Make Better Business Decisions by Following This 7-Step Process
By Tricia Hussung
Post sponsored by Concordia University, St. Paul
Having a solid decision-making process in place helps managers and other business professionals solve problems by examining alternative choices and deciding on the best route to take. Using a step-by-step approach is an efficient way to make thoughtful, informed decisions that have a positive impact on your organization’s short- and long-term goals.
The business decision-making process is commonly divided into seven steps. Managers may already follow many of these steps without realizing it, but gaining a clearer understanding of best practices can improve the effectiveness of your process.
Steps of the decision-making process
The following are the seven key steps of the decision-making process:
1. Identify the decision
The first step in making the right decision is recognizing the problem or opportunity and deciding to address it. Determine why this decision will make a difference to your customers or fellow employees.
2. Gather information
Next, it’s time to gather information so that you can make a decision based on facts and data. This requires making a value judgment and determining what information is relevant to the decision at hand, along with how you can get it. Ask yourself what you need to know in order to make the right decision, then actively seek out anyone who needs to be involved.
“Managers seek out a range of information to clarify their options once they have identified an issue that requires a decision,” writes David Ingram in the Houston Chronicle. “Managers may seek to determine potential causes of a problem, the people and processes involved in the issue, and any constraints placed on the decision-making process.”
3. Identify alternatives
Once you have a clear understanding of the issue, it’s time to identify the various solutions at your disposal. It’s likely that you have many different options when it comes to making your decision, so it is important to come up with a range of options. This helps you determine which course of action is the best way to achieve your objective.
4. Weigh the evidence
In this step, you’ll need to “evaluate for feasibility, acceptability, and desirability” to know which alternative is best, according to management experts Phil Higson and Anthony Sturgess. Managers need to be able to weigh pros and cons, then select the option that has the highest chances of success. It may be helpful to seek out a second opinion from a trusted source to gain a new perspective on the issue at hand.
5. Choose among alternatives
When it’s time to make your decision, be sure that you understand the risks involved with your chosen route. You may also choose a combination of alternatives now that you fully grasp all relevant information and potential risks.
6. Take action
Next, you’ll need to create a plan for implementation. This involves identifying what resources are required and gaining support from employees and stakeholders. Getting others on board with your decision is a key component of executing your plan effectively, so be prepared to address any questions or concerns that may arise.
7. Review your decision
An often overlooked but important step in the decision-making process is evaluating your decision for effectiveness. Ask yourself what you did well and what can be improved next time.