Making a Decision

There are thousands of resources and experts that provide guidance on the right way to make decisions for a business. Each expert has an opinion about the process that needs to be followed for effective decision making. What I find lacking in most of the reviews is the mention of the unique set of factors for each decision.

Are there time pressures? Financial pressures that shouldn't impact the business, but impact individuals making the decisions? Is the market moving and the business model changing? Does the CEO want more time with his or her family?

Business decisions are never easy, that is why the people who are responsible for the tough decisions get paid the big bucks, because their neck is the one on the chopping block. Hero or villain, there really isn't an option for an in between.

One of the greatest examples of making a tough decision is Advanta. They decided to get out of the small business credit card business. That is their business, not part of their business, but their core business. They recognized that there was a greater risk of sitting in the back seat and crossing their fingers than mitigating their losses, retaining some assets and starting over.

I remember what a trusted professional and friend once said when I asked about a business that was on a roller coaster. "Sometimes the best decision that you can make is to walk away". To give him credit, his name is Gil Beyda. His simple, yet powerful message was that you can't force things. You have to take the information in front of you and make the best decision possible. Walking away from a business, an ideology, a product, employee, geography... we have to make decisions every day that create a feeling of loss. It is very hard to walk away when so much time, energy, sweat and money has been committed. But what is a worse outcome? Cutting your losses or incurring more? More stress, more money, more time... more missed opportunities.

The key to sound decision making is finding the right balance between planning, timing and objectives.
What are your short term and long term goals?
What are the potential outcomes that are unacceptable?
What are the potential outcomes that are most desired?
What are the time, monetary, quality of life and missed opportunity costs associated with each option?
What is the best, worst and most likely outcome for each option?
With whom can you surround yourself to ensure a timely, well-informed decision?
Remember that good decisions are NEVER MADE ON AN ISLAND!!! Sorry to yell, but you don't know it all...none of us do. The truly wise gain wisdom from others with different experiences, insights and outlooks.

So,
1. Create a simple matrix in excel
2. Weigh the benefits and risks
3. Make the best decision possible
4. Track the progress
5. Measure the results
6. Prepare to adjust along the way