by Guest Author on September 9, 2013
Having an ‘oops’ moment?
When was the last time you made a decision that completely blew up in your face? You’re lucky if it was a long time ago. You’re especially lucky if it was a long time ago and you have been a leader all this while.
The brutal fact is that there is no easy way to make smart decisions. In fact, there is no way to make smart decisions. You just make a decision; time will tell if it was smart or not. What can be, and should be, smart though is your thought process at the time of making a decision.
You work with what you have and work to the best of your ability. Following are some of the approaches I take when making decisions in my business as well as in personal life.
Stick to a logical thought process
I know life is pretty random, but that randomness aside, I make sure I stick to a sound logical process for arriving at any decision.
How do you know you absolutely do want to hire someone? Based on their CV, their references, their personality, or the sample test they just cracked? Or based on all of it?
A lot of factors, some more so than others, influence your decision. But you only hire a person when you are convinced they would make an excellent addition to your team.
Nobody can say whether whom you’ve hired will live up to your expectations or not. But you are very sure of what you are doing when you ask them to sign on the dotted line because you have taken stock of the entire situation, considered your options, are happy with what the other person is bringing to the table, and are overall in agreement with your instincts as well as your head.
There you go. Taking proper stock of a situation, understanding your options, and then proceeding in a way that makes sense to your head as well as to your heart, is the formula (if ever there could be one) for making smart decisions.
Consult your circle of trusted people
For important decisions that could have a long-term impact on your business or family, you must take your trusted circle of friends and advisers into confidence. You may or may not agree with them, and their advice may or may not be good, but you will have access to a larger number of perspectives.
(Remember, however, that when a big decision backfires, as a leader it will be your head on the line. Your advisers may or may not back you then, which is why I feel first and foremost a leader should be gutsy and go by their instincts, even if it means doing the counter-intuitive thing.)
Research well and zero in on the most important stuff
Access to good information is the foundation of a good decision. But when information is overwhelming, you should know what to discard and what to keep.
For example, when writing this post I had to be clear about what I wanted to include — only the most important and pertinent bits. Because otherwise the topic is so vast that we could be here all our lives and still not run out of things to discuss.
Given the word limit I had to make a choice. That involved what to include and what to exclude. I had to be ruthless about it.
After everything, when things go wrong
“How could I be so stupid?” our former prez JFK reportedly said after ordering the Bay of Pigs invasion in 1961.
Nobody sets out to make a bad decision. But there are simply too many variables involved in long-term, or even short-term, planning. Merely having great ideas is not enough; you also need them to be executed flawlessly, and for that you do need luck on your side.
When a decision turns out to be a disaster, accusations fly from all quarters and we are told we should have done this or that instead.
But the fact of the matter is, that when we were actually faced with making a particular decision, in those circumstances, in that time, based on the information available to us, based on our understanding of things, on our risk appetite, on our calculations, on our goals, and given the hand that we were dealt, we couldn’t have done this or that.
It had to be the way we did it.
Your critics don’t know the half of it, but you do. You make a decision and you stand by it. You do take a good note of the lessons learned, and internalize them for the future, but you do not turn on yourself like others do.
Conclusion: Good decision making is basically about having a well-rounded thought process, access to reliable and adequate information, and a strong sense of instinct. Underlining all of that is courage. That is what I believe in and practice in my life. What according to you are the components of smart decision making? Do leave a comment below and let me know!
Andrew Cravenho is the CEO of CBAC LLC & Factor Auction. As a serial entrepreneur, Andrew focuses on helping both small and medium sized businesses take control of their cash flow. Prior to CBAC, Andrew founded an annuity financing company relieving tort victims of financial hardship.