Entrepreneurs’ Tips to Making Good Business Decisions
February 12, 2015 by Raymond Lee
Entrepreneurs are considered serial decision makers because they make lots of decisions every day and are generally wired to be risk takers and aren’t afraid of learning from their mistakes. Decision-making usually comes easier to entrepreneurs and high “D” personalities versus people who tend to be more risk averse. For those in which decision-making is more natural, you should focus on improving the quality of your decisions. For those in which decisions are harder to make, you need to focus on following effective decision making steps and using techniques to help synthesize information. Then, act upon those decisions that you have made rather than procrastinating.
Good decisions require a person to use a number of characteristics: experience, intuition, intelligence, awareness of the business environment, good listening skills and the ability to react when necessary. Here are some tips from entrepreneurs regarding making good business decisions:
- Understand your company’s business – make sure you have all of the critical information that impacts the business
- Results oriented – think about the possible outcomes of your decision and understand how they impact both short and long-term company goals
- 360 Feedback – get feedback from other departments, your manager, your peers, your accountability partner
- Be Calm – if you are getting overwhelmed by all of the information, stop and take some deep breaths so you can once again focus on the decision at hand
- Keep moving forward – focus on what is best for your company; don’t put off important decisions and don’t continuously worry about past mistakes
- Continue improving – learn what went right and what went wrong and use that information as you make future decisions
Knowing some common mistakes before making decisions can be useful so you can potentially avoid them during your process.
- Relying too much on expert information. Keep in mind that experts are human too and have their own set of biases. It is better to seek out multiple sources to get information rather than relying on a single source.
- Overestimating the value of information received from other people. Sometimes, we look to others and place more weight on their opinion than we do our own. When you find yourself doing this, it is best to ask yourself: Do they know more about this problem than I do? Do they have personal experience with this issue? Keep other people’s opinions in perspective.
- Underestimating the value of information received from other people. Other times we may have a tendency to discount information received from others. Keep in mind these people may have a different set of values, however they can provide a different perspective on a situation. This information can open up your mind to other alternatives. Next time you are discounting someone’s opinion, ask yourself why.
- Only hearing what you want to hear and seeing what you want to see. Be aware of your own prejudices and expectations so that you can stay open to other perspectives and opinions.
- Not listening to your gut reaction. Our brains take in more information than we realize and when making a decision we may have a physical response. Have you ever had a headache or stomachache after making a decision? This is your body telling you something. Our society generally wants us to ignore our feelings/gut reactions, but if you listen to your intuition you can make better decisions.
- Taking too little time to make a decision. If you rush to a conclusion without evaluating all of the options and information, you may be making an incorrect decision. It is important to follow the steps of the decision making process and ensure that you are working with as much information as possible.
- Taking too much time to make a decision. If you procrastinate in making a decision or don’t make the decision at all, you can lose the respect of your manager and your peers, which obviously negatively impacts your career path. It is best to set a reasonable deadline for yourself and stick to it.
Decision-making is a competency that can be developed through practice, practice and more practice. Ask your accountability partner and manager to provide feedback along the way as you continue to work on making sound business decisions.
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