17 Proven Decision-Making Practices Every Leader Should Learn

Decision-making is an important part of leadership, but many of us are never taught practices that we can use to make great decisions.

Because of that, at work and in life, even though you may make decisions with great intentions, they may end up turning out poorly.

Have you ever made what you thought was a “good” decision, but it turned out poorly? Or been stuck, unsure how to make a certain decision?

You’re not alone. Many leaders learn decision-making through trial and error – and those errors can be costly.

In this article, we’ll cover 17 key decision-making practices that will help you make better decisions that get better results.

Decision Mindset Practices

Before we dive into specific techniques, let’s look at how you may think about decisions, because your mindset shapes everything else.

1. Think in Probabilities, Not Certainties

Many leaders think decisions are like chess – if you make the right move, you’ll win. But the truth is, decisions are more like poker.

In poker, you don’t know what cards other players hold or what’s coming next. Even with a great hand, you might lose. With a poor hand, you might win. It’s all probability.

Business (and life) decisions work the same way:

• You don’t have all the information
• Outside factors can change suddenly
• Even good decisions sometimes have bad outcomes

More than that, we often think of things as yes or no, it will or it won’t. Instead, we should think in probabilities.

Don Moore in Perfectly Confident gives an example of a leader asking someone how much of their product they think will sell next quarter (or year). They were looking at a specific number, such as 100,000.

The problem is, that number will be wrong. It will be higher or lower (very rarely will it hit that exact number). Instead, It’s better to think in probabilities and even ranges.

“Based on past data, there’s a 20% chance we will be between 80,000-90,000, 40% chance 90,000-100,000…” etc.

Do you see how that can help you make better decisions and plan better?

Thinking in probabilities helps you:

• Be more realistic about possible outcomes
• Prepare for different scenarios
• Make better bets with your time and resources

2. View Decisions as Learning Opportunities

Too many leaders tie their self-worth to their decisions. They think being wrong means they’re bad at their job.

This mindset is toxic. It makes you defensive when challenged and reluctant to admit mistakes.

Instead, see each decision as a chance to learn:

• When you’re wrong, you gain valuable information
• When you’re right, you also gain valuable information
• Either way, you grow as a leader

When a decision doesn’t work out (or even if it does), ask: “What can I learn from this?” This approach connects naturally to our next practice about judging the process rather than just the outcome.

3. Judge Decisions by Process, Not Just Outcomes

A common mistake people make with decision-making is judging decisions solely by their results.

This is a problem because, as mentioned earlier, decisions involve probability. You can make a good decision and it can turn out poorly, and you can make a bad decision and it can turn out well.

For example in poker, AA is the best hand – but you can still lose with it. 2/7 off-suit is the worst hand – but you can still sometimes be lucky and win with it.

If you make future decisions based solely on the outcome, you may start making worse decisions. If you lost with AAs, you might think that’s a bad strategy and stop playing those. Or if you happened to win with 2/7, you might always play it and then lose a lot more.

Just because your Uncle Ernie happened to get lucky in a risky investment doesn’t mean you should throw all your money into it.

Instead, judge decisions by the process used and the information available at the time.

Judging by outcomes only will also hurt your employee productivity – if they know their decisions that “fail” will be punished and seen as bad, they’ll play it safe and only focus on things they’re sure will “succeed,” which can hold your business and team back.

Focus on the process and information used at the time instead.

4. Take Time to Make Good Decisions First

Sometimes leaders rush decisions in the name of being “decisive” or because of time pressures. They may say there is no time to prepare more for the decision, but strangely, there is often enough time later to fix it when it goes wrong.

This reflects a misunderstanding of what “being decisive” means. It’s not about the speed of the decision, but confidently making the decision when the time comes to decide. You don’t hesitate or waffle back and forth – when it’s time to decide, you decide and move forward.

One way to know when to decide is to ask “What is the cost of not deciding?” If the cost is too high, then it may be time to go ahead and make the best decision with the information you have at hand.

