procedure to make an excellent decision involves a group of people.
Given that we need a group of knowledgeable and involved people – the right people – who are these people? Are they the same people each time? Who chooses the right people? As the nature of decisions change, the composition of the right group of people will change. It should be the person with the authority and responsibility to make the decision who should seek counsel from all levels of the business and invite suggestions. The involvement of the right people must be articulated as a part of the communication of the decision. Decisions often involve change and the credibility of the decision depends on the willingness of those the decision affects to change. Those who feel their opinions have been listened to and their situations respected will be more likely to become vested in the actions needed to make a decision successful.
When the right people discuss the elements of making the decision, what does that discussion involve? A question can be asked in a way to obtain the desired answer. The manager who asks in that way will not initiate a discussion. What will be received is an affirmation, not objective information. Rarely is a public meeting or a leveraged situation (where there is implicit approval for a certain opinion) a meaningful discussion. Having a meaningful discussion and obtaining essential and unbiased information is essential for the successful decision-making process. The “discussion” is fact-finding – information derived from an objective curiosity about a situation and is not limited to a single event or moment in time.
What are the right things to decide? Decisions are made constantly, but some are matters of policy that set the course for the business and the operational aspects of the business. Policy decisions involve the goals of the business. The goals will not change frequently, but the goals involved in the decision should always be stated. Policy decisions must be made and communicated as is deemed appropriate.
When is the right time for all this to happen? This timing will not always be correct, but some solace can be taken in the fact that if a decision is not appropriate as determined by monitoring, it can and should be revised immediately. It is best to get the timing right and make the correct decision, but the perception of a problem and the quick application of a remedy can restore the decision to a successful status. The perception of reality from a variety of views enables excellent decision-making and also through monitoring for timely corrections when changes are appropriate.
The culture of excellent decision-making has these elements:
- Articulation of goals that are relevant and practical to the profitability and increase in the value of the business.
- Perception of reality through multiple views from people knowledgeable, involved, and affected.
- Information gathering which supports and considers a diversity of opinions.
- Communication of decisions which contain the goal and process involved in the decision.
- Monitoring of reality through the group as the decision is executed.
- Making appropriate corrections as the decision experience evolves.
- These elements recognized as the proper procedure for the making of decisions.
Want excellent business results? Create a group-decision making procedure and culture to produce consistently excellent decisions.