A good business owner knows that there’s a process to go through before enacting a serious change or making a big purchase on behalf of the business. Making impulsive decisions is a great way to land the company in serious trouble, so going about your decision-making methodically and cautiously is the best way to prevent making changes and purchases that end up being detrimental to your overall goals.
There are several popular decision-making models, each with their own number of steps and philosophies. However, most include a form of these seven, important steps to making a decision:
Identify the Problem
When making a big business decision, it’s usually to address a specific problem or issue currently troubling the company. Don’t make a big purchase because you have a vague notion that it will benefit the company, and don’t base a decision solely because it’s what’s trendy and what other successful companies are doing. You need to be able to say “We should consider X because it will help us with Y.” Furthermore, the Y in this equation should be a specific issue, and nothing broad like “increase profits” or “improve employee satisfaction.” There needs to be a direct purpose for making the decision, which will, in turn, result in your broader goal, such as “We should consider X because it will increase the efficiency of this specific process, which will help increase profits.”
Like the scientific method, you need to gather evidence in order to give your hypothesis weight. Put on your detective hat to investigate the problem and how the proposed decision will affect the problem as well as the rest of the business. This includes looking into how other businesses have addressed this problem and the success they’ve had with it. If it’s the purchase of a product or service you’re considering, read reviews, both positive and negative. Conduct interviews with the service provider to learn more about it. You’ll eventually build your list of pros and cons, as well as hopefully come up with some quantified data to help predict how the decision will potentially affect the business. During this phase, hopefully, you’ve also gathered information concerning the next stage.
What are the Alternatives?
Your initial decision doesn’t have to be the end-all-be-all for solving your problem. This is why step one is important, because through the course of your decision making, you may find a different approach to the issue. Make a list of possible alternatives to the decision. The list could include a less impactful change compared to the initial plan or a different product or service. You could discover that making a change or purchase isn’t feasible or worth it, so you can decide to do nothing for now.
Analyze Your Findings
It’s time to weigh the decision and alternatives to narrow-down your choices. Visualize the chain of events following the implementation of your decision, and try to envision how each choice will realistically benefit or harm the business. Use your hard data to calculate a possible return of investment to justify the costs.
Choose a Course of Action
After the previous steps of introspective, information gathering and analyzing data, now is the time to make a decision. Be aware that you’re not limited to just one alternative if you decide to go that route.
Execute Your Decision
Pull the trigger. Form a plan of action for your business decision and follow it carefully.
Observe the Results
The process isn’t over yet. Watch the impact of your decision carefully and chart its success or failings. Of course, track whether or not the decision actually helps the problem you set out to solve and what other effects it has. How did it affect costs, work ethic, etc? Perhaps there were some unexpected side-effects that caught you off-guard. Recording the results will not only allow you to adjust the decision going forward, but it will help you to continue making better business decisions in the future.
eFileCabinet is a tool that’s been helping businesses since 2001. It’s a business solution that will make your business much more efficient and comes with a high return on investment. Like most business solutions, it’s a commitment that you should first consider using this decision-making process. We want to help you with the information gathering stage with a free demo so you can observe how we can help your business. Fill out the form below to experience our demo.