Sat 14 Mar 2015 | By:

3 Proven Tips To Making Better Business Decisions

How To Make Better Business Decisions: 3 Simple Steps

The success of your newly formed business is directly influenced by the quality of your decisions. Because decision making is part of everyday life you would expect to be naturally good at it. However, in the case of decision making, practice does not always make perfect.

The most frequent type of decision is when someone is presented with the choice between two options. We can discover a lot by observing others and applying methods by which we can open our minds to the possibilities available to us.

 

Tip 1) Ask For Both/And

Have you ever observed the details of a toddler’s decision making process?

Granted, toddlers may not always have the best decision outcomes, but their decision making process is worth looking at. A child can be laser focused and immediately decisive with one set of choices. In another situation the same child can be completely stumped over the choice of two options.

Suppose a parent offers a toddler the choice of two tasty snacks. The child will mull it over and flip from one choice to another and then back again in a matter of seconds. It’s almost painful to watch a seemingly insignificant choice nearly incapacitate the youngster.

But then their little mind prompts them to ask one question that blows the whole thing out of the water: Can I have both; this AND that?

For the parent this question is almost too much to bear. They are shocked at the very notion that someone could ask for both. It’s more inconceivable to actually GIVE both.

Without thinking we say, “No.”

The parent needs to rationalize turning down the request:

The rules are pretty clear: you can have one, not both.

We have to save one for later.

I never had both when I was your age.

The child’s request is denied to satisfy the conscience. The parent feels as if they need to follow the unwritten rules. “After all,” goes the thinking, “when I was a kid I wanted more and I couldn’t have it. Why should that change now? The best way – no, the only way – is to have the same ‘opportunities’ that I had. Besides, showing restraint builds character.”

This self-justification by the parent creates boundaries for children. In most cases these boundaries are helpful and necessary. But as kids grow into adults these boundaries established by others in authority become a self-imposed norm in every situation. The long term impact is that we get into the habit of looking at only the options that are immediately available to us.

This does serve a practical purpose, too. By reducing the number of options to one or two considerations it saves time, energy and the thinking required to make a decision. However, the best outcomes are rarely achieved by choosing an option immediately available to us without proper planning.

The good news is there are steps to take that will open our eyes to more options than what appear on the surface.

 

Tip 2) Find More Options

Chip and Dan Heath address this habit of creating single-option choices in their book, Decisive. They explain how we put too much emphasis on the choices right in front of us. This causes us to completely ignore the possibility that there are additional options available. The Heath brothers call this the spotlight effect.

Just like a spotlight focuses an audience’s attention on one spot on a stage, our attention is only in tune with the option immediately in front of us.

Business leaders are not exempt from succumbing to the spotlight effect. They focus their attention on what is immediately in front of them. This includes industry average returns, past performance, and minimally acceptable growth. These limited options guide the choices that ultimately determine the direction of the organization.

Let’s take a look at a group of successful decisions makers and discover what separates them from most people.

 

Tip 3) Expect Exponential Impact

These folks are successful entrepreneurs and global thought leaders. They routinely consider options most people would never consider. For example, they make decisions expecting outcomes with exponential growth.

In an interview between Tim Ferriss and Peter Diamandis, Peter explains how he considers business ideas that have a return of 10 times. He’s not the only one to do this. He explains how folks like Jeff Bezos, Elon Musk, Richard Branson and others achieve exponential growth by considering options other leaders don’t even consider.

 

Taking Action) How To Get Better Outcomes

To widen the spotlight when faced with a decision between two options, take a step back and ask, “What options are available that I’m not considering.” Even if those options will never be chosen (for example, you CAN choose not to pay taxes year after year), it will open up your mind to realize you do have other choices.

Once the mind conceives that more than one option is available it will begin to creatively think of ways to get a more desirable result.

Here’s another consideration. You probably have plans right now for the next 3, 6 and 12 months. Why not widen your spotlight and ask, “How can I accomplish that 12 month goal in 6 months? What would I do if I had to meet that 6 month goal in 2 months?” Simply asking these questions will open your mind to the possibility of an improved outcome.

Are you currently in a situation that seems to have only two options? What happens when you remove those options from consideration? I’d love to hear about it and help you come up with a solution by joining the conversation on Twitter!

About Aaron Armour

Aaron has been managing teams for more than 15 years, some as large as 200 employees. He has managed business units with $36 million in revenue and projects with $50 million budgets. Aaron is passionate about helping managers lead people and thrill clients. Manager Launch Pad was created to help managers experience tremendous growth through practical tips, resources and mentorship. Read more about Aaron at ManagerLanunchPad.com and connect with him on Facebook and LinkedIn.