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How to Enhance the Decision-Making Skills of Managers

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StrategyDriven Decision-Making Article | How to Enhance the Decision-Making Skills of ManagersBuilding a successful business requires the ability to make decisions. It is imperative for entrepreneurs to make the right decisions and put them into action effectively.

As humans, we have the privilege of being able to learn and enhance our decision-making skills.

You will find a list of skills you will need to develop in order to become a more effective manager and leader in this guide.

What Can You Do to Make Better Decisions?

Management decisions have a direct impact on everyday business. Making the correct decisions requires using the most relevant information and delivering the intended results. In any situation, whether decisions affect one person or a whole organization, a step-by-step framework ensures good results.

Below are some steps to consider taking to enhance your decision-making skills within the workplace:

  • Find the Problem: Don’t forget to ask questions, get feedback from key players, and consider all angles. If you thoroughly understand the scenario, you will be in a better position to make an informed decision.
  • Re-Examine the Data: Make sure you collect as many applicable details as possible. A team member familiar with the work area should be assigned data-gathering tasks whenever you’re considering a bigger decision.
  • Examine Each Choice: Choose the path that offers the best chance of success after weighing the pros and cons of various options.
  • Pick a Plan of Action: Decide on the overall best course of action.
  • Execute Your Plan: Develop a clear, specific, and actionable plan. Provide employees with information and encourage them to go forward with the plan.
  • Check Your Final Results: You can learn from every course of action you take. Take note of your results to identify areas where your decisions need to be improved. Is the data you have accurate? Is each option being considered or recognized? How well do you communicate with your employees?
  • Stay Up to Date With Plans: Reorient your course of action by making the necessary changes. Keeping track of the things that worked and what didn’t will enable you to make better decisions in the future.

Decision-Making Skills for Effective Leadership

The below skills will enhance your ability to make the best decisions to drive personal and professional development, growth, and success:

  • Identifying Problems: Making decisions requires the ability to recognize problems and find solutions. Problem-solving skills allow you to remain calm under pressure and find the best possible solutions.
  • Processing Data: Assimilate the information by performing your own analysis or delegating the task to the corresponding employees. It is also important to know what type of data you require.
  • Managing Your Time: It is necessary to make certain decisions quickly. The ability to make informed decisions within the required timeframe is essential for success.
  • Communicating Effectively: Decisions must be communicated clearly and effectively. It is possible to stay up to date on project progress, work processes, and employee performance by actively listening. When you need to make a quick decision, each conversation becomes information.
  • Maintaining Humility: Sometimes it’s about acknowledging that another employee’s solution is better than yours. Making the right choice is essential, regardless of who developed the solution.
  • <strong”>Practicing Mediation: /strong> Achieving fairness, assessing everyone’s viewpoint, and diffusing conflict are crucial.
  • Planning: There are often unexpected pitfalls associated with business decisions. Having a good plan allows your team to avoid unforeseen problems.
  • Ongoing Training for Leadership Best Practices: The best decisions are useless unless they are shared with others. Leading effectively is dependent on a leader’s ability to convince others of the rightness of their decisions.

What You Need to Know About Decision Making

A business’s success depends on its ability to make decisions. Making decisions is most effective when evidence is interpreted in conjunction with previous experience. Take advantage of decision-making opportunities in your business and learn from your decisions. As you gain experience, you will become more effective and comfortable making decisions.

What are Some Ways that You Can Encourage Ethical Decision-Making?

Those who make ethical decisions consider their company’s bottom line as well as their community’s impact. It is encouraged that employees do the same. It is not only beneficial to your business to make ethical decisions, but also to the community as a whole.

One way to achieve better decision-making skills in the workplace is to invest in executive coaching for professionals.

