The 7 Stage Decision Making Process

What is decision making?

Decision making is a process of making choices from available alternatives or generating alternatives through a step-by-step process. Decision making is an act we do every day in our personal and professional lives to achieve certain objectives.

Decision making

Basic elements of decision making

  • Identifying the decision

The first stage of decision making process is to recognise the need to make a decision. Always there is a trigger that prompts one to make a decision. Let us consider a very basic example when you decide to buy groceries from the marketplace. So, what was the trigger or need to make this decision? It was the grocery that was about to exhaust. Take another example of setting up a regional office in a new geography. Here the trigger is the business expansion in an unexplored territory. So, we identified the need to make a decision. This applies to business decisions as well.

  • Collecting information

The next step is gathering information. Taking a leaf from the above example. We need to gather information about items we need to buy, available brands and from where to buy. We need to take information from different sources to have enough choices. Similarly, for the other example, we need to collect information about the potential markets in other regions, targeted products and target customers based on their needs.

  • Analyzing available choices

The next stage of decision making is, analysis of collected information or generated ideas for its suitability to our needs. In the case of a business decision where your decision may impact many stakeholders, you must go with multiple solutions. Different stakeholders can have different needs. Consider an example if you want to buy software that suits the needs of sales, purchase, and finance. The analysis will help find if one or multiple solutions are required.

To generate more options or ideas one can go for brainstorming with the team or peers, as collective wisdom is the best way for decision making in critical situations or to solve a complex problem. This helps in breaking out of normal thinking patterns and generating some creative ideas.

  • Explore the Best

In the previous stage, we shortlisted multiple options that may suit our needs. Now the question is how to choose the best option out of those shortlisted probable options. Each decision alternative has a certain amount of risk. To narrow down on the alternatives, you can go for:

  • Pros and cons analysis
  • SWOT analysis

For each shortlisted alternative and then go for a decision matrix.

  • Selection of the best choice

Now you have come to a stage where you need to make a decision. Based on the above analysis you must choose an alternative. There is a possibility of deciding with more than one alternative if it solves the issues in a better way.

The fallacy of this process is, that we restrict our thought within selected alternatives and may get deprived of a more suited alternative. So never restrict your or your team’s imagination.

  • Act on it

Now have taken a decision, it is time for its implementation. But before plunging into the implementation mode, pause and look back. See if there is anything missing. See if the team is completely on board with the decision. If the answer is not affirmative, then better, go back to the previous appropriate stage. Making a hurried decision and then implementing it, has a high probability of getting failed.

Your decision is as good as how factual information is being used and the research you have done in your analysis of problems and alternatives. You must be very careful of falling prey to blind spots like overconfidence and group thinking. To eliminate this issue everyone in the team must have the freedom to air their views without any fear of superiors or bosses. So be very cautious while going through the various stages of the decision making process. Any wrong reference will lead to a wrong conclusion.

  • Review the outcome

Review of any decision is very important to check if you are getting the intended results after implementing the decision or if the problem got resolved for which you have taken the decision.

Before implementing the decision, it is important to properly communicate it to the team affected by your decision even if they are not part of decision making process. Risks and benefits are to be explained to the extent until they get aligned with the decision. But it must not be imposed or dictatorial. During these explanations, if any member points to any flaws or casts apprehension on any of the decision elements, he must be given due consideration. After review if you find that a correction needed, it must be done without any prejudice to who has suggested it.

How to make your decisions great?

We all know the decision can be unilateral taken by the leader or consultative where brainstorming is the key to getting great ideas of many minds. So, what are the ways to make a decision great? Let us have a look at the below elements to make your decision a great one.

  • Due consideration is to be given to different viewpoints.
  • These different views must come from people with relevant expertise. It will help broaden decision makers perspectives.
  • The decision must be as close as possible to the action. Here opinion of the lower level in the organization who works on the ground and has extensive relevant experience matters a lot.
  • The focus of the decision process must be the root cause and not the symptom even if you need to control the symptom on an urgent basis.
  • Accountability is the key to any decision. It must be taken by an accountable person even though he has taken ideas from many in the team or peers or from a cross-functional team.
  • It must fulfil the immediate need with an eye on the long-term impact of the decision.
  • As discussed earlier it must be communicated well with all stakeholders. Even an iota of doubt or misinterpretation by the team can lead to unintended impacts.
  • Most importantly all decisions must be in time.

Further Reading

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