Co-Founder and Chief Operations Officer at Set Schedule. Resident tech guru.
The decision-making process is a delicate balance between information gathering, evaluation and analysis. The goal is to make decisions based on your leadership style and experience. But what could prevent someone from making the right decision?
A common block is the ‘sunk cost fallacy’ economic principle that refers to the idea that people have a hard time letting go when they’ve invested time or money in something, even if it doesn’t work out. For example, say you’re working on a project that’s going badly. Instead of stopping and rethinking your approach, you could continue because reconfiguration would feel like a “waste” of all that time, money, and effort, even though continuing to move forward will only waste more time, money, and effort.
There is also a confirmation bias, with people tending to seek information that confirms their beliefs rather than looking for evidence that would challenge them. These types of blockages can mislead a company’s leadership.
Fortunately, it is possible to overcome such barriers. Here are a few steps based on my experiences that can help you move forward more easily.
1. Own your decisions.
Let me clarify: a decision is not a choice. When you make a decision, you end a process. You make a choice and a new one begins. Leadership is about making decisions so that your employees can trust you. If your employees don’t believe you know what you’re doing, they’re less likely to follow your example and take the initiative to make decisions on their own.
If you own your decisions, you can also learn from them. If you don’t take responsibility for your decision-making process, how can you learn from it and avoid repeating mistakes?
2. Invest in decision-making that is free of emotion.
Emotion is a powerful force that can influence our decision making. We’ve all been in the position of being so angry that we decide something we later regret or so excited about a new idea that we overlook its flaws.
The key is to keep your emotions out of the equation and instead focus on gathering information that will help you make the best possible choice. Here are some tips for doing just that.
• First, take some time to reflect on what you’ve learned from your previous decisions. What would you do differently next time? What have you learned about yourself as a person? How might it apply to other areas of your life?
• Next, think about factors that are beyond your control, such as whether your colleagues will approve or disapprove of your decision. Then try to evaluate how those factors affect whether or not this decision has a positive outcome for everyone involved.
• Finally, think about how much time and effort it took to make this decision. Was it worth it? Wouldn’t it be better to put some effort into something else instead?
3. Understand and compare the options.
In order to make an informed decision, it is important to know all the pros and cons of each choice. The more you understand how each of the options is likely to affect your business, the easier it will be for you to determine which one has the best possible outcome. This is especially helpful when looking at products from different sources that may offer similar or different features or benefits at different price points.
4. Evaluate the opportunity cost.
In economics, the opportunity cost is the loss of other options when you choose a course of action. This means giving up something to achieve something else, so evaluating the opportunity cost of your choice means considering what could have been. For example, if you bought a new car instead of paying for your child’s college education, the opportunity cost is the amount you could have saved for his college education.
Opportunity costs are important because they tell us exactly how much something is worth compared to all the other opportunities available at the time. The concept can be applied to any decision: buying a stock, choosing to work or play, deciding where to live, and so on.
Sometimes when it feels wrong, you probably did the right thing.
It may sound counterintuitive, but it’s true. When making a difficult but right choice, you often have to endure some discomfort. In fact, if it wasn’t awkward, you may not have gone far enough.
On the other hand, there are some things we do that make us feel good, but are not necessarily the right thing to do. If we’re always looking for shortcuts, we’ll never get anywhere – and that’s no way to achieve anything remarkable!
There is no way to overdo this: take responsibility for your actions and decisions and be decisive. Even if it’s hard to do this, instead of letting things happen by default, put yourself in charge. Become the catalyst that drives your ambition instead of being guided by the emotions of the moment.