Decision-Making 101: How to Make Tough Business Decisions

May 2, 2017

We’ve all been faced with tough decisions at one point or another, but when it comes to business it’s a whole different ball game.

Whether you’re a business owner or a leader within an organization, the responsibility that falls on your shoulders is enormous. The decisions you make will not only affect you, but also your employees and the overall success or failure of the business.

That’s why sound decision-making is such a crucial skill to develop—in everyday life and in business. Even successful leaders make bad decisions from time to time. As with all skills, decision-making needs to be developed over time and is often learned by trial and error. However, when running a business, one can’t afford too many errors.

So how do you make the tough decisions that are right for business? We’ve narrowed it down to these 4 tips for making difficult business decisions.

1. Prioritize Information and Understand the Issue

In business, there’s often a flood of information coming in daily. This constant influx can become overwhelming, and it’s sure to confuse your decision-making process. What you need to do is organize it in order of priority.

Next, the issue at hand needs to be understood with absolute clarity. Some questions to ask include:

  • What is the problem?
  • Is there any background information relevant to the problem?
  • What action, if any, has already been considered?

Stripping the problem and the information involved down to the basics is a great starting point, and will help make the process less overwhelming.

2. Face Those Tough Decisions Head-On

Stop avoiding the difficult conversations. They’ll only become more difficult over time. For example, say you’re having a tough time telling a junior on your team that they need to up their game. If you keep avoiding the conversation, they’re bound to mess up in a big way and then you’ll have to have an entirely different conversation.

Stick to the facts, find out as much information as possible, and don’t make things personal. You could say, “John, I noticed you’ve been coming to work late every day, why has this been happening? As a result, you’ve failed to finish your tasks on time, slowing down production. The team needs you to pull your weight; otherwise, we may have to reconsider your position within the company.”

Same goes with entrepreneurs; the repercussions of your decisions become bigger and bigger as your business grows. So deal with the problem now before it gets out of hand.

3. Get Some Advice

A good leader seeks the advice of others. That said, a good leader also takes control of the final decision. More advice means more solutions, but it also increases the potential for bad advice. Therefore, where you get advice and how much you get is what matters.

Ensure that your source is credible and will provide you with facts, not simply tell you what you want to hear. Be sure that there is no conflict of interest either: the advice given should be for the benefit of the business, and not for the individual’s own benefit.

4. Take a Moment

In business, most things are time sensitive, so we’re not saying that you should take your sweet time. What we are saying is that by taking a few more minutes or hours to make a decision, you’re likely to make a better choice than if you were to rush into things.

According to researchers at the Columbia University Medical Center, delaying a decision by just a fraction of a second improves decision-making accuracy. So, take a coffee break or go get some fresh air first, and then make your decision.

How to Make Tough Business Decisions: Make Them!

At the end of the day, the worst thing you can do is not make any decisions. Otherwise, you’ll find decisions being made for you, and that’s not a position you want to find yourself in. When business decisions are tough, sometimes you’ll have to make a decision between bad and worse.

Even if your options aren’t ideal, make the best decision possible for your business based on the information available. And while mistakes can’t always be avoided, you’ll learn from them and live to fight another day!

Write a Reply or Comment

Your email address will not be published. Required fields are marked *