Otherwise, it may be wise to take time to gather more information (though this also depends on the size of the decision – if you’re ordering lunch, don’t overanalyze it – just decide and move forward).

Information Principles

Now that we’ve covered some mindset practices, let’s look at how you gather and process information for decisions. These practices can help you avoid blind spots and see the full picture.

5. Challenge Your Thinking

Most of us naturally look for information that supports what we already believe. It’s called “confirmation bias.” We accept information that agrees with us and disregard information that doesn’t.

It’s like wearing blinders – only seeing what you want to see.

But if we want to make better decisions (and just be better learners in life), we need to flip our approach:

• Instead of asking “Why am I right?” ask “Why might I be wrong?”
• Look for evidence that goes against your initial thinking
• Test your assumptions by trying to disprove them

This will likely feel uncomfortable at first. Our brains don’t like having our ideas challenged. But this discomfort is where growth happens and where the best decisions are made.

Try this: The next time you’re leaning toward a particular decision, take 5 minutes to write down three reasons it might be the wrong choice. This simple exercise opens your mind to possibilities you might miss otherwise.

6. Seek Out Disagreement

Have you ever been in a meeting where everyone quickly agrees with the boss’s idea? Or maybe everyone agreed with you? That’s not a good sign, it’s a bad one.

Good decisions emerge from healthy debate. When no one disagrees, it’s likely not that everyone actually agrees with you – they just fear disagreeing with you (and instead will disagree outside the meeting).

As a leader:

• Directly ask for contrary opinions: “What am I missing here?”
• Thank people who speak up with different viewpoints
• Get everyone to speak up, even the quietest person in the room – they often have valuable thoughts
• Make it safe for people to speak up and disagree

One effective approach is to assign someone the role of “devil’s advocate” in important discussions. Their job is to point out flaws and concerns, giving everyone permission to think critically.

Another is to get people to write down concerns before starting the discussion, which connects well with our next practice about recognizing bias.

7. Recognize and Counter Your Biases

We all have mental shortcuts (biases) that can trip us up when making decisions. Here are some common ones:

Status quo bias: Sticking with what you have because change feels risky. Counter it by asking: “If we weren’t already doing things this way, would we choose to start now?”

Sunk cost fallacy: Continuing a failing project because you’ve already invested resources. We feel like we will “lose” all that time and resources if we stop now. But the truth is, it’s already lost. The question is “Are you going to lose more?” Counter it with zero-based thinking: “If I was starting over today, no investment, knowing what I know now, would I start this project today?”

Anchoring bias: Giving too much weight to the first piece of information you receive. For example, if someone suggests $50,000 for a project budget, you’ll tend to stay near that number even if it’s unreasonable. Counter it by forming your own estimate before hearing others’ suggestions, and by deliberately considering a wide range of possibilities rather than adjusting from the first number you hear.

Overconfidence: Believing you know more than you do. Counter it by asking yourself: “How might I be wrong?” This question forces you to consider specific scenarios rather than simply defending your position.

The first step in overcoming these biases is simply being aware of them. When you catch yourself thinking “We’ve always done it this way” or “We’ve already spent so much on this,” pause and reconsider.

8. Consider Both Inside and Outside Views

When making decisions, you have two perspectives available:

The inside view is your specific situation, with all its unique details and circumstances.

The outside view looks at the base rates or statistics: What typically happens in similar situations?

Most leaders rely too heavily on the inside view, believing their situation is special. They ignore statistics that might tell them otherwise.

For example:

• The inside view says: “Our project is different because we have an exceptional team.”
• The outside view says: “85% of similar projects run over budget, regardless of the team.”

It’s easy to be overly optimistic about how well we will do. Entrepreneurs are a great example of this. A large percentage of new businesses fail, but entrepreneurs often think they are the exception to the rule.

It’s wise to look at the outside view, the base rates, to get a clear picture of what typically happens. You can then look at what those who beat the base rate do differently and compare yourself and your situation to the different categories.

Next time you make a significant decision, ask: “What typically happens when others make this kind of choice?” Then adjust your expectations accordingly.