Evaluation and Control Program Warning Flag 1 – The Illusion of Accuracy

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Evaluation and Control Program Warning Flag 1 - The Illusion of Accuracy | StrategyDriven Evaluation and Control Article | Warning Flag“Measure with a micrometer, mark with a crayon, and cut with a chainsaw”
Author Unknown

Evaluation and control programs provide executives and managers with the critical information they need to make effective business decisions. However, an equally critical component of the decision-making process is the understanding that no data-set is a perfect reflection of reality. Therefore, it is important for business leaders to recognize the potential inaccuracies associated with their data in order to fully assess the risks these flaws pose to the achievement of desired outcomes.[wcm_restrict plans=”25541, 25542, 25653″]

The purpose of every evaluation and control program is to accurately represent the business conditions being monitored. Because of assumptions, averages, and/or approximations applied by evaluation processes and measurement systems, reality can never be perfectly represented. Leaders having an errant understanding of data accuracy will either over or underestimate the risk associated with decision options. Therefore, it is important for decision-makers to understand the accuracy of the data presented to them. Only with this information can the risks associated with each decision option be properly assessed and the decision-maker afforded the opportunity to select the best solution alternative.

The illusion of accuracy created by an evaluation method or measurement mechanism is a result of either the measurement process itself or the way in which the process is executed. While not all inclusive, the four lists below, Process-Based Warning Flags, Process Execution Warning Flags – Behaviors, Potential, Observable Results, and Potential Causes, are designed to help organization leaders recognize whether their evaluation processes and measurement systems unduly create the appearance of accuracy where less, little, or none exists. Only after a problem is recognized and its causes identified can the needed action be taken to move the organization toward improved performance.

Process-Based Warning Flags

  • analytical processes don’t reinforce the application of mathematical principles for the use of decimals
  • documents are not screened for either the use of absolute terms and/or non-observable adjectives
  • procedures direct measurement beyond the limitations of prescribed measurement equipment, either out of range or less than one-half measurement increment
  • lack of independent information verification through the use of alternate measurement devices

Process Execution Warning Flags – Behaviors

  • conclusions stated as facts
  • assignment of emotional labels
  • lack of leadership challenge to the use of absolution terms or excessive numeric accuracy

Potential, Observable Results

  • distorted perception of actual circumstances
  • division between team members; often leading to deadlocks and infighting
  • faulted decisions, either overly conservative or aggressive
  • excessive use of decimal places
  • use of absolutes, such as all, none, always, and never

Potential Causes

  • undue desire for the feeling of security provided by having ‘hard’ data
  • misunderstanding or lack of knowledge and/or experience in the application of sound mathematic principles
  • lack of relevant situational experience resulting in excessive data focus
  • inability to relate past experience with current circumstances

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[/wcm_nonmember]Additional Information

The following StrategyDriven recommended best practices are designed to reduce the likelihood leaders will receive data presented with an exaggerated accuracy.

Decision-Making Warning Flag 1b – Weak Analogies

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StrategyDriven Decision Making Article | Decision-Making Warning Flag 1b - Weak Analogies“The fallacy of Weak analogy is committed when a conclusion is based on an insufficient, poor, or inadequate analogy. The analogy offered as evidence is faulty because it is irrelevant; the claimed similarity is superficial or unrelated to the issue at stake in the argument. Or the analogy may be relevant to some extent yet overlooks or ignores significant dissimilarities between the analogs.”

Paul Leclerc
Community College of Rhode Island

Citizens have been asked to cast their vote for a referendum requiring those seeking to purchase a hammer to undergo a registration process similar to that for firearms. Supporters argue that because hammers, like guns, have metal parts and can be used to kill people that these tools should be legally controlled as guns are. These proponents are using a Weak Analogy to advance their position.

Weak analogies are used to support business decisions every day. As with all logic errors, decision-makers fall prey to the appearance of reasonableness, especially when the position supported justifies their desired course of action. Although difficult, recognizing and eliminating the use of Weak Analogies in decision-making is absolutely necessary.[wcm_restrict plans=”49457, 25542, 25653″]

Weak analogies occur when a decision-maker asserts greater similarity between two circumstances or entities than actually exists. In the hammer legislation example, supporters of the bill inappropriately correlate the similarities between hammers and firearms when arguing for greater hammer controls. Breaking down the hammer-firearm analogy reveals the correlation weakness:

  • A is like B: Hammers and firearms both have metal parts and can be used to kill people.
  • B has property P: Firearms are subject to rigorous legal controls and restrictions.
  • A has or should have property P because B does and A is like B: Hammers should be subject to the same legal controls and restrictions as guns.

