“Whenever you see a successful business, someone once made a courageous decision,” wrote Peter F. Drucker, “the man who invented management,” according to BusinessWeek magazine.
We are faced with a myriad of decisions each day. From the moment you wake up to the moment you go to sleep, you make choices among clothing, food, music, news stories, transportation, electronic messages and entertainment. And all those can be before you even reach the office!
Last fall, researchers from the University of British Columbia (UBC) discovered that one of the smallest parts of the brain — the lateral habenula –plays a critical role in how we process those risk-reward decisions on a daily basis. Earlier research also has linked this region of the brain to depression and certain types of avoidance behaviors.
In the study, which was published in Nature Neuroscience, scientists trained rats to choose between a consistently offered small reward of one food pellet and a sporadically offered larger reward of four food pellets. The rats tended to choose the larger reward when the waiting time (the study’s “risk” factor) was low, and they chose the smaller rewards when the waiting time was longer. When the scientists inactivated the rats’ lateral habenula, however, the rats chose either food option at random.
We as humans tend to make decisions the same way: we choose larger rewards when “risks” seem low and choose smaller rewards when the inherent or perceived risks are higher.
Other studies show we tend to make decisions more quickly – and are more satisfied with our decisions — when we are presented with all of our options at once. “Sequentially presented choices create uncertainty. Consumers know that alternatives will become available in the future, but not what those alternatives will be. So there is always the possibility that a better option could later be available,” writes Cassie Mogilner of the Wharton School of the University of Pennsylvania in a study published in the Journal of Consumer Research.
For example, many of us are comfortable making a decision when selecting from the available styles in our size at a retail or online store or from the entrees offered on a restaurant menu, but we struggle with decisions that don’t allow us to have all the options open to us such as when we are faced with which job to take or what home to buy.
Are you someone who makes some decisions easily and stresses over others? Do find yourself spending much of your workday worrying about what decisions to make, overthinking your options? You’re not alone.
Here are five steps you can take to become a better decision maker:
Define Your Outcome
It helps the decision process to clearly define what it is you want to happen as a result of this choice. For example, if you are choosing among new logo designs, ask yourself what you want your logo to do for your company and what you want it to convey. You could make a checklist that could include: color, clarity, message, uniqueness, power, simplicity to see how each logo measures up. Eliminate those that don’t pass muster.
Narrow Your Choices
By definition, decision making is the act of choosing between two or more things, people or courses of action. One of our biggest stumbling blocks is that we want to make the “right” choice without having enough information.
Before you can make an effective decision, you need to establish some clear criteria of what you want. If you are looking at candidates for a new position, clearly decide what levels of education and experience you are looking for. Weed out applicants who have not included the information you required in the application, for instance. For other decisions, make a pro-con list or a risk-reward list to help you organize your options.
Set a Time Limit
When it comes to decision making, more time is not always best. How often have you agonized over making a decision and then ended up going with your initial gut reaction? Set a clear timeframe for gathering the information you need and then set a date by which you will make your decision. Let participants know when that day and time will be, and then stick to it.
As the deadline nears, you may find it useful to keep a checklist of what has been accomplished as you work toward making your decision. Allow yourself enough time as well as a place to work undisturbed as you think about your choices.
Consider a team approach
As a business owner, the ultimate authority rests with you, but it can be helpful in many cases to ask your team for input in the decision making process. Your staff may offer insights you didn’t think of when it comes to the issue at hand.
It also can be a good idea to run a difficult work decision by an impartial friend or family member for an objective perspective.
Make it and move on.
Scott McNealy, one of the founders of Sun Microsystems, often talks about decision making in his interviews and lectures. He frequently comments that he strives to spend less time worrying about making the right decision and more time making sure the decisions he makes turn out right.
This philosophy makes a lot of sense. None of us has a crystal ball. We have to make the best decisions we can with the information we have available. By not making a decision you can lose an important opportunity. As you grow as an effective decision-maker, you will gain more confidence and be able to realize the benefits of making informed, timely decisions – even the ones that don’t work out the way you hoped they would — in growing and expanding your business.