Monday, March 3, 2014

Making Good Decisions in Your Small Business

making good decisionsEvery day in your business, you are required to make decisions – some big and others not so big. Decisions for example, like  …..

Is your business growing to a point where you should hire another staff member? ….. Another delivery was late, should you change couriers or give this one another chance? …. Should you increase your overdraft with the bank? …… Is it time to upgrade your old computer? …… Should you be doing more with social media as part of your digital marketing strategy? ….. Is your website due for a bit of a refresh  or does it require some serious surgery in order to rank better? …… Maybe there are different keywords that you should be chasing? ……. Is there a new product that you need to add to your existing product mix for your customers? ….. What should you have for lunch?
One thing’s for sure, a business owner who doesn’t know how to make good decisions won’t be in business for long!

Successful businesses are run by people who make good decisions – and much more often than not, they can tell you exactly the reasons why they did or didn’t make a particular choice.  So what are some of the most common traps to avoid, to help you make better decisions?
Five deadly decision making traps
1.   Making every decision a big decision.

You’ve got to recognise what are the trivial issues in your business that are simply not worthy of too much thought. Otherwise, you won’t have enough time to allocate to the more significant issues that have a greater impact on your business - and which are therefore deserving of more thinking, research and analysis
2.   Relying upon hearsay or speculation.

The quality of your decision will only be as good as the quality of the information that feeds into it. So be careful of treating what others say as necessarily factual. Just because someone tells you that a particular brand of business accounting software is “useless” doesn’t mean that it is. What they might be really saying to you is they never properly learned how to use it.

3.   Allowing yourself to be rushed into a decision.

Just because someone tells you they need a yes or no from you by the end of the day, doesn’t mean that you have to accept their deadline. Who knows, maybe the timeframe is negotiable? ….. But if you feel you’re being asked to make a major decision and not being given enough time to think things through – then it could be the other party is quite deliberately placing that time pressure upon you so as to exclude critical analysis.  Don’t be afraid to say that you need more time to think about it, so you can make a measured decision that will be right for you and your business.

4.   Too much heart – and not enough head.

Allowing emotion to rule you when you need to make a big decision is almost always a recipe for disaster. If you’re angry for example, then you might tend to focus your decision making on ways to “get even” with the other person – rather than the best way of recovering from a situation that has caused you loss or pain. If we’re feeling intense emotions – be it anger, fear or frustration – then we may not be thinking clearly. We may be failing to see all of the options we have available to us. So, if you’re in an emotional state, try stepping back and taking a few deep breaths before you start deciding on a course of action.

There’s an old saying “ Never make permanent decisions on feelings that may be temporary”. Try to keep your focus on your ultimate goal – but try not to have so much tunnel vision that you are neglecting to recognise the risks and alternatives surrounding a given situation.

5.   Asking the wrong people for advice.

Quite often when you’re faced with having to make a big decision, you’ll turn to other people for their guidance and suggestions. Of itself, this is OK – indeed, it can be a wise thing to do. Seeking counsel from experienced, trusted business advisers  can certainly help you. But too often business owners are unknowingly asking the wrong people. They are seeking advice from others who have a vested interest themselves in the outcome – and stand to gain from a particular choice. There have been incidents when accountants for example, have advised their clients to invest in particular properties, and have been motivated more by the prospect of commissions rather than what is really in the best interest of their client.  

And one final tip in closing……
As far as possible, once you’ve done all your research, and you’ve investigated all of your options, and you’ve assessed the relative pros and cons of each option – and you’ve only made your decision after having slept on it …… well then – it’s time to move into action with confidence and determination.

Try to avoid second-guessing yourself. Worrying about whether you’ve made the right decision will serve no useful purpose. That’s not to say that you shouldn’t formulate a back-up plan. What it is saying, is that when you are implementing your choice, you need to have conviction in your actions. Do not allow any demons of self-doubt to feed inertia within you. Do not allow the fear of making a wrong decision to paralyse you. OK, sometimes you’ll make a wrong call – just make sure that you learn from it and get better for next time!
You might also like to have a look at the Harvard Business Review article on decision making tips

About the author
Brian Carroll is the founder of Performance Development, a management training company in Melbourne, Australia.  He is a qualified psychologist, experienced management coach and an engaging presenter, with a passion for helping people develop their full capabilities. You can find out more about Brian at his Google + profile