The assertion that hammers and firearms are alike because they both have metal parts and can be used to kill people omits important differences between these two objects:

  • The fundamental purpose and use of a hammer is as a construction tool, cooking tool, or ceremonial tool whereas the fundamental purpose of a firearm is to cause or threaten to cause harm to people and animals or to damage physical objects.
  • Hammers are most frequently used for their primary purpose and result in far fewer deaths or harmful attacks on people and animals than do firearms.

These latter two characteristics are more material to the comparison of hammers and firearms in the context of legal controls. Considering the broader range of important hammer and gun characteristics reveals the Weak Analogy used by the hammer control advocates and invalidates their assertion.

Recognizing Weak Analogies

Logic errors are often difficult to recognize, Weak Analogies being no exception. Questions decision-makers should consider in order to avoid Weak Analogies include:

  • Was logic applied to support the desired decision option rather than independently identify the best option?
  • Has the decision’s logic been aggressively challenged, preferably by the team’s Devil’s Advocate or a disinterested third party?
  • When comparing circumstances or entities, were all characteristics of each identified and the material characteristics used to justify the correlation?
  • Were the characteristics of the compared circumstances or entities thoroughly assessed or the correlation naturally assumed?
  • Does the Devil’s Advocate or disinterested third party have the level of knowledge and experience necessary to assess analogies used in the decision-making process?

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[/wcm_nonmember]Additional Information

Additional insight to the warning signs, causes, and results of logic errors can be found in the StrategyDriven website feature: Decision-Making Warning Flag 1 – Logic Fallacies Introduction.

Decision-Making Warning Flag 1a – The Gambler’s Fallacy

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StrategyDriven Decision-Making Article | Decision-Making Warning Flag 1a - The Gambler's Fallacy“The Gambler’s Fallacy, also known as the Monte Carlo Fallacy, is the false belief that the probability of an event in a random sequence is dependent on preceding events, its probability increasing with each successive occasion on which it fails to occur.”

Gambler’s Fallacy
Wikipedia

Seated at a roulette table, a gambler must decide on what color to place his next bet, red or black. He knows there is a 50 percent chance of getting either red or black and that the first four spins of the wheel yielded all reds. The gambler reasons that because half of all spins should result in black and the first four were red, it is more likely the fifth spin of the roulette wheel will be black and places his bet. While his logic appears reasonable, the roulette player has just fallen victim to the Gambler’s Fallacy.[wcm_restrict plans=”25541, 25542, 25653″]

Circumstances like this one are not limited to gamblers; they plague executives and managers in the business world every day. Decision-makers are victimized by the Gambler’s Fallacy because, like all logic errors, it appears reasonable and typically justifies the desired course of action. Recognizing the Gambler’s Fallacy is therefore difficult but necessary.

The Gambler’s Fallacy logic error occurs when a decision-maker incorrectly believes the probability of an independent event is in some way influenced by preceding occurrences. In the roulette example, the player wrongly assumed the first four results would influence the outcome of the fifth spin. Prior to the five spins, the likelihood of spinning five consecutive reds is calculated as:

Underlying Facts:

  • Possible Outcomes: Red or Black
  • Outcome Distribution: Equal number of Red and Black opportunities
  • Probability of Spinning Red: 50 percent
  • Probability of Spinning Black: 50 percent

Calculations:

  • First Spin is Red: 50 percent
  • First and Second Spins are Red: (50 percent) x (50 percent) = 25 percent
  • First, Second, and Third Spins are Red: (50 percent) x (50 percent) x (50 percent) = 12.5 percent
  • First, Second, Third, and Fourth Spins are Red: (50 percent) x (50 percent) x (50 percent) x (50 percent) = 6.25 percent
  • First, Second, Third, Fourth, and Fifth Spins are Red: (50 percent) x (50 percent) x (50 percent) x (50 percent) x (50 percent) = 3.125 percent

Therefore, prior to the first spin of the roulette wheel the change of realizing a Red outcome five consecutive times is a mere 3.125 percent. However, because each spin is an independent event, not in any way influenced by the preceding outcomes, the chance of spinning Red on the fifth attempt having already spun four consecutive Reds is one in two or 50 percent. As long as the game is fair, it will always be 50 percent!

