Making decisions is something we all do on a daily basis. The decision-making process in business is a process as well as a habit. When the decisions are effective and successful, they can result in profit for the business. Unsuccessful decisions can result in losses, so the corporate decision making process is the most crucial part of any business.
In business decision making, there can be many tools, techniques and skills required. Individuals may choose to make decisions by themselves or they may want a collective decision involving multiple people. The decision making process is often challenging with many of the decisions resulting in one or more parties not getting their way and having to compromise.
Decision Making Steps
Step 1 – Define the problem
Before you can solve a problem, you need to know it exists and also need to know who it affects. Some questions can help:
- What is the problem, exactly?
- Why should the problem be solved?
- Who does the problem affect?
- Is there a deadline the problem must be solved by?
Step 2 – Gather Information
There may be dozens of staff, customers, suppliers or systems that can be affected by the problem. The process of problem solving has to start with gathering enough information related to the problem and identifying the people and systems that are suffering as a result of the problem. Tools such as flow charts and checklists can be effective for the information gathering process.
Step 3 – Analyse & Brainstorm
It is important to understand the cause and priority of a problem before starting the idea generation process. Tools to use here can be the cause and effect diagrams and a Pareto Chart. The cause and effect diagram would be used to help identify any or all possible causes of a problem and the Pareto chart would help to prioritize and identify causes of the highest effect. After this you could move on to the brainstorming process.
Step 4 – Develop & evaluate all potential solutions
Criteria for evaluating ideas needs to be created. For example every potential solution should be ranked in terms of feasibility, cost, time to implement etc… all solutions should have pros and cons. A weighted scoring matrix can help determine the best option.
Step 5 – Make the decision
Using the criteria and evaluation process from the last step, you need to come to an agreement on what solution to implement. The greater the number of people involved in the decision making process, the more time this can take.
Step 6 – Execute
Execution is the process of putting into place the plan or sequence of activities that have been put together. They can be executed by an individual or a team.
Step 7 – Evaluate
Look at the results of the decision by evaluating them to see if there is anything that can be learned which could improve future decision making. Doing this is considered best practice as it helps people learn from past mistakes and experiences and ultimately improves decision making skills.