It’s inconvenient, but the quality of a decision can’t be judged from its outcome.
Good decisions can go wrong. You can get lucky with a bad decision. It happens all the time.
The quality of a decision comes from HOW the decision was made. And the performance of a decision-maker can only be judged by looking at their process and ‘portfolio’ of decisions over time.
To consistently make good decisions, you must have a good decision-making process.
Here’s our 6-step process with some recommended tools to get you started.
Step 1: Understand the context
Identify the factors which are relevant to your decision.
Gather any missing information that will be needed to make a good decision.
Recommended tool: The Munger Two Step
Step 2: Get clear on the purpose
Make sure you are clear on the problem that you are trying to solve, and the outcome you’re trying to achieve.
Recommended tool: Five Whys
Step 3: Work out who needs to be involved
Getting more people involved can reduce bias and increase buy-in from people affected by the decision.
But the more people, the longer it takes to make a decision.
Recommended tool: RACI/DACI Framework
Step 4: Identify your options
Identify the alternatives that could solve the problem.
Consider a broad range of alternatives, including those outside of your comfort zone.
Recommended tool: Inversion
Step 5: Decide
Now it comes to actually making the decision between your options.
For each, consider the likelihood of success and balance this against the costs involved and potential side-effects.
Then decide.
Recommended tool: Impact-Effort Matrix
Step 6: Review
After making a decision, document it and schedule a review for one month’s time.
When reviewing: identify the outcome, what you have learned, and whether any course-correction is needed.
Schedule follow up reviews if necessary.
Recommended tool: Decision Journal
