how to make a decision

Sometimes making decisions can be hard, even simple ones.

We may give ourselves too many options, too few options, try to only act if we are certain of the results, fall in love with something only to regret it later, and so on.

It doesn’t have to be this way. While some decisions still may be tough, these six simple steps can help us make better decisions.

These work for decisions in life and business, and they also work from simple decisions to complex ones.

Let’s dive in.

 

Step 1: Be Clear About What You Are Deciding

This may seem like a simple, no-brainier step, but too often decisions are made without ever defining what is being decided.

Decisions are made to solve some sort of problem – you’re hungry so you need to decide what to eat; you want to improve your education, so you need to decide what school to go to; you need a job to start earning some money, so you need to decide what job to pursue (or even what area to pursue).

Sometimes we make decisions without figuring out what the real problem is. If your stomach keeps hurting you, and you are deciding what food to eat when it’s really your appendix hurting, you’re not solving the right problem.

Many businesses (and people) waste money and time with quick decisions without taking the time to figure out what they are really deciding and what they are trying to solve.

An example:

If you are stressed, for some of us, the question we might ask is, “what should I eat?”

Instead, what is it you are truly trying to solve? If it’s how to overcome your stress, then asking, “what’s the best way for me to deal with my stress” is a better question that leads to better options.

Another example may be something as simple as having an extra $500 to spend. For some, the question may be “What TV, phone, computer, etc. should I buy?” when the real question you need to decide on is “what is the best way to use my money?”

Define it:

Before making a decision, make sure to define what you are deciding so that, as you go through the rest of the process, you can make sure you are getting the right and best options for the right decision.

 

 

Step 2: Know your objectives and develop set criteria to judge all options by

Now that you know what decision/problem you are deciding on, now it’s time to figure out your objectives and set the criteria to choose by.

Why is this important?

  1. If you don’t know what your objectives are, then you may choose an option that doesn’t meet your needs.
  2. Without defined criteria, it’s easy to weigh different criteria differently for different options. For example, you are house hunting. One house has a great kitchen that you love. The second has a beautiful yard but a terrible kitchen. Without set criteria, you may put too much weight on the beautiful yard when it’s a great kitchen that you need most.

Your objectives are what you want to accomplish with your decision, and your criteria can be the objectives themselves (depending on the decision) or what needs to happen or what the option needs to have that will help you reach those objectives.

Take time to think about it. Don’t rush the process. A poor set of criteria may cause you to end up with a poor result.  Write each option down.

For example, for a house, you might write:

  • A fenced backyard for the kids to play in
  • At least 3 bedrooms and 2 baths
  • A large dining area so that we can entertain guests
  • Good school system nearby
  • No more than 30 minutes to work

You may have to think about it for a while or do some research on the topic as well. Ask other people what criteria they use. It can be easy to forget things like commute time, etc.

Let’s say you are going out to eat, here are sample criteria that you may write:

  • Quality food (no fast food)
  • A sit-down restaurant
  • Relaxed atmosphere that’s not rushed
  • Quiet enough to talk and enjoy each other’s company
  • Below $X
  • Not pizza, Italian, or Mexican
  • Within 20 minute distance

Some decisions will be easier than others to do criteria. Choosing where to eat or what game to play will be a lot faster than what job to take or what house to buy.

And of course, some decisions you wouldn’t write all the criteria down. Choosing what game or movie to watch you may not do that – but taking the time to figure out what you want out of the movie or game can save you time and headache when looking at what to choose.

 

Be careful of limiting yourself by your criteria

Do make sure that the criteria you set are what you are really looking for. Sometimes what we choose is a means to an end, but we don’t realize it’s the end we want.

For example, when buying a house, you may say you want a big kitchen. Why do you want a big kitchen?  It could be you want plenty of space for hosting guests or you want to make sure you have extra storage or you like a big area to cook in.

Depending on the objective, other options could fit your needs besides a big kitchen. But if all you do is focus on the big kitchen, you might miss out on what you are looking for or a better option.

Does that make sense?

Sometimes just asking “why” on our criteria can help us see the bigger picture of what we are looking for.

 

Give weight to the criteria

Once you have your criteria written out, give weight to each criterion. What’s more important? What is a must-have versus a would-like-to-have?

Why? Because likely you will have to make some tradeoffs. There’s a chance you may not be able to get everything on your list. Giving weight to your criteria helps you choose the items with the least “loss”.

One way to do it is to have some “must-haves”. Pick one or two (or more) things that your options “must-have”.

Then you could have “would like to have”. Then have “would be nice but not a necessity”. You can, of course, label those as you want, I just made them long for explanation’s sake.

You could also add numbers, such as 0-3 or 1-10 with how important each one is to you to have.

After you weigh them, compare the criteria to each other. Say you gave a nice yard a 5 and kitchen 4, but you know you want the nicer kitchen more, it helps you make sure you weighed your items correctly.

