Every day, we make choices. Some are insignificant, while others have the potential to impact our lives. Because we have to live with the consequences of our choices, the choices we make… decide to a considerable part our happiness or misery. It’s impossible to make excellent decisions all of the time. It simply does not happen. However, we can make good decisions that we can live with and develop from.
Decision-Making Process
We must devote time to researching the issues surrounding the choices we are attempting to make. But how can we “study it out in our heads” effectively? Decision-making strategies that are effective can help. We’ll go over three tactics in this section to help you make better choices in both your personal and professional lives. The following are the three strategies:
Recognize the problem.
Get the information you require.
Make sure your choice is in line with your ideals.
Do You Understand the Problem?
Understanding the subject or problem you’re working on is the first step in making good decisions. This phase requires you to take a breath and double-check that you’re asking the appropriate questions. After all, you’ll have a hard time finding the proper answer if you don’t know what the real issue is.
Bad decisions are frequently the result of inaccurate assumptions about the problem. One explanation for this is that people can be overconfident in their abilities. They overestimate their chances of success and neglect to take the time to gather information. In this situation, people are more prone to misdiagnose the condition and not seek help from others. They’ve effectively produced the illusion of learning that you learned about last semester in the learning techniques class—when one’s brain switches off because of familiarity.
The word of caution here is to not make rash decisions. “Am I confident because I’ve properly investigated the problem or because I assume I just know?” ask yourself if you’re unsure about a decision. Take time to double-check your assumptions if you’re depending solely on your intuition or previous experience.
You can categorize the situation into one of three categories to assist you grasp it: simple, complex, or unclear.
Simple: The issue is obvious and simple to comprehend.
Complex: The issue is complex, but with some effort, it can be understood.
Unclear: The problem is either too difficult to comprehend or contains unknown elements.
If the problem is simple, you can weigh the advantages and disadvantages before making a conclusion based on your best decision. Because you often have to break the problem down into smaller pieces, gather data, undertake analysis, and confer with others, deciding on complex problems takes more time and effort. The distinction between complex and unclear problems is that with complex problems, you can gather all of the information you need to make a conclusion with a little effort.
Problems that are unclear are simply that: unclear. Either there is a lack of knowledge or the problem has become so complex that you are unable to understand it. When this arises, you must break the problem down into smaller chunks and make the best decision possible for the next step forward. This usually entails formulating a hypothesis (an informed guess) about what you believe will occur, and then putting your theory to the test to see if it is correct. The process is then repeated until you have enough information to make a final conclusion. When dealing with unclear problems, it’s critical to identify and prioritize your risks while also being cautious with your resources. Prepare to change your strategy when you have a better understanding of the situation.
To put these techniques into practice, consider some of the decisions you face and how they might fall into one of the three categories.
Do You Have The Information That You Need?
Gathering information is another crucial decision-making strategy. Knowing the facts is crucial to getting to the bottom of a problem. Good information can help you see things you wouldn’t have noticed otherwise. Data driven judgments are very critical in business and finance. Make sure the data you collect is reliable and relevant to the problem you’re seeking to solve.
It’s important to remember that you’ll never know everything. If you don’t stay focused, info can get overwhelming. You’ll probably get to a point where you need to make the best option possible based on the information you have.
Is your choice in line with your values?
The third effective decision-making technique is based on values. Making decisions that are in line with our values brings us peace and satisfaction. This is why it’s so important to pause and ask ourselves, “Does this decision line with my values?” on a regular basis. We should not proceed if the response is “no.” Instead, we should restart the process to ensure that we fully comprehend the situation and have all of the information we require to make an informed conclusion.
You can use the management framework’s strength by linking decisions back to your values. You’ll be more likely to make good decisions that are linked to your mission and values, follow your strategy, and are prioritized and monitored if you get in the habit of making decisions that are aligned with the framework.