Structural Principles

With the right mindset and information gathering approaches in place, let’s look at how to structure your decision-making process. These practices help you organize your thinking and avoid common pitfalls.

9. Define the Real Problem Before Seeking Solutions

Have you ever spent time solving what you thought was the problem, only to discover you were addressing the wrong issue entirely?

One of the biggest mistakes leaders make when problem solving is jumping to solutions before clearly defining the problem. It’s like trying to navigate a ship or plane without knowing where you are going.

It’s also easy to assume that we know what’s causing the issue, but we’re often wrong. Our brains quickly connect dots and create stories that seem logical but in the end miss the real root cause.

For example, a piece of machinery breaks, so you quickly start replacing parts or making adjustments without looking to see what really is causing the issues, which might just be a loose screw.

Or if your team keeps missing deadlines, you may think people just need to work faster, but the real issues might be unclear expectations, interruptions, or bottlenecks in your process.

To define the problem properly:

• Ask “What’s really going on here?” instead of “How do we fix this?”
• Use the “Five Whys” technique – keep asking why until you reach the root cause
• Dig deep to find the root cause

Taking time to define the problem might feel slow, but it can save tremendous amounts of time and resources by making sure you are solving the right thing.

10. Establish Clear Criteria Before Evaluating Options

“I’ll know the right choice when I see it” is often a recipe for poor decisions. Without clear criteria, you’ll likely:

• Give too much weight to the most obvious factors
• Be swayed by what’s presented most convincingly
• Change what you’re looking for based on what’s available
• See something nice about something you like, and start weighing everything good about it highly, downplaying its negatives, while downplaying the good of other things and emphasizing their negatives

Before exploring solutions, decide what a good solution needs to include. For example, if I want a good graphic design software, I can quickly start jumping around looking at software before I even think about what it is I need. Then I might “choose” something and have the issues mentioned above because I didn’t take the time to think about what I need from a graphic software first.

When setting criteria, ask:

• What does the solution need to have?
• What are the non-negotiables? (must-haves)
• What would be nice but isn’t essential? (nice-to-haves)
• What constraints do we need to work within? (budget, time, resources)

For instance, when hiring, define what are the absolute requirements versus bonuses before reviewing résumés. If looking for a house or car, write down everything that you want, then identify the key requirements that it must have.

You may want a big yard for your kids, but without setting the criteria well, the first house may have a nice kitchen, so you start weighing that higher even though it’s not really that important, it just seems nice at the moment.

Make sure you have your criteria written down and refer to it throughout the decision process. This simple act keeps you focused on what truly matters.

11. Expand Beyond Binary Choices

Too often, we frame decisions as either/or questions:

• Should we hire this person or not?
• Should we launch this product or not?
• Should we go with option A or option B?

This narrow framing limits your possibilities and often leads to suboptimal choices.

Instead, ask “What else could we do?” For example:

• Rather than just deciding whether to hire a full-time employee, consider contractors, part-time staff, or redistributing work
• Instead of choosing between two marketing strategies, look for ways to test both or combine elements of each

A helpful technique is the “vanishing options” test. Ask yourself: “If both current options disappeared, what would we do?” This forces creative thinking.

One piece of advice that can be helpful in many situations is to “fall in love twice” when making decisions. Don’t commit to the first good option you find. Keep exploring until you have at least two solid alternatives to compare.

12. Be Clear About Decision Methods and Ownership

Have you ever been in a meeting where people thought a discussion was just for input, but you thought a decision was made (or someone else did)? Or was there confusion or conflict because different people thought the decision was theirs?

When there is confusion about how decisions are made and who owns them, it creates frustration and delays. To avoid this:

• Clarify upfront how the decision will be made:
  • Is it your decision after getting input?
  • Will you delegate it to someone else?
  • Is it a majority vote?
  • Is it a group consensus?
• Be explicit about who owns the final decision
  • “I’m gathering input and will decide by Friday.”
  • “This is Jane’s call.”
  • “We’ll discuss this decision, then vote.”

