How To Become a Better Business Decision Maker

A few weeks ago, Lisa Haneberg had a contest for best management idea. I decided to submit something that I do that I think is uncommon, and it turns out I won!. Now I get some cool prizes from Lisa. For those of you that are curious, here is the idea. It is a process that I think helps me make better business decisions.

One thing I do that isn't very common is that I write down the decisions I make and the projected outcomes. Each week, I take a few minutes at the end of the week and I make a list of decisions I made. I try to focus on decisions that have important consequences, have ambiguous input parameters, or are otherwise difficult to evaluate. I don't waste time on simple things, although at some point I problemably should take a few weeks and just focus on those.

When I write down a decision, I make some basic notes as to why I picked the final choice. I don't write so much that I rehash the whole process, but I do write enough to jar my memory. Then I write down what I think will happen as a result of the decision. Each week when I make these notes, I also review my previous decision notes to see whether or not the success of previous decisions can be evaluated. If it can, I note how whether or not the decision came out as I expected. Once a month I gather these decision notes together and analyze them to see where I made mistakes.

The point is that management is all about making decisions, and I believe this process of decision analysis is helping me become a better decision maker.

For example, if I am doing some business development and I decide write a phone or email script, I make notes about the anticipated response to the script. Later I can evaluate the responses and determine whether or not they were in line with my expectations. If they were not, I can try to analyze the reasons so that I will do better next time.

Another example is sales. If we missed our targets for a month, I can go back to my notes and look at the reasons I set those targets. Were my assumptions wrong? Was my analysis wrong? Did some economic force or event change the industry? This way I can tell if I need to improve on my assumptions, my analysis, my execution, or if I made good projections but unforseeable events affected the outcome.

This process can be used for any major decisions. Are you taking a new management approach with a certain employee? Have you instituted a new policy of some sort? Have you decided to allocate your time differently? Have you decided to be more/less diligent about responding to email? Have you decided to take on a new type of client? Have you decided to change your advertising strategy?

I don't complicate the process by overanalyzing or spending a large amount of time on this process. Some things are just random and beyond my control. However, it really helps me out when repeated bad decisions prove to me that some assumption I have isn't true, or that something I thought was useful really wasn't.

Why don't more people do this? For one, it's hard to keep up with it, and takes discipline. (I even slack on this from time to time myself, and it took me about a year to get to the point where I did it regularly). Secondly, if you do this, you problemably won't like the results because you will find out some things about yourself and your thinking that you don't want to find.

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There are some great ideas among the runners-up over at Lisa's blog, so go check them out. I also suggest this book on decision making, which I read on Bren's recommendation.