Recognizing the Gambler’s Fallacy

Logic errors are often difficult to recognize, the Gambler’s Fallacy being no exception. Questions decision-makers should consider in order to avoid the Gambler’s Fallacy include:

  • Was logic applied to support the desired decision option rather than independently identify the best option?
  • Has the decision’s logic been aggressively challenged, preferably by the team’s Devil’s Advocate or a disinterested third party?
  • Was an event’s outcome prediction influenced by preceding events, especially if the event occurs independently?
  • Was an event’s independence thoroughly assessed or naturally assumed?
  • Were the event’s independence and the probability of its outcome calculated by an individual or group having in-depth knowledge and experience of statistics?

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[/wcm_nonmember]Additional Information

Additional insight to the warning signs, causes, and results of logic errors can be found in the StrategyDriven website feature: Decision-Making Warning Flag 1 – Logic Fallacies Introduction.

Decision-Making Warning Flag 2 – The Silent Nod

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StrategyDriven Decision Making Article | Silent NodAll too often it is not clear to executives and managers that they are in a decision-making situation. In many of these instances, they find themselves attending a briefing during which the presenter makes a recommendation for which he or she is seeking approval. As the presentation goes on, the briefing attendees listen attentively and nod silently. No verbal decision is communicated but the nodding continues. At the end of the presentation, the presenter is songs adulated for making a thorough presentation and providing an insightful recommendation. There is applause. Exiting the meeting, the presenter remembers the affirmative statements and, most importantly the silent nods. These now become the unintended affirmative decision the presenter sought and the leaders failed to recognize they were making.[wcm_restrict plans=”49479, 25542, 25653″]

Two issues exist… First, it was unclear that a decision was being sought. Second, it was unclear that a decision was being made. The presenter faded to adequately communicate the desire to have a decision made. The leaders provided compliments and praise without stipulating that no action was to be taken until approved. Further, the presenter did not communicate an intention to act. Thus, the unintended decision was made and acted upon.

Silent nod decision-making is an all too common problem. As leaders, it is our responsibility to ensure our non-verbal communications do not convey an unintended message; one that can have undesired consequences. While not all inclusive, the four lists below, Process-Based Warning Flags, Process Execution Warning Flags – Behaviors, Potential, Observable Results, and Potential Causes, are designed to help organization leaders to recognize whether their accommodate silent nod decisions. Only after a problem is recognized and its causes identified can the needed action be taken to move the organization toward improved performance.

Process-Based Warning Flags

  • Decision-making processes do not require positive, authority driven decision affirmation or denial
  • Decision-making processes involving senior level authorization do not require sign-offs
  • Decision-making training programs do not coach those seeking option approval to gain positive acceptance

Process Execution Warning Flags – Behaviors

  • Decision-makers overly rely on body language to convey approval or disapproval for decisions
  • Decision-makers do not coach individuals relying on their body language to receive positive authorization
  • Leaders assume the role of passive listener; abdicating their decision-making authority to option presenters and subordinates

Potential, Observable Results

  • Subordinates initiate actions without approval or appropriate funding
  • Organizational resources are diverted to uncoordinated and unapproved initiatives causing a loss in effective productivity and organizational alignment
  • Initiatives implemented lack executive support causing worker confusion and frustration and leading to the project’s failure
  • Unauthorized action is taken that results in adverse safety conditions, financial loss, and regulatory violations

Potential Causes

  • Decision-makers deliberately avoid providing verbal or written decisions in order to avoid outcome responsibility
  • Leaders use the silent nod to avoid accountability for their decisions
  • Executives and managers inappropriately assume their subordinates understood their decision intentions via visual signals
  • Organizational leaders desire implementation of the requested action but know that doing so violates a policy, procedure, or requirement

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