Decision Making for Management: Rules of Thumb

Every day, managers have to make important decisions that directly impact the company and its employees. It’s important to find common ground in a collaborative setting when making important decisions.

 

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An introduction to decision making management

Decision-making requires you to choose one course of action among many alternatives to find the best solution to your problem. It’s important to ensure you’re making the right ones that benefit your company to work toward better organization and maximum profitability. 

 

The best practice for making informed decisions combines previous knowledge, skills and experiences. Learning the key elements of decision-making will guide you as you encounter issues in the workplace. When you’re seeking the achievement of a goal, there are steps you can take to make the best decisions. 

Follow these steps to make decisions as a manager:

  1. Define the problem. What is the issue?
  2. Gather information. Have everything related to the issue before having a discussion.
  3. Develop your options. Determine multiple solutions based on your data.
  4. Choose the best option. Decide which option works best.
  5. Plan and execute your findings. Make a plan to follow through with your decision.
  6. Follow up with your decision. Find out if your solution worked.

The decision-making process takes time to work through, so recognize that it may take longer than you’d like to find a solution. But when you do, you’ll be able to achieve your goals based on well-informed decisions.

Related: 7 Effective Skills to Help You Become a Better Leader

 

Best practices in decision making

Finding the right approach when making decisions takes time and effort. Here are some best practices to follow:

 

1. Support your team

When special requests warrant a decision from the management team, honor your team’s requests by letting them know you’re working to find a solution. Provide a timeframe for finding the solution, then follow up with them after discussing it with the management team so they know they can rely on you

 

2. Assess the risk

With every decision comes a consequence of risk. Some decisions are riskier than others and may take longer to find solutions. In this case, let your team know the risks involved and if they should expect lengthier wait time. To do what’s best for the company without inflicting unnecessary damage, assess the possibility of extending the project’s timeline

 

3. Teach your team decision-making skills

Companies typically have established decisions or policies regarding certain issues. Take time to train your team on how to reference these policies on budgets, customer interaction or any other issues so they’ll feel more empowered to make certain decisions on their own without needing to ask their manager every time.

Related: How to Start a Mentor Program

 

4. Observe your company’s mission statement and values

Mission statements provide a concise view of the company’s values and motives in business. Before making any important decisions, review these statements to ensure that your decisions align with the company’s mission and values. You’ll likely find that the values support one decision over another. 

 

5. Consider various outcomes

The consequences of business decisions often affect many people, so it’s important to consider various outcomes. When there are issues, it’s common to focus on the negative aspects of the problem. Think about ways you might turn negative aspects into positive ones when you look more closely at an issue. 

 

6. Reference the data

To make an unbiased decision, gather all data related to an issue. Enlist your team members to help you gather the necessary documents, which may be a time-consuming process. Once you can see both sides of the issue, you’ll be ready to find the best solution. 

 

7. Teach effective decision-making skills

Schedule a special meeting that teaches the best ways to make decisions as a group. This may even turn into a business workshop, depending on your time and resources. Knowing best practices for making informed decisions helps foster a harmonious work environment. 

 

8. Write down your decisions

Writing down important decisions made in the workplace is beneficial for many reasons. Journaling about your decisions helps you remember what worked and what didn’t. Plus, it provides a handy reference for making important decisions later on.

Managers typically have the skills, experience and knowledge to support their decision-making process. The types of decisions you’ll face will not always be the same, either. You’ll be asked to provide input on financial issues, employee conflict, company goals, ethical dilemmas and other tough topics that won’t have immediate answers. But if you follow these decision-making guidelines, the process can become more efficient.

 

Decision making FAQs

Here are some of the most frequently asked questions regarding decision-making:

 

What do I do if I have too much information or not enough?

Look for ways to simplify and sort out the unnecessary information. Go back to the main issue and list a few key points required to make the decision, then only use data related to those points. If you have too little data, reach out to the experts at work who can provide you with detailed information to support your decision-making process. Do some research of your own to fill in the gaps.

 

How do I retract a decision I’ve made?

If you’ve made the wrong choice, you may not be able to undo it. But in some cases, you can. With financial decisions, you may be able to request a refund or cancel a contract within a specified timeframe. If you upset someone, you can apologize and make things right. In some cases, you may need the help of an accounting professional or lawyer to recover lost assets.

 

How many people should be involved in making a decision?

The amount of people in the room depends on the issue. It’s smart to involve at least two stakeholders in important decisions, but you may decide to have a team of up to six.

 

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