Cofounder and Chief Operations Officer at SetSchedule. Resident tech guru.
The decision-making process is a delicate balance of information gathering, evaluation and analysis. The goal is to make decisions based on your leadership style and experience. But what could limit someone from making the right decision?
One common block is the “sunk cost fallacy,” an economic principle that refers to the idea that people have a hard time letting go when they’ve invested time or money into something—even if it’s not working out. For example, say you’re working on a project that’s going badly. Instead of stopping and rethinking your approach, you might keep going because reconfiguring would feel like a “waste” of all that time, money and effort, even though continuing forward will only waste more time, money and effort.
There’s also confirmation bias, where people tend to seek out information that confirms their beliefs instead of looking for evidence that would challenge them. These types of decision-blockers can take a company’s leadership way off track.
Thankfully, it’s possible to overcome barriers like these. Here are a few steps based on my experiences that can help you move forward more easily.
1. Own your decisions.
Let me clarify: A decision is not a choice. If you make a decision, you end a process. You make a choice, and a new one begins. Leadership is all about owning your decisions so your employees can trust you. If your employees don’t believe that you know what you’re doing, they’ll be less likely to follow your lead and take on the initiative of making decisions themselves.
Owning your decisions also allows you to learn from them. If you’re not taking responsibility for your decision-making process, then how are you going to learn from it and avoid repeating mistakes?
2. Invest in decision making that is free of emotion.
Emotion is a powerful force that can influence our decision making. We’ve all been in the position of being so angry that we decide on something we later regret or so excited about a new idea that we overlook its flaws.
The key is to keep your emotions out of the equation and instead focus on gathering information that will help you make the best possible choice. Here are some tips for doing just that.
• First, take time to think through what you’ve learned from your past decisions. What would you do differently next time? What did you learn about yourself as a person? How might it apply in other areas of your life?
• Next, consider what factors are outside of your control—like whether your co-workers will approve or disapprove of your decision. Then try to evaluate how those factors will affect whether or not this decision has a positive outcome for everyone involved.
• Finally, think about how much time and effort went into making this decision. Was it worth it? Would it be better to put some effort into something else instead?
3. Understand and compare the options.
In order to make an informed decision, it’s important to know all the pros and cons of each choice. The more you understand how each of the options will likely impact your business, the easier it will be for you to determine which one has the best possible outcome. This is especially helpful when looking at products from different sources that may offer similar or different features or benefits at different price points.
4. Evaluate the opportunity cost.
In economics, the opportunity cost is the loss of other options when you choose a particular course of action. This means giving up something for the sake of achieving something else, so evaluating the opportunity cost of your choice means considering what might have been. For example, if you bought a new car instead of paying for your kid’s college education, then the opportunity cost is the amount you could have saved for his college education.
Opportunity costs are important because they tell us exactly how much worth something is as compared with all other possibilities available at the time. The concept can be applied to any decision: buying a stock, choosing to work or play, deciding where to live and so on.
Sometimes when it feels wrong, you’ve probably done the right thing.
It might sound counterintuitive, but it’s true. Oftentimes, when you make a hard but right choice, you have to push through some discomfort. In fact, if it wasn’t uncomfortable, then maybe you didn’t go far enough.
On the other hand, there are some things we do that make us feel good but aren’t necessarily the right thing to do. If we’re always looking for shortcuts, then we’ll never get anywhere—and that’s no way to achieve something remarkable!
There is no way to overstate this: Take responsibility for your actions and decisions, and be decisive. Even if it’s difficult to do so, let yourself be in charge rather than letting things happen by default. Become the catalyst that drives your ambition yourself instead of being driven by the emotions of the moment.