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Eight steps to making better decisions as a manager

Before your last business decision, how many people were involved in the team that chose the path forward? Did they write down beforehand the critical corporate priorities that would be affected? Did they take time to consider four or more alternatives, or just plunge in? Did you record the decision, indicate publicly who had doubts, and follow up two months later to see whether you had chosen the best course?

Those are some of the best practices for decision-making that Erik Larson has drawn from behavioural economics, as he has developed Cloverpop, a cloud-based aide for individual and corporate decision-making. At his own company, they rarely have to meet for decisions because they quickly use that technological checklist to canvass key stakeholders for input, arriving at a solution quicker and with more buy-in. Here are the eight crucial steps that you can apply today in your own organization:

Write down the key facts that need to be considered. Too often we jump into decisions and ignore the obvious. Writing things down – at this and other stages – is critical as it improves clarity for you and others.

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Write down five pre-existing goals or priorities that will be affected by the decision. Often in personal or business decisions we leap in, decide, and then create reasons – rationalizations, really – for what we're doing. When his company went through this step before hiring a vice-president of sales, they realized – on three separate occasions – it was unnecessary. "That saved a lot of money," he said.

Write down realistic alternatives – at least three, but ideally four or more. "It might take a little effort and creativity, but no other practice improves decisions more than expanding your choices," he writes in Harvard Business Review. A second choice reduces chances of a bad decision by 50 per cent, he said in the interview. For a vice-president of sales, his company considered: Hiring one; hiring an all-round "business athlete" adept at many functions; carrying on as is for a few more months; and using piecemeal consulting to fill the gaps. He initially felt that hiring was the right move, than gravitated toward a more all-round person until applying some of the checklist logic to that, and finally decided to hold off.

Write down what's missing. Information used to be scarce. Now it's so abundant it can distract us from checking what's missing. "If there is something you need to know and can find out, you should do so," he said. It's best to ask team members separately to provide this information, since they will be looking at the situation differently and offer valuable insights.

Write down the impact your decision will have one year in the future. By thinking a year out, you are separating yourself from the immediate moment, lessening emotions. Establishing a scenario on how this will play out also helps to develop other scenarios.

Involve at least two more people in the decision but no more than six additional team members. This ensures less bias, more perspectives, and since more people contributed to the decision, increased buy-in when implementing it. But after seven people on the decision-making team, you'll get diminishing returns. The number of perspectives won't increase and individuals will start to form subgroups of the like-minded, reducing overall team cohesion.

Write down what was decided, as well as why and how much the team supports the decision. This helps when you take the ideas to the broader organization – you won't be vague as to what is happening and the reasons. Indicating who was consulted helps build buy-in as employees are more likely to see somebody involved whom they trust. Although admitting dissent is highly unusual, he argues "if you indicate Joe didn't like it as much as everyone else but is supporting it, that makes it fairer to others. And Joe can't do something political now [to derail it] as he will be called out." And if the decision goes wrong, you can look back at what was decided and why, increasing understanding.

Schedule a follow-up in one to two months. This rarely happens but is helpful as it allows chances for a course correction and also grants dissenters like Joe more confidence that there will be a second opportunity for reflection.

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He says behavioural economics indicates our brains are set up to lead us to a less-than-ideal solution. But by taking these steps, you can increase your odds of success.

Web tail: Harvey Schachter is a Kingston, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online column, Power Points. E-mail Harvey Schachter

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About the Author
Management columnist

Harvey Schachter is a Kingston, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online column, Power Points. More

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