NO INFORMATION? NO DECISION!
Originally posted on Linkedin
Everyone makes buying decisions when they are confident in the outcome, and when they have past experiences with the brand or when they have credible information to support their decision.
For example in financial markets, participants will look at the availability and reliability of pricing of a product, the liquidity data on impact of a transaction would have now and in the future, as well as cost of execution. For holiday planning it’ll be something like looking at the hashtags of the location on Instagram and TripAdvisor ratings.
Understanding the need for fast decisions and decision support data is at the core of good business. It plays a vital part in any business. Where most successful business leaders may maintain mystery by calling the process "gut feel", I believe that this is smoke and mirrors., in fact what we call "gut feel" is informed by the available data and the experience of similar situations applied to known data.
I remember interviewing a chap from Virgin Radio 10 years ago who explained that at Virgin ever proposal must be supported and that support address the small handful of objectives of the Virgin business - If it did, it was accepted if it didn't it was rejected. This to me was a great insight into the importance of knowing your objectives, consistency in applicant and decision support within the decision making process.
The larger the Company (and hence the decision) the more this process de-risked by having a hierarchy of decisions, requirement for tender proposals, presentation of portfolio or track record etc. All of this is what I call “decision support” - support data that does not only apply to large contracts in big business, but applies equally to small decisions like what movie theater to go to.
Its not always the outcome but the process of strategic decisions that have a huge impact on morale and productivity in your business. Your bosses, colleagues and staff will notice if you fail to make decisions or fail to be clear on why a decision was made. Managers who are both clear and decisive make interacting with them much easier; Bosses, Staff, Suppliers and Clients quickly develop an understanding of the decision making process in order to solicit faster decisions and will also become more transparent and decisive themselves.
In fact, any decision made in your company will be important, no matter how small it may seem and so deciding what information you need and when you have enough information is critical.
BUT I hear you say we live in a world of too much information! This is where it gets interesting - the best decision support data is honest and accurate as it minimizes the expectation gap. It takes you from a feeling of "that was a waste of time and money" to "that was exactly what I wanted." Here are some tips:
1. Make sure the decision that needs to be made is your decision or someone else’s.
2. Determine whether this decision is important or not. If it’s not an important decision why are you wasting your time in the first place?
3. Consider carefully the desired outcome of every one of your options. Will option X bring more sales than option Y, but option Y is 90% likely and option X is 20% likely? Eliminate the low percentage outcomes from your list of outcomes – they are a waste of time and will skew the information you need.
4. Know the outcome. The key world here is EXPECTATION, what are the outcome you and other stakeholders expect want and what information is the best indicator for these outcomes?
5. If the decision is more complicated, brainstorm and break it down into a sequence of decisions. Most big projects are small decisions in a logical sequence. Do some research to find out more about the critical path of decisions and if needed seek approval to bring in external expertise to help analyze the steps and provide the information needed. This can be a cost effective choice for your business, both for the current decision and future decisions.
6. Once you have made your decision, execute and implement it. Do not spend time second- guessing it or thinking of “what could have been.” Stick to your decision and execute it to the best of your abilities. If you have built the right path, your next decision will be informed by your last decision and you wont have lost much time – but you will be able to describe the decision with clarity and confidence.
Don’t hide from decisions, don’t fall for the “gut feeling” smoke and mirrors and do be inquisitive in life by asking from yourselves and others what informs their decisions. It will change your life.
Besides being the CFO at Tradition, I'm also the founder shareholder of Jai Financial and Blake-Dair Consulting.