“Good decisions come from experience, and experience comes from bad decisions.” - Author Unknown
A decision is a final product of a specific mental/cognitive process by an individual or group, which is called decision making.
Decision making is the process of sufficiently reducing uncertainty and doubt about alternatives to allow a reasonable choice to be made from among them. We all make countless decisions each day, from deciding what to eat or wear to figuring out how to spend our free time or disposable income. Many of these decisions require little effort or thought, but at times we face circumstances that require more consideration.
Studies have shown that most people are much poorer at decision making than they think. An understanding of what decision making involves, together with a few effective techniques, will help produce better decisions.
Napoleon Hill – in his famous book, “Think and Grow Rich” – stated that 98% of people are in the jobs they have through indecision (i.e. because they never made the decision about what they wanted to become in their lives). Indecision explains why many people feel that they have a life purpose, but have no idea what that is.
“Decision making may take place by default; that is, without consciously recognizing that an opportunity for decision-making exists. This fact leads us to an important first element in a definition of decision-making. To have a decision-making situation, there must be at least two alternatives available. If only one course of action is available, there can be no decision-making, for there is nothing to decide. We would have no alternative but to proceed with the single available course of action. (One might agree, however, that it is a rather unusual situation when there are no alternatives course of action. More frequently, alternatives simply are not recognized).”
The starting point in any conscious attempt at rational decision making must be the recognition of the existence of a problem. Only when a problem is recognized can the work toward its solution begin in a logical manner. In typical situations, recognition is obvious and immediate. An auto accident, an overdrawn check, a burned out motor, an exhausted supply of parts or whatever, produces the recognition of the problem. Once we are aware of the problem, we can take action to solve it as best we can.
Types of Decision
There are several basic kinds of decisions.
1. Decisions whether. This is the yes/no, either/or decision that must be made before we proceed with the selection of an alternative. Should I travel this summer? Should I buy a new house? Decisions whether are made by weighing reasons pro and con.
2. Decisions which. These decisions involve a choice of one or more alternatives from among a set of possibilities, the choice being based on how well each alternative measures up to a set of predefined criteria.
3. Contingent decisions. These are decisions that have been made but put on hold until some condition is met.
A critical factor that decision theorists sometimes neglect to emphasize is that in spite of the way the process is presented on paper, decision making is a nonlinear, recursive process. Most decisions are made by moving back and forth between the characteristics we want our choice to meet and the possibilities we can choose from among. The alternatives available influence the criteria we apply to them, and similarly the criteria we establish influence the alternatives we will consider.
Components of Decision Making
1. Decision Environment
Every decision is made within an environment, which is defined as the collection of information, alternatives, values, and preferences available at the time of the decision. An ideal decision environment would include all possible information, all of it accurate, and every possible alternative. However, both information and alternatives are constrained because time and effort to gain information or identify alternatives are limited. The time constraint means that a decision must be made within a certain period of time. The effort constraint reflects the limits of manpower, money, and priorities.
2. Information Quantity
Many people have a tendency to seek more information than required to make a good decision. When too much information is sought and obtained, one or more of several problems can arise.
1) A delay in the decision occurs because of the time required to obtain and process the extra information. This delay could impair the effectiveness of the decision or solution.
2) Information overload will occur. In this state, so much information is available that decision – making ability actually declines because the information in its entirety can no longer be managed or assessed appropriately. A major problem caused by information overload is forgetfulness. When too much information is taken into memory, especially in a short period of time, some of the information (often that received early on) will be pushed out.
3. Decision Streams
A common misconception about decision making is that decisions are made in isolation from each other: you gather information, explore alternatives, and make a choice, without regard to anything that has gone before. The fact is, decisions are made in a context of other decisions. The typical metaphor used to explain this is that of a stream. There is a stream of decisions surrounding a given decision, many decisions made earlier have led up to this decision and made it both possible and limited. Many other decisions will follow from it.
But HOW to make wise decisions?
How to make the best decisions? The answer to that question is simple 5 step process. My philosophy is that the simplest theories and solutions are always the best – and work.
The 5 steps of efficient decision making
When you have a – serious – decision to make, grab a pen and a piece of paper. You will have to do a little writing.
Step 1. State what needs to be decided. Define it very clearly. Does it warrant action? If so, now? Is the matter urgent, important or both. See the Pareto Principle (80/20 rule).