Applying The Decision Making Process
Let’s put the three decision making process to the test on a scenario from your semester project. Assume your values are “honesty, establishing strong communities, and kindness,” and your objective is to “assist neighbors in connecting with one another and forming a feeling of community.” You plan to accomplish this by attracting as many people as possible to modest neighborhood lemonade booths. You must first determine the price at which you will sell your lemonade.
Following a break-even study, you find that $1 per cup is the most lucrative pricing. However, before you make your final decision, consider whether this pricing is consistent with your values and goal. You realize that charging that much will only earn you roughly 35% of the demand. That contradicts your ideals, as your goal is to bring as many people out to visiting as possible. As a result, you reconsider and decide to charge simply enough to cover your expenses so that you can help additional neighbors.
As you can see from the example above, making excellent decisions requires relating your decisions to your values and mission. Let’s explore a different scenario in which gathering information is more difficult. Assume you’re using the event market to supplement your family’s income. You must establish your price such that you can profit as much as possible. The issue is that you have no idea how much lemonade people are willing to pay. How will you obtain the information you require? You must spend time researching your market and identifying unmet need in order to be a successful business.
A excellent place to start is with potential clients to determine what they require and how much they are willing to spend for it. Another crucial step is to research your competition to determine how much they charge for similar products and how strong their demand is. You might also keep note of your sales price and compare it to that of other locations and weather patterns. To maximize your profit, you may use this data to set different rates for different weather patterns and venues. Naturally, conducting all of this research and testing would take more time, but by rigorously researching your industry and analyzing your performance, you may have the facts you require to make a data-driven conclusion.
Making smart judgments requires information, but what if you don’t have all of the information you require? Let’s look at another instance in which the problem isn’t evident. You’re trying to generate money for cancer research in this scenario. To build a closer link to your cause, you’ve decided to call your lemonade “Lemon-Aid.” You’ve reduced your choices down to three alternative approaches. One option is to install “Lemon-Aid” vending machines in high-traffic areas such as hospitals, train stations, airports, and other public places. The second concept is to collaborate with other cancer charities to sell “Lemon-Aid” at their fundraising events and fundraisers. The third option is to form a partnership with large beverage corporations such as Coca-Cola or Pepsi to rebrand their lemonade as “Lemon-Aid” and persuade them to donate a portion of their profits to cancer research.
You’re not sure which method would be the most effective. Because they will be competing against soda vending machines, the vending machines are pricey and have minimal profit margins. Even if no one buys lemonade, they have cheaper labor costs and make excellent billboards. Partnering with well-established organizations provides the lowest start-up expenses and allows you to reach a more receptive audience. The occurrences, on the other hand, are unpredictable and difficult to plan around. Working with a major beverage business would offer your “Lemon-Aid” global reach and the best chance of raising the most money, but negotiating an arrangement may take years.
When a situation is unclear, you opt to follow the decision-making processes and build a hypothesis. Your hypothesis is that partnering with a large beverage corporation is the best method to raise money for cancer research. You must first establish the worth of your proposition to them before approaching them. You like the suggestion, but you’re not sure if you can readily test it by calling a beverage firm and asking if they’d be interested. You do this and discover that they do, in fact, require proof that your product and proposition are sound. You also discover that they are really accommodating and provide you with assistance as well as an application that outlines everything you’ll need to submit.
You feel more confident about partnering with a beverage firm now that you’ve resolved this issue, but you still need to figure out how to create your brand.
Vending machines and working with a charity both appear to be viable choices. Rather than going “all-in” on one technique, you opt to test each one. You begin by collaborating with well-established nonprofits. Then you go to a local hospital and try out a vending machine. You discover that the test was a huge success in your vending machine work. Customers said it felt fantastic to be able to contribute to cancer research in such a simple and straightforward way. However, through your work with local charities, you’ve discovered that collaborating with other organizations is extremely tough. You’ll see that their objectives aren’t always in sync.
Some of these charities are also collaborating with major corporations, including the beverage companies you want to collaborate with. You decide to use vending machines while seeking to establish a contract with beverage firms after evaluating your theories. This choice allows you to begin building your brand in a complementary manner that beverage firms would appreciate.