How To Make an Informed Decision: 6 Steps, Tips and Example

Updated September 30, 2022

When making an important decision, it's useful to have in-depth knowledge and research to help you make an informed choice. Learning how to make an informed decision can help you have confidence that you're choosing the right option. In this article, we discuss what informed decision-making is and provide a list of steps you can follow to make a well-informed decision.

Related: How To Become a Better Decision Maker

What is an informed decision?

An informed decision is a choice that individuals make once they have all the information related to the decision topic. It involves analyzing potential outcomes, benefits and risks associated with each option, then deciding which choice is the best for you. After considering all factors involved with each option, you can decide which option meets your needs and brings you closer to achieving your goals.

Related: 15 Ways To Improve Your Decision-Making Skills

Importance of making informed decisions

Here are several reasons it's important to make informed decisions:

  • Improving confidence: Making an informed decision may help individuals feel more confident that they made the correct choice and keep them from second-guessing their decision.

  • Creating more realistic expectations: With informed decision-making, individuals can have a better idea of the risks and benefits related to each option, which gives them more realistic expectations of the decision's outcome.

  • Learning more options: Receiving information to make an informed decision may help you learn more options that you might not have considered before.

  • Allowing for more control: When individuals make informed decisions, it gives them more control over to make the choice that they feel is best for them after they've considered all variables related to reach choice.

How to make an informed decision

Use these steps to help you make an informed decision:

1. Determine the issue

First, determine the issue that the informed decision can solve. Identify the aspects of your life that you want to change or problems you want to solve by making a decision. To identify the issue, ask yourself which option can help you achieve your goals and what obstacles relate to each decision. For example, your issue may be that you must decide on a format for a presentation, or you may have to choose which college to attend.

2. Gather data

Once you identify the issue, begin gathering information that can help you make an informed decision. Ask questions that can offer you more insight into each decision. Here are some questions that you can ask yourself and others to find more information:

  • How does this change affect me?

  • What is my intuition?

  • Does this decision impact my short-term and long-term goals?

  • What are my specific options?

  • What are the negative effects of each option?

  • Is this the right time to make the decision?

3. Research your options

Perform research to understand the outcome of each decision. You can use resources like market research, academic studies or articles written by individuals experiencing similar issues. This research can help you analyze all possible outcomes of your decision.

4. Consider the outcomes

Once you've done your research, consider the outcome of each decision. Compare the positive and negative aspects of each option to see which decision is a better choice. You may create a list of the pros and cons associated with each decision, then compare the lists together to see which option is the best.

5. Make a decision

Take time to analyze your list of the pros and cons for each option, then make your informed decision. When making your decision, it's important to consider all research and questions related to each option. It's helpful to have a colleague or friend present when making your decision so that you can receive their feedback and support.

Related: How To Make Important Decisions About Your Career

6. Review the outcome of your decision

Allow some time to pass before reviewing the result of your decision. Look at the impact that the decision had on you and the positive and negative outcomes of the decision. Reviewing your decision can help you make more informed decisions in the future.

Tips for making an informed decision

Here are some tips to keep in mind when making an informed decision:

Take a reasonable amount of time to decide

While making an informed decision, it's important to take a reasonable amount of time to decide so that your options don't change or expire. If too much time passes, the variables and outcome of each decision may shift. For example, if you're deciding which job offer to pursue, you want to decide before each job offer expires.

Talk to others about your decision

It's helpful to talk to other individuals about your decision. You can provide them with details about each option, like what the variables are, how each decision may impact you and the various outcomes. They may provide you with meaningful feedback or valuable advice about which option you should take. It's helpful if they've encountered a decision related to yours so that you can ask them how they decided on their decision, what factors led them to their decision and what the outcome of their decision was.

Related: Giving and Receiving Feedback: Definitions and Examples

Informed decision in the workplace

Here are several ways that professionals use informed decisions in various industries:

  • Healthcare: Medical professionals offer their patients extensive information on the state of their health, their diagnoses and healthcare options to help them make informed decisions about their treatment plans.

  • Law enforcement: Members of law enforcement and legal personnel provide individuals attending court with knowledge of laws, regulations and penalties to help them make informed decisions regarding their trial.

  • Insurance: Individuals may seek information from insurance professionals so that they can make informed decisions about their insurance policy.

  • Psychology: Therapists and counselors provide their patients with information about their behaviors, treatments and medication so that they can make an informed decision about their treatment.

Informed decision examples

Here are some examples of informed decision-making:

Example 1

Luke wants to determine which college he should attend in the fall. He wants to make an informed decision so that he has confidence that he made the right choice. First, Luke determines the issue by realizing he is having a challenging time choosing between two colleges, Navy State University and Buckeye Hill University. Next, he gathers data to help him better understand each college. To do this, he contacts each college's admissions office and asks them questions about the college. He asks each college the following questions:

  • What is the tuition rate for this school?

  • What is the graduation rate?

  • What are your graduate programs like?

  • How big is the average class size?

  • Do you have alumni that I can get in touch with?

Then, Luke performs research on each school to identify the pros and cons of attending by looking up reviews online from previous students and reading articles written by alumni. He finds that Navy State College has a higher rate of tuition and smaller average class size, though many alumni believe that the school's academics are going downhill. Buckeye Hill University has a lower tuition, though the classes are double the average size of Navy State's classes. The alumni of Buckeye Hill University believe that the college offers excellent academic courses that prepare individuals for a job after college.

He consults with his teachers to get their feedback on which college to choose. He has several teachers tell him that a school's academic performance is the most important variable when deciding which college to attend. When making his informed decision, Luke decides that he will attend Buckeye Hill University since they have more positive academic reviews.

Example 2

Marsha is seeking a position as a teacher at an elementary school, and she wants to make an informed decision about which school to attend. First, she identifies her issue by noticing that she has two job offers from different elementary schools, Beaver Road Elementary School and Green Hill Elementary. She gathers data to better understand the pros and cons of working at each school. To do this, she reaches out to the principal of each school to discuss information about the position. Here are the questions that she asks each principal:

  • What is the salary for this position?

  • What is the growth rate in this job?

  • What is the culture like among staff?

  • How do you resolve student issues?

  • What are your policies for teaching plans?

Then, she performs her own research by looking up online reviews of each school. She finds that several parents had positive reviews about Beaver Road Elementary School, though many parents felt that Green Hill Elementary's administration wasn't supportive to parents or staff. Marsha then creates a pros and cons list for working at each school. For Beaver Road Elementary School, she will earn a higher salary, though she is unfamiliar with the school's guidelines for creating teaching plans. For Green Hill Elementary, her salary is lower, though she is more comfortable with the school's guidelines for producing teaching plans.

She consults with her friends that have experienced similar dilemmas, and they advise her to choose Beaver Road Elementary School so that she can learn new ways of creating teaching plans, which may help her when switching jobs or trying to achieve career advancement. She decides to work at Beaver Road Elementary School since she can earn a higher wage and expand her skills while creating teaching plans.

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