One method to make sure you order them correctly is to take each criterion and compare it to every single one. The more important one you put higher. You keep doing that to every one till you have them in the right order.

 

Step 3: Develop options for your decision

To make a decision, you need different options to choose from. However, be careful of a few things.

  1. Don’t limit your options too far. Having only two options can give you a narrow frame. Try adding a couple of options if that is all you have.
  2. Don’t give yourself too many options – having too many options makes decisions harder and makes the choice we make less satisfying. Three to five options is a great start. Seven is getting up there but may be doable.
  3. Be careful about falling in love with an option. It’s easy to “fall in love” with one choice and not give the other ones a fair chance (and skew the criteria in favor of it). I’ve heard it said that when buying a house or hiring an employee (or such), fall in love twice before deciding.

When you are buying a house, for example, you may go through a bunch of houses looking and have multiple choices to pick from. Be careful from having a list of 20. Try to use your criteria to whittle the list down to just a few. If some don’t meet your must-haves, go ahead and cut them out.

If you only have a couple of options, you may want to grow the list by a few. Asking yourself what you would do if your current options weren’t available can give you some other ideas.

Seeking out dissent and disagreement can also open your eyes to different options you may not have seen (and can help you set better criteria).

What’s the magic number for options to have? There isn’t one. It’s good to have more than two. Three, four, or five of the best picks may be good, it just depends on what you are deciding and what’s available. But do remember that the more options you have, the greater the chance of having less satisfaction when you do decide.

As mentioned earlier, as your options come in, use your criteria to cut some options out. If some options don’t have your must-haves, then you can get rid of those (though, if you always end up with no options going through your must-haves, you may need to reexamine those).

You also may have some options that meet the criteria, but some options are clearly better than the others. You can get rid of those as well.

For example, you two houses with similar commutes, nice kitchens, etc., but one of them has a not-so-nice yard and is on a busy street (and you prefer quiet), then you can go ahead and cut that off because the other house offers the same except a better yard and quieter road.

Make sense?

 

Step 4: Deal with tradeoffs

The fact is that in some scenarios, find a perfect solution may not be possible. You may not find a job or house that has everything you want.

You must deal with tradeoffs.

What do I mean by tradeoffs? It means you may have to be willing to give up some of the options you want. One house may have some things you want, another may have another. You have to decide what’s more important.

One way is to use the weights we discussed earlier. You can see what criteria are more important than others to give up.

That still can be hard though. You may go through each option and ask, “am I willing to give up X for Y? What’s more important to me?”

There’s also a method called Even Swaps that can help you cut out criteria and make better tradeoffs.

 

Step 5: Contingency planning and mitigation

No matter how much we research and prepare for the decision, we still may not know how it will turn out. Decisions are probability, not certainty.

That’s why contingency planning is important, especially in business.

Contingency planning is planning for how things could go wrong and what steps you would take.

For example, you are planning a big project at work, asking and looking at what could go wrong can help you prepare for it and keep it from happening. If it does, you will also have a plan on how to deal with it.

If you are buying a house, you may plan for if the neighbors are loud or what you would do if the commute is longer than expected.

If you are dealing with tradeoffs, then you may work on planning on how to overcome the negatives you are having to deal with.

One great way to do contingency planning is a premortem. A premortem is where you ask “It’s 1 year from now and everything failed/bombed. What happened and why?”

Then you list every reason that your plan, project, decision messed up and failed. Then you work to make sure it doesn’t happen.

You can also think of it as a backup plan as well. Even if it’s something as going out to the movies on a date. If the movie ends up being a stinker, what would you do then? How would you save the date?

 

Step 6: Make an action plan (and take action)

This will look differently depending on the situation.

At a business, you want an action plan outlining what is going to be done, by whom, and by when. Then you want to follow up to make sure it’s done.

Personally, it may be different. You may decide and make a list of things that you need to do toward that decision and set deadlines. You may list out tasks to help mitigate possible negatives and work on those as well.

Once you know what you are going to do and have a list of how you are going to do it, then take action! Make it happen! Do it!

 

Conclusion

We can’t always control the outcome, but we can do our best to prepare and make the best decision. Sometimes good decisions will have bad outcomes. It doesn’t make it a bad decision.

These 6 steps are steps you can take from the simplest to the hardest decision, though with simple decisions you may not do everything in the list exactly. It applies both personally and in business.

Make sure you know what you are deciding and what the criteria you are looking for your decision.

Once you have that, make sure you have some good alternatives to choose from and compare them to your criteria. Makes sure not to fall in love with the first “good” option you see and miss out on something great.

Then deal with the tradeoffs you may have to make. Work on mitigating the negative and plan for possible issues that might come up. Make an action plan on it and take action.

Do this, and you are well on your way to making better decisions.

Now to you: Let me know in the comments below, “What decisions do you struggle with making right now?”