7 Managerial Decision-Making Steps To Help You Execute Better And Faster

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Excellent managerial decision-making accounts for the difference between businesses that grow fast and businesses that don't. Managers and entrepreneurs who rise to the top and take their companies with them have usually developed habits and systems for making difficult decisions. Here is a system of creative decision-making narrowed down to 7 core steps:

1. Identify the core problem/core opportunity

The apparent complexity of business problems usually obscures the fact that most visible "problems" are merely symptoms or effects cascading from one root problem (the cause). This is a general phenomenon of systems. Complex chains of cause and effect in a system mean that the greatest changes can be brought about when adjustments are made at the root.

On the other hand, identifying the core opportunity in a marketplace can be just as complex as identifying a core problem. Often, it requires the ability to mine the customer landscape to identify their "core problem", before you reverse-engineer a product or solution for it and offer that solution to the customer.

2. Brainstorm your options

In this phase, your job becomes either to know or to discover the full breadth of alternatives available to you. 2 factors that differentiate successful business leaders start to show up in this phase.

A manager with a great deal of experience is able to draw up a wider set of potential directions to choose from. Separately, a manger who is disciplined at execution is able to research unknown or new options at a much faster pace, and replicate the advantages of much deeper experience.

3. Analyze Options

Management decision-making in today's world is an established science in its own right. There are literally hundreds of strategic thinking tools applied by managers to analyze options and make decisions. However, many of these tools are useless if the core assumptions under-girding the analysis are wrong or misguided. You must make sure that your managerial decision-making process includes ways to test assumptions as well as a system for cycling back if assumptions turn out to be wrong.

4. Make a Decision

The point of analysis is for managerial decision-making to be a faster and better process that leads to the attainment of business goals. However, even with excellent analytical tools, a leader's personal decision-making style can affect the speed at which decisions are made, and even the quality of the final decision. Decisive managers accept that bad outcomes can result from good decision-making procedures and take solace in the quality of their preparation and their process.

5. Take Action

Depending on the size of the organization you lead, the gap between resolution and taking action can be quite wide and time consuming. A bias for action is the single biggest determinant to making better and better decisions over the long run. There are just too many details and too much complexity in the business environment for a manager to attempt to be completely prescient.

To paraphrase business adviser Dan Kennedy, the best chance you have is to figure out the things that don't work (and won't work) as quickly and as cheaply as possible. That requires a culture of rapid decision and action.

6. Review Results

As a consultant, one of the most pervasive phenomena I have encountered in business is that of the business leader who hates to go back; who hates to review past work. Whether due to personality or habit, many entrepreneurs find the monitoring and testing of mundane business details to be distasteful at best.

Constant monitoring is one of the commonalities found in fast growing businesses. Recently, I spoke with a software manufacturer who found increased sales by monitoring buyer behavior. He and his team observed that a few web visitors who were abandoning the web site during the shopping cart process were coming back 2 or 3 days later to make a purchase. When they provided web shoppers with a "Save shopping cart" feature, purchases increased significantly.

7. Implement changes

The point of monitoring and tracking decisions and their results is to make improvements. Not just improvements in products and processes, but improvements in overall decision making. Making a habit of systematic change, will help you build a more nimble and profitable organization.

Gogo Erekosima is the CEO and Lead strategist at Colorado business consulting firm, Idea Age Consulting. They help companies build partnership-based business growth strategies and systems.

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