How you make decisions matters.
A good decision-making process gives you structure. Following a process reduces the chances of you making a bad decision.
So we are clear, a bad decision isn't a bad outcome. For clarity on what a bad decision is, read this article on bad decisions.
The way you decide should follow a method you are comfortable with and one you can use from memory. Most importantly, your decision-making process should empower the way you decide.
Your framework for deciding should allow you to gather information and assess different outcomes.
The following five-step process will give you the means to become an effective decision-maker.
A Five Step Decision-Making Process
Five steps form the foundation of a good decision-making process. Here they are: -
- Assess the information you have
- Name your Biases
- Gain a different Perspective
Each step offers a means of improving your outcome, and although we can’t eradicate the role of chance, we can take consider its impact.
But first, let's get into the decision-making process one step at a time.
If everyone stopped before deciding what to do, things would be vastly different. A pause, a holt, a break, call what you want, but just the act of stopping changes the dynamic of every decision. If you don’t stop, well, you just run into your intuition which may be okay. The chances are though, your intuition won’t have an earlier experience; it will think what has gone before was a good fit, but it won’t be.
Stopping has the power to prevent impulsiveness. It is the circuit breaker to poor decision-making. It also gives you the space to begin to think…
2. Assess the information you have
So, you have paused deciding what to do next. Now you’re in the right place, you start to assess the information you have about the decision in front of you. Questions prompt you to challenge what you know and most importantly, to find out what you know to be true.
Blinded by the bright lights of information, we often find ourselves dazzled, unable to see the reality of the choice we face. Although it is difficult for us to be objective, it's crucial to assess the situation by proving the facts to ourselves. We must exclude opinions and emotions to exclusively consider the truth of the decision we are about to make.
3. Name your Biases
Aside from the facts, cognitive biases feed us an alternative view of the decision we face. Confirmation bias limits our acceptance of the truth. We will seek one piece of confirming information to support our choice, conveniently ignoring all the other evidence to the contrary.
We are all gamblers; biased in favour of potential gains and too accepting of the losses. Such is the impact of loss aversion, another proven cognitive bias. There are many, many others. Too many to mention, but each of them has the potential to steer us away from the correct choice.
By naming your biases, you become aware of them.
Having awareness is a window into the limits of our objectivity. It creates some ability to limit what you see through the dimension breaking lenses of our biases. A lack of awareness is horrifying to the outsider who knows better. Therefore, it is imperative you name your biases. Then you have a chance of defeating them.
4. Gain a different Perspective
Your decision is still fraught with incorrect influences. Information from sources we trust can turn out to be incorrect, but trust blinds us to the error. We can’t see it. The sequence of fact-checking risks exposure to our biases and further compounds a faulty view of the choice ahead and the outcome on offer.
An unfamiliar perspective can change everything. One of the greatest blindsides of a decision is in the moment. Feelings – both ours and others – provoke an emotional response to the choice ahead.
Our only thought is about how we feel now.
An alternative perspective, whether yours or someone else’s gives you the insights not previously considered. Asking yourself how you might feel about the decision in ten minutes, ten days or ten months can change a lot. Removing emotion, which time does changes beliefs.
Asking someone else is another way of shifting the viewpoint. A friend, mentor, or coach can give insights not visible to us when we’re caught up in the heat of the moment.
Decisions matter. Deciding what to do is the end of the decision-making process I’ve mapped out here. Having made the effort to stop and assess the information you have, to name your biases so you can limit their impact, and seeking a different perspective you can now make the choice.
Deciding what to do isn’t about saying yes, it’s also having the means to say no. Arming yourself with knowledge offers progress. It empowers you to decide.
Decision-Making Process – a means to behave logically
As an ending, I’m going to offer a warning. It’s a warning of the perils of not using the five steps, of opting to go with one, or two, or even four of the steps to this process.
Typically, we face a multitude of decisions every day. Take the act of crossing a road, a behaviour so simple we don’t stop to even think about it. Our intuition normally takes control, ignoring the known dangers.
Sometimes, we dart across the road impulsively. Chance doesn’t favour us, as the red lorry struggles to stop in the rain, you’ve misjudged the lorry’s speed as it hits you, sending flying to the floor.
But what if we paused; what if we assessed the information to hand? What would we learn? We would see cars, buses, and occasional lorry going about their day. We might also assess the weather, becoming aware of the wet road surface as rain makes the tarmac slippery.
Getting to the second step of the decision-making process alerts to factors ignored in our dash to get to the other side. As we consider naming our biases, loss aversion appears. We forget about the downside of being run over, instead favouring the muffin and the caramel latte calling you from the café across the road. Confirmation bias alerts us to the speed of the car passing in front of us but ignores the red lorry that can’t stop as quickly on the wet surface.
At the third stage, you might still run for it. But what about an alternative perspective? “Should we go now?” You ask your partner. Her view suggests the pedestrian crossing a short walk away.
Your decision made at the end of the decision-making process is not to cross the road. Instead, you decide to use the pedestrian crossing and remove the risks found when you assessed the information but also factored in your biases and an unfamiliar perspective.
A simple story, but one which proves the power of using the decision-making process in everyday life can change your outcomes.
It is exactly what a good decision-making process should offer.