Step 2. Think of all the ways the problem could be solved. Brainstorm and look for additional information about your problem on the Internet, ask your family and your friends. Through the process of collecting information you will identify many possible paths of action.
Step 3. Take each alternative and list all the things that could happen – good and bad – if that alternative is chosen and acted on. Assign a numeric rating to each good or bad thing that might happen (0-10).
Step 4. Examine the pros and cons of each alternative and look at the sum of their – good and bad – ratings. Consider your personal values and priorities and cross out the alternatives that come in contradiction with them. Also, cross out the alternatives that make you feel uncomfortable. This should have narrowed down your choices.
Step 5. DECIDE on the best alternative from the remaining available ones, write it down separately and act on it. Keep in mind that it should solve your problem, be satisfying and not create other problems.
(optional) Step 6. Review the results. Are you happy with them? What worked, what didn’t work? Remember that for the future in order to be able use the Pareto Principle more effectively.
Things to remember
1. Decisions are tentative; you can change your mind.
2. There is probably no one right choice; and few decisions are totally wrong.
3. Deciding is a process, not a static, one-time event. We are constantly re-evaluating in light of new information.
4. When it comes to a career decision, remember you are not choosing for a lifetime; in all probability, you will have several careers during your working life. Choose for now and don’t worry whether you’ll still enjoy it 20 years from now.
5. There’s a big difference between decision and outcome. You can make a good decision based on the information at hand and still have a bad outcome. The decision is within your control, but the outcome is not. All decisions have that element of chance, risk.
6. Think of the worst outcome. Could you live with that? If you could live with the worst, then anything else does not seem that bad.
7. Indecision is a decision not to decide. There are probably risks involved in not deciding, in not taking action.
8. Try to avoid either/or thinking; usually there are more than two options. Be imaginative and creative.
9. You may want to consult others for information but eventually you must make up your own mind. Sometimes it may be a good idea to consult more than one source so that your information is not biased.
10. Listen to your inner self. What feels right – without thinking?
11. Only the risk takers are truly free. All decisions of consequence involve risk. Without taking risks, you cannot grow or improve or even live.
12. There is really no such thing as permanent security in anything on earth. Not taking risks is really not more secure than taking them, for your present state can always be changed without action on your part. If you don’t take the risk of dying by driving to the store, your house could collapse on you and kill you anyway.
13. You are supposed to be afraid when you risk. Admit your fears–of loss, of rejection, of failure.
14. Risking normally involves a degree of separation anxiety–the anxiety you feel whenever you are removed from something that makes you feel secure. Many children feel this when they first leave their parents for school. Some college students feel this when they go off to college. Travelers sometimes feel it when they get homesick. The way to overcome separation anxiety is to build a bridge between the familiar and secure and the new. Find out what the new place – school or country – is like and how its elements compare to familiar and secure things at home. Take familiar things with you – books, teddy bear, popcorn popper, whatever.
Common Issues
- Identifying the wrong problem. Sometimes what really needs to decided is very obvious, but other times the issue is harder to spot. For example, let’s say your friend blew off a study session with you to hang out with other friends. Is the problem that you are hurt by your friend’s actions or that you are worried about his study habits? Figuring out the focus of your decision can save you from big headaches later on.
- Listening to only one source. This will hurt your chances of coming up with a broad choice of alternatives and coming up with the best solution. Overestimating how helpful or reliable one person can be is also dangerous, because nobody can completely understand the particular dynamics of your situation.
- Listening to too many sources. It is important to collect as much information as possible to help you make your decision, but an overload of input may prevent you from following your gut instinct. Trusting your intuition is a key component of successful decision-making.
- Overshooting on the outcome. When considering your options, take care to also assess how probable the outcomes of each option truly are. A decision that looks attractive but is totally unfeasible will not help you solve the problem.
- Bad timing. Sometimes it’s best to hold off on making a decision, but other times delaying a response can makes things a lot worse. Taking your time will probably result in a higher-quality decision, but expediting the process could also give you more time to fix things in the event of an undesirable outcome. Since each choice is often case-specific, consider how the pros and cons of timing will affect your decision and the ensuing outcome.
References:
DOW JONES & COMPANY
University of Missouri Career Specialist Selection & Training Manual – Robert McDaniels (editor), 1995.
Samarkand Manor Youth Development Center
Harris, Robert: “Introduction to Decision Making”. VirtualSalt. July 2, 1998
