The Secret to Better Decisions

Ever noticed how little decisions can take just as long as big ones? How it can take just as much effort to decide what colour to paint your bedroom as it does to decide which model of car to buy?

At first this doesn't make sense. Surely we should take a lot longer over a decision to spend $40,000 on a car than $40 on a tin of paint? But often we don't - and there is a simple reason why.

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Let's explore these two examples.

The hardest thing about deciding on a paint colour for any purpose is that we can't actually see the result until we have made the investment (in time and/or money) and finished the job.

Those of us with an untrained eye know only too well that, despite test-pots and computer simulations, initial perceptions can be very different from the reality which strikes as the last few roller strokes are made.

Contrast the car. This is easy to visualise. A test-drive puts us behind the wheel of a brand new car. A car which is clean, shiny and devoid of crumbs and wrappers all over the floor. A car without rattles. A car with that characteristic 'new car' smell.

The perception created by advertising becomes reality, our emotions kick in and we just want to keep on driving. Before we know it we are signing the papers!

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The key difference between these two examples is not the relative size of the decisions, nor differing levels of emotional investment.

The key difference is the contrasting degrees of CLARITY about the ultimate outcome at the time the decision is made. In the case of the car, the test-drive experience provides almost surreal clarity well before we need to make a decision, hence 'easy' decision. In the case of colour choice, clarity is not achieved until well after the decision has been made: 'hard' decision.

Business decisions can, of course, be much more complex than these examples. To be made effectively, business decisions can require considerable analysis, review and consultation. A host of decision-making tools have been developed to assist this process.

But business is also characterised by numerous small, day-to-day decisions. These can be just as taxing on the resources of decision makers if there is not clarity of purpose or direction.

Well-run businesses know this. They make significant investment up-front in clarifying and communicating their purpose. They establish systems and processes, rules and guidelines which give people at all levels the clarity and confidence to make good, quick decisions themselves. As a result, routine decisions get made more quickly, leaving more time for proper consideration of the truly big ones.

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Effective decision making is a big topic which cannot be covered sufficiently in an article of this length. In future articles we will return to this topic and look at some of the tools and processes which can enable better decision making. In the meantime, your thoughts on the issue would be most welcome: feedback@businesssimplification.com.au

© David Brewster, March 2002