This 10-step-process for high level decision-making was presented by Professor Simon Gifford of the IE School of Business. Gifford is a lecturer, entrepreneur, and experienced consultant.
Gifford spoke to the women of SheHive Accra 2016 about using this 10-step-process to make better business decisions, just like the senior executives he coaches.
1. Recognize that there is a decision to be made
Often times, we are presented with a decision but do not realize it. Acknowledging that a decision must be made is a crucial step in running a successful business. Then ask, is this an operational or strategic decision?
An operational decision is one that is made often and about the day-to-day of your business. Strategic decisions are one off, long term decisions that can change the course of your business. If the decision is operational, this level of decision-making processing is not necessary. But if it strategic, then follow along.
2. Frame the problem
Sometimes, the real question is at higher or lower level than the immediate concern you are faced with. But knowing this requires introspection. We may believe that the problem is one thing when it is actually another.
To make the right decisions, ask the right questions and be aware of your capabilities and resources.
3. Define your objectives
What are you trying to achieve by making the decision? For example, are you aiming at being more profitable, increasing your market share (they are both related but may not the same), or increasing exposure?
Which of these objectives are related and may overlap? The questions and decisions they pose are different. Be sure to identify your objectives.
4. Understand your context
In other words, situational appraisal: understand what’s happening in the market now.
Where does your industry stand? Where is the global market going? What do think will happen to your industry or market in the future?
5. Evaluate the situation
Though similar to step 4, this scenario analysis is at a firm or business level. Take the business out of its current context and understand the situation you face in a future context.
What market or external forces affect your decision? What issues in your work capacity, resources, or operations affect the decisions that you will make?
6. Generate some options
What possible decisions you can make? Most times, companies look at it from binary perspective – we either do or don’t do something.
Create a list of responses or options to the issue you’re facing, breaking them down to a small, manageable list. Role play the options through the scenarios you outlined in steps 4 and 5.
7. Option evaluation
Take all your options and evaluate them against the objectives. You may have set more than one objectives. So weigh your objectives.
How does each decision fair against each objective? Which options holds the highest tally for the objectives you care about?
8. Make a decision
Choose the option that fares best against your option, then perform a risk analysis. Do this narration: you implement that option and things go horribly wrong – what could have been wrong? Can you stand the outcome of the worst case scenario?
Make recommendations and negotiate with your key stakeholders. Then decide and commit. (In this step, you should discuss how you will break ties as well).
9. Implement your decision
At this stage get the people involved in the implementation of the option into the decision making process.
Considerations about these stakeholders should have been made in step 1 but at this point, bring them in to discuss the decision, how it was made, and considerations of best and worst case scenario.
10. Evaluate your decision
There should be continuity between the evaluation and implementation steps so that changes can be made.
Profession Gifford concluded by stressing the important of due diligence and process in high level decision making. While this 10-step-process can be easily laid out, enrolling this process in real time takes a lot of effort and resources.
But, the rewards to making well thought out decisions is tremendous on the business, organizational, and personal level.