Recognizes issues, problems, or opportunities and determines whether action is needed.
What sparks the decision-making process? In some cases it’s a request, such as when your leader asks you to choose equipment to purchase, reduce costs, or delegate work. In other cases you might be aware of an issue that needs to be addressed. For example, you:
Receive repeated feedback from customers about a product problem.
Believe an improvement to a current process could bolster productivity.
See an opportunity to increase market share by improving a product feature.
Even when you’re not the person who makes the decision, you can improve the quality of the decision by identifying problems and opportunities. As a result, people develop confidence in your ability to spot opportunities and contribute to good organizational decisions.
1. Recognize issues, problems, or opportunities.
Effective decision makers are proactive. They stay aware of issues, unresolved problems, or opportunities they can take advantage of. Chances are there’s a decision to be made if you have ideas for:
Improving work processes.
Reducing costs while maintaining quality or efficiency.
Improving customer service.
Increasing enthusiasm of associates.
Bolstering sales or profits.
Example: John noticed that his team’s overtime hours had increased over the past year, yet output levels had remained the same. When he asked the team why, John learned that requests for custom packaging had gone up 25 percent, but due to the current equipment, custom packaging orders took longer to fill. He also found out that the organization charged the same price for custom and regular packaging. By correctly recognizing the problems–increased overtime, amount of time to fill custom orders, and potential lost revenue on custom orders–John and his team faced two decisions: how to decrease overtime and whether the demand for custom packaging justifies modernizing the equipment and raising the price for custom packaging.
To determine if you have a “decision in the making,” ask yourself:
Are coworkers frequently complaining about work?
Are deadlines being missed or jobs being done incorrectly?
Are there an unusual number of misunderstandings or conflicts between/among departments?
Is there a trend in customer feedback?
Do I have an opportunity to provide a product or service that the competition can’t?
To obtain specific information about your potential decision, check the following sources:Includes sales or performance records, ideas taken from suggestion boxes, and informal communication gathered via your network, team meetings, task forces, and quality committees. Includes competitor information, research reports, and customer surveys and feedback.
2. Define the desired outcomes, criteria, and decision.
After recognizing that a need or opportunity exists, write a clear description of your desired outcomes, the criteria your decision needs to meet, and what you hope to decide. Doing this helps you:
Determine whether a decision or action is needed.
Confirm that you’re addressing the “right” situation.
Ensure that your decision yields the results you want.
Desired outcomes refer to the results you want to achieve (for example, exceeding customer expectations or increasing productivity). Outcomes also might include how people should feel about the results. When defining desired outcomes, consider:
What you hope to accomplish.
How you want those affected by the decision to feel or act.
For example, if you want to buy a winter coat, your desired outcomes would be to stay warm and to receive comments such as, “That’s a stylish coat.” are the measurable and observable characteristics the decision must meet. Criteria are broadly categorized into quality, cost, and time. Your criteria for buying a new winter coat might include:
Warmth provided (quality).
Money you’re willing to spend (cost).
The need to purchase the coat before winter arrives (time).
A decision states the specific choice to be made. By knowing the results you want, you can clearly describe the decision to achieve those results.
Defining your decision accurately depends on identifying the desired outcomes you want to achieve and the criteria the decision must meet. Another key element of your accuracy is involving others. Seeking others’ input helps to ensure that the right decision is made and that people support and understand the decision. Otherwise, if you assume the desired outcomes and decision criteria, you risk defining the decision incorrectly and getting results much different than what you expected.
Example: A large beverage manufacturer spent millions of dollars and many years trying to outdo its competitors’ packaging based on an inaccurate decision definition: “What bottle shape can we develop that will be as memorable as theirs?” However, the manufacturer’s actual desired outcomes were for people to drink more of their beverage and ultimately increase market share–not to have recognizable packaging. After reassessing its desired outcomes and redefining the decision accurately as, “How can we get people to drink more of our beverage?” the manufacturer freed its thinking and invented the successful large plastic liter bottle. Market share soared (Russo and Schoemaker, 1989).
3. Determine whether action is needed.
Now that you’ve defined the situation in terms of desired outcomes and criteria, and checked the decision to be made, you’re in a better position to determine whether action is needed. Consider the time and energy it would take to work through the decision and determine whether your and others’ efforts are worth the investment. Think about:
Who needs to be involved in the decision. Are they available, and will they be supportive?
What actions might need to be taken, and who will initiate them.
Whether your leader(s) would support your decision-making process.
What time and money are needed to research the decision.
How confident you are that you know the cause of the situation.
Who else might be working on a similar decision.
Compare the time and energy it would take to work through the decision to the impact of not making the decision. Is it worth the investment? Based on the information you’ve compiled, you might determine that action isn’t needed. If one or more of the following situations exist, don’t take action:
The process will take too long and the opportunity will be missed.
The effort is greater than the reward.
There is little to no consequence for not taking action.