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Whether in personal or professional life, every day and throughout the day, we make decisions. The vast majority are so simple, it doesn’t even seem like you have to make a choice. Another large contingent of situations requires only doing as we have always done. But there are some that are complicated and difficult to take.
It is about this set that we need to ask: Do you know how to make decisions? How is your decision-making process? Is there a factor involved, or do you rely on intuition, your experience, or perhaps some other aspect?
For know that decision-making can – and usually should – be a practical and well-defined process.
Therefore, today we are going to talk about how to make decisions systematically and, above all, with a high degree of impersonality in the management of a company.
What is decision making?
Objectively, most will answer that the decision-making process in companies consists of choosing one among at least two possible alternatives, based on the pros and cons of each choice.
Nothing new and/or controversial about it, correct?
That’s where the mistakes begin!
First, because in practice most do not act like this, that is, putting pros and cons on the scales, only then defining the best choice.
Second, because although this type of definition is reasonably consensual, it can be quite restrictive.
This restriction is based on how most of us think and behave.
For most situations, there is already a natural tendency based on our experience, our values, what we like and what we don’t like, what the majority believes and defends, and a series of other factors.
Want an example?
Think of a clothing color.
Possibly most will think about the color they prefer and which should be the dominant color in their wardrobe. So, when you and your wife or maybe husband are in a store choosing a shirt and your spouse comes with one in a different color, it is likely that the decision will be based on the color you usually choose.
If she/he argues “but this color is prettier”, chances are good that you will defend your choice with some argument. If she insists, with some other “quality” resulting from the color she/he chose, you will quickly think of a counter-argument. And this can go on, depending on how “brave” and willing you are, until the other loses patience and says: “OK, take that one! But next time, don’t ask me anything!”.
That is, many of our decisions are not the result of analysis, but of the defense of points of view, of what we like, what we believe or even what is common sense.
Ok, some will say that this is a type of decision in which this posture is acceptable and that, except for an eventual uneasiness between the couple, there are no more serious consequences, but that in the management of a company, things are different.
Do you want another example then?
You are a Sales Manager and your supervisor presents you with the latest quarterly sales report, in which one of the salespeople has not only failed to meet his monthly targets for the past three months, but is well below them.
In the vast majority of cases, this scenario of goals never achieved and even lower than desired, is practically the necessary reason to dismiss him. Even more. It is likely that he showed it to you, just to back up the previously made decision.
At this point, it is natural for us to ask: “if it is not a reason to dismiss, what do we do?”.
That’s where the first paradigm shift comes!
Situation analysis in decision making
Situation analysis in decision-making consists of bringing together as many aspects as possible that are decisive for the current scenario.
Let’s take as a basis the hypothetical case – but very common in companies – of our salesperson who doesn’t sell.
Sales leadership, whether supervisor or manager, needs to behave as such, which means a series of responsibilities, but among the main ones, that your team’s results are, in part, your results. In other words, the insufficient results of “our” salesperson may be our fault as their leader.
The seller’s situation may involve, for example:
- Do you have the necessary experience?
- Did you receive adequate training?
- Were you accompanied in the field by the supervisor to identify common mistakes in Sales?
- Is the potential of your customer base compatible with your goal?
- Do you lack motivation?
- Does he have problems that are affecting his performance?
- Do you have the right profile for the job?
- Are there unresolved or unresolved problems with your customers that are the responsibility of other areas, such as support, technical assistance or even finance?
The above list can – and should – grow a lot, but the important thing is to characterize that this type of analysis takes the focus away from the result and starts to concentrate on the possible causes of the unsatisfactory result.
With this, the decision is no longer restricted to dismissing or not.
Let’s even assume that he doesn’t have the most suitable profile for the job, but was hired because he has knowledge in programming and the company sells systems / software. Soon, it was imagined that this knowledge could be useful in exposing some characteristics to customers.
Long story short, when investigating the situation deeply, the supervisor saw that the mistake was a gamble and a wrong decision in the selection process, but that it was still possible to correct it.
With the help of Human Resources, he ended up relocating our young salesperson to the software development area, which needed a programmer with his profile and experience.
Although it seems just fiction, cases like this example are quite common. The difference is that the situation analysis applied here could produce a new and different decision from those originally taken – to dismiss or not.
It is even common that performance evaluations are used with the strict purpose of deciding who are those who “deserve” or not to be part of the team.
Understanding the main types of decision
Another means of deciding is to recognize and identify decisions and frame them according to their type.
1. Personal decisions
They are called personal decisions, not because they are taken within the scope of personal life, but when they are strongly influenced by individual issues, such as values and beliefs, cultural baggage, habits, tastes.
Unfortunately, many decision makers allow themselves to be influenced by such aspects, making the choice much more personal than rational, weighted and evaluated.
Changing such behavior first requires acknowledging that this behavior exists and secondly, discipline to change. The manager needs to know that by not changing, leadership over his team will be threatened.
Furthermore, the values and culture of the company must prevail, which are not necessarily the same as those of the manager, although they should.
Conveying to reality, in companies that value and manage talent, situations like that of our “programming salesperson” happen naturally and what is known as lateral promotion.
2. Technical decision
History is full of examples of failures that resulted from choices that did not respect the strictly technical aspect.
It is when, for example, in the name of a market appeal, a design requirement is not met, such as when using lighter or cheaper materials, or with better aesthetics, to the detriment of resistance / durability.
It is usually characterized as the clash between Engineering and Marketing, or between Marketing and Sales, which constantly do not speak the same language, but which they should.
Needless to say whose final word should be when the choice needs to consider the technical aspect.
3. