Do you feel like the entrepreneurial decision making process is complex? Here’s a breakdown.
As an entrepreneur it’s essential you have a working entrepreneurial decision making process.
To avoid making several fatal mistakes.
As much as you want to learn from your mistakes; it’s better to save time and money by not making too many.
Others have made enough to learn from.
Consequently you can’t operate at full capacity as a business unless you consistently make good decisions at the right time.
And also implement them effectively.
In addition remember that your customers make decisions as well.
A decision is a determination arrived at after consideration of some options. That’s according to the Merriam-Webster dictionary.
Hence in simple words a decision is what you choose to do out of several or few options.
For example you need to choose from several options a location for your business. You pick the one that contributes positively to your business growth.
The decisions we make take us from point A to point B. It’s what takes us from the before to the after. To a positive outcome. And what separates success from failure.
You are where you are in life because of decisions you took over the years.
Therefore as an entrepreneur you would need to take calculated risks via your decisions.
Most noteworthy is your entrepreneurial journey entails 4 decision types which we have covered.
Remember don’t take risks without doing a proper situation analysis using the SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats)
The entrepreneurial decision making process is one of the most important processes you will undergo as an individual and for your business.
Hence it’s quite necessary as an individual since it’s mostly your responsibility to make decisions about everything affecting your business.
Though the effect of these decisions vary on the business; you still need to make sure you take the best decision(s) at every stage.
“The intellectual equipment needed for the job of the future is an ability to define problems, quickly assimilate relevant data, conceptualize and reorganize the information, make deductive and inductive leaps with it, ask hard questions about it, discuss findings with colleagues, work collaboratively to find solutions and then convince others.” – Robert B. Reich
Identifying the four components that are instrumental to the entrepreneurial decision making process is key.
This can also be referred to as the problem at hand. What needs to be decided upon.
What do you hope to achieve with your decision? Ensure you apply logic.
Consider as many options as possible but ensure you don’t overdo it to avoid confusion. Make sure you have as much data as needed.
This involves considering your business values. The decision that matches your business values best wins.
Being an entrepreneur will cause you to wear different hats.
Hats like Tech needs to reach a conclusion on a major update or Finance on resources allocation.
Therefore you need to ensure you make the best choice(s) for every hat you wear.
And the best decision emanates from an entrepreneur decision making process that works perfectly.
Here are the steps:
Step 1: Recognize the problem
Whenever a decision needs to be taken it means there’s a “problem” (an issue at hand).
Ask questions like what’s the problem and what’s the best way to solve it without creating more problems?
Furthermore identify where you are and where you ought to be.
What’s the goal (purpose) of the decision in your business?
While considering if there’s a timeframe to it. You don’t want to be too late.
Also don’t just ask your staff ask your clients too. They have tons of info for you.
Step 2: Analyze the problem
Once you identify the problem(s) the next step in the entrepreneurial decision making process is to gather appropriate information on the problem.
As much as you can.
Likewise get information from within your business, published studies, online data from credible sources and materials from experts.
Also not forgetting everyone with stakes in your business.
Sometimes you have to deliberate on more than one issue at a time.
Notwithstanding don’t be overwhelmed just arrange your priorities right.
Step 3: Define And Analyze Plausible solutions
Your accurate analysis of the problem will help when brainstorming on every possible solution.
This step also involves you, your staff, every stakeholder in the business and experts.
Thoroughly consider everyone’s suggestion before discarding it.
And choose options that provide a long term fix to the problem.
Step 4: Select the best solution.
Select and evaluate the best decision.
What are the consequences of your chosen solution?
Would it solve the problem without generating additional problems? While being cost and time effective.
Does it align with the mission, vision and values of the business?
What does your gut also tell you about this decision? Trust your gut.
Also this step involves you choosing the best option based on the information available.
You should appoint an administrator at this point. So they are in charge when you aren’t there.
Finally for this step you need to spell out the Who, What, When and How of the chosen decision to all the players involved.
Step 5: Execute Your decision
The next step is to put your decision to work.
Because making a decision without implementing is hogwash.
What if you carry out a decision and it doesn’t work as planned?
Then you go back to Step 3 armed with the lessons you learnt to pick the next best decision on your list.
On to steps 4 and 5. Or to step 1 if there’s a change in data and conditions. More like a rinse and repeat.
This step also includes follow up and feedback.
In summary having an entrepreneur decision making process will ease things up in your organisation.
Subsequently when your staff know they don’t have to fight while making decisions they will relax.
I once worked at a firm where the Lease, Recovery and Internal Audit Units were always at loggerheads due to too much bureaucracy.
I could literally feel the tension in the air and it was bad energy.
Therefore identify the critical positions of your company and fill them up with people who are capable of making the best decisions. Without prejudice, at the nick of time and without wasting resources.
Are you using a different set of steps to make your entrepreneurial decisions? Please share in the comments.