Doing this makes it clear to everyone who owns what decision and their role in it (whether as a decider or a person giving information, etc.)

Implementation Principles

Making a good decision is only half the battle. These practices help you put your decisions into action effectively and handle the uncertainties that may follow.

13. Prepare for Potential Failure

Even the best decisions can go wrong. Smart leaders don’t just hope for the best – they prepare for things to go sideways.

One helpful technique is called the “premortem.” Gather your team together and ask: Imagine it’s six months in the future, and our decision has completely failed. How did it fail and why?

Doing this helps you identify potential problems before they happen. For example, if you’re launching a new product, you might realize during a premortem that your sales team needs specific training or that a key customer segment might resist the change.

By spotting these risks early, you can:

• Build contingency plans
• Set up early warning systems
• Prepare backup options
• Communicate potential challenges honestly

14. Distribute Decision-Making Appropriately

Sometimes leaders think that as the leader, they are supposed to make all the decisions. But that’s just not true. In fact, leaders are often more detached from reality and what’s going on than they think they are, so the decisions they make won’t be that good because of it.

Instead, you should push decision-making as close to the problem as you can.

Why? Because:

• People closer to the problem usually have more information
• Team members feel more ownership when they make decisions
• You avoid becoming a bottleneck
• You free yourself to focus on truly important matters

To do this effectively, set clear expectations, provide guidelines and parameters, give whatever training is needed, and release your people to make decisions within their areas.

15. Consider the Cost of Not Deciding

Sometimes the biggest risk isn’t making the wrong decision – it’s making no decision at all.

Indecision has real costs:

• Missed opportunities
• Team frustration and confusion
• Problems that grow worse while you delay
• Resources tied up in analysis rather than action

When you find yourself stuck gathering more information or waiting for perfect clarity, ask:

• What’s the cost of delaying this decision by a day? A week? A month?
• What opportunities might we miss while waiting?
• Is a “good enough” decision now better than a “perfect” decision later?

Remember, you likely will never have 100% of the information you need to make a “perfect” decision. In fact, that doesn’t exist. When it’s time to decide, you make the best decision possible with the information you have.

Making the decision doesn’t mean you can’t review it later. You can set “tripwires” such as after $X is spent or after 3 months or when certain new information comes in, you will review the decision.

Remember that not deciding is itself a decision – you are deciding to stick with the status quo or do nothing – so make sure you choose wisely.

16. Make Action Plans with Clear Ownership

How many times have you been in a meeting where great decisions were made, but nothing happened afterward?

Even brilliant decisions fail without it being clear who owns what step or action. After any important decision:

• Break down the next steps into specific actions
• Assign a single owner to each action (avoid group responsibility)
• Set clear deadlines for each step
• Establish how and when progress will be tracked

Be explicit about who owns what. Instead of “let’s have the marketing plan done by Friday,” have it assigned to a specific person.

Document the decisions and who is doing what, and make sure to follow up.

Doing this makes sure the decision will be acted upon and not left in limbo.

17. Document Your Decisions and Thinking

Great leaders learn from their decisions over time, but our memories are notoriously unreliable. That’s why documenting your decision-making process is so valuable.

For important decisions, take a few minutes to record:

• What you decided
• Why you made that choice
• What information you considered
• What alternatives you explored
• What uncertainties or risks you identified

This documentation serves multiple purposes:

• It lets you review and improve your decision-making process
• It helps you explain your rationale to others when needed
• It prevents you from second-guessing yourself later
• It creates a learning record you can refer to in similar situations

You don’t need elaborate systems – a simple note in a Google doc or journal will work fine.

When you look back at past decisions, focus on improving your process rather than beating yourself up about outcomes that didn’t turn out as expected.

Conclusion

Following effective practices can make all the difference in your decision making, both at work and in life.

Remember that decision-making is a skill – it gets better with practice and conscious effort. You won’t implement all these practices perfectly from day one, and that’s okay.

What decision do you need to make this week? How will you apply these practices?