Decision Making: Speed, Flexibility and Consistency

Doru Catana
A free video tutorial from Doru Catana
Digital Marketing & Productivity Enthusiast
4.4 instructor rating • 8 courses • 50,810 students

Lecture description

Nothing influences more the speed at which you make progress than your decision making speed. That's why it's essential you have complete understanding of the different styles of decision making, the risks and traps and not waste any time.

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53:53 of on-demand video • Updated November 2016

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English [Auto] Decision making and will cover the following. What it is different styles of decision making and the pros and cons of each one and most importantly traps and risks either for individual or group decision making. So let's proceed. One of the most common mistakes is that it is seen as an event and not as a process. If we go by the dictionary definition it's the process of selecting a choice from a range of possible options with the goal of achieving a very specific objective. In the ideal way to analyze it is with the following mind frame. You first prepare then make the actual decision and then you communicate it to the relevant parties execute it and then measure the results and make adjustments depending on the feedback you get. And during this five step process you need to always have in mind the following criteria. First what is your desired outcome. What is the purpose of that decision. Second what are all the available choices. Saying just an option usually means saying no to all the other. So always factor that in. Third when is that decision needed. Is it important. Does taking it later limit your existing options. Does it save your organization from losses or does it generate additional gains and forth. How will that decision impact be it employees clients shareholders or business partners. At first you may need to go over the sequence in a formal manner until you fully internalize it. But keeping track of these criteria will save you lots of headaches down the road. And the bigger your organization the more important it is not to overlook any of them. Now let's go over to fifes that process of decision making once more but in detail as I said Preparation is key because the more you investigate the less you invest. Good preparation can open up more choices or can make the decision much easier and exposes your organization to less risk. However don't overdo it and risk paralysis by analysis where all you do is research and don't get to actually doing something about it. Or to quote General Patton. A good plan violently executed now is better than a perfect plan executed next week. Maybe you can leave out the violent part when making decisions for your business but the speed at which you decide is always a defining factor in your ability to react to market changes customer needs and competitive strategies. After finishing the preparation side of things you just take the decision. And here we have quite a few things to discuss because there are several approaches to doing so. First we have the autocratic decisions which practically are dictatorial. One man has all the power and if he or she is a gifted visionary that's good for your business because decisions are good and thick and fast. However if the person at the home of your ship takes the bad decision then you should consider having already your life jacket because that ship can't sink very fast. Another downside for autocratic decision making is that people from the ranks might feel as if their input doesn't matter and will become unsatisfied with their workplace. Then we have participator of decision making where it's pretty much the autocratic one. However the person in charge takes input from Team Leaders from a council or board of directors. This usually steers the company away from any dangers that the leader has previously been blind to. Having multiple relevant viewpoints on any problem is always a good thing and a good way to avoid risk. The downside is that it's slower than autocratic decision making. So unless communication in your organization is streamlined then you might have a problem. Then we have democratic decision making which is the best so far but has its flaws as well. For starters it's slower than the previous two. Also it has the risk of people agreeing just to conform with the group. And if you look at it closely at the end of the day it's still a dictatorship where the majority decides for everyone and for our last form of decision making. We have consensus. This is by far the best of the four. However it's the hardest to implement. Takes a lot of negotiating evaluating inputs and reaching common ground. Stephen Covey called this the third alternative going for win win. But if you do manage to get this right and integrated in the way you run things the beneficial impact that has on your business is tremendous. You have more synergy within your teams happier more efficient workers. People feel part of a whole and get the sense of community and contributing to a higher purpose. As they say big rewards come to those who solve big problems. Moving on to the third step of the decision making process. We have another important part. Communication boils down to just three things. Number one what the decision was number two. Who made it. And number three Why was it made in all parties that are influenced by that decision need to be informed. And it's important to choose the appropriate channel for each one. In many cases an email is enough. In some cases a more personal approach might be required. So always evaluate the channel through which you communicate your decisions for a fourth step we have execution which I won't go into detail because it varies from company to company. In layman's terms this is about how you do things your own procedures and that's totally up to you. And the last step is measuring the results and impact your choice has and adapt if needed. And the reason why this is extremely important is because not all your decisions will be the right ones and being able to react and get back on track can limit the damage or bad decisions can cause. And since we reached this point I'd like to break three popular myths about decision make number one the CEO decides quite often that's who people blame when a company isn't doing well. Although many of the important decisions are outside of their control. Either he or she needs to take into account internal factors policies and input that is not public or the board decides. But long story short the bigger the organization the less power a single man holds and the more variables that go into any decision. Number two decisions are made in a meeting room at a scheduled time. This again is wrong because many come from people involved in actual work processes or after quick discussions at the water cooler. While it's true that they might take a formal shape during a meeting more often than not they come from an external need be it a work sequence or a market need a client request and so on. And for our third common myth is they are highly intellectual although we like to believe that our decisions are logical. They are not. We make a lot of gut feeling choices and quite often they are emotional social and sometimes even political because at the end of the day it's human nature to feel as much as we would like to be at times. We're not robots and we've reached the part of the video where I'd like to discuss a bit in detail. The biggest problems and risks of decision making one of which is cognitive biases more precisely. Many of our choices are not rational or even consistent with previous ones. Many studies have shown that people tend to be overconfident and might end up taking bigger risks than they initially estimated. Then comes even worse news. The sunk cost effect where after we invest significant resources be it time or money we're less willing to let it go. Although it's a lost cause and we end up losing even more resources. You can see this problem in people who gamble after losing a sum of money they lose even more trying to cover that initial loss. Don't fall into the trap of fighting to get back to zero. Then we have the recency effect where we trust more the information that is more readily available to us and then we have one of the most common traps which is that we are actively looking for data that supports our current views and ignore or rationalize the data that is in conflict with our beliefs. So how do you overcome all these challenges. How do you not make these mistakes. And the answer is surprisingly simple. Step number 1. Be aware of them. Simple as that. If you know there are traps under road ahead you thread carefully and avoid most of them. Step number 2. Don't disregard feedback and take your time with it. In fact welcome negative feedback and opinions that contradict your own. And Step Number 3 make Kandur part of your company culture Bernanos the people that promoted most of this Kandur element is Jack Welch who many consider one of the best CEOs of the century. He links this attributes to all successful companies that are looking for fast sustainable growth. The ability to fully express yourself and give feedback even if negative without people feeling hurt oppressed or personally attacked. And before we wrap this up I'd like to talk to those that are not a one man show but part of a bigger team. Here's the good news group decisions are more often than not better than individual ones. In fact a study on the TV show Who Wants To Be A Millionaire found that 91 percent of the answers by the audience were correct staggering. However in order for group decisions to be effective they need to have these two important characteristics. For starters the group needs to be diverse different cultures disciplines perspectives expertise then you need to have independence. The candor I was referring to earlier. People don't need to feel the need to conform because if they do then you go into group think something studied by psychologist Irving Janise. And if I were to simplify all his life work in one sentence people will go along to get along. And if your team is suffering from groupthink then you get all the problems of group decision making and none of the benefits. That's why it's your responsibility to stimulate conflict and debate and not conflict as in violence and personal attacks but different points of view. So Islander's decision making video with one important note don't overstress about always making the right decisions each and every time. Focus more on correcting bad ones when possible and always improve this be that which you make choices well at the same time aiming for consensus within your organization and next video will talk about your comfort zone and how the way you see things is not always the way things really are. See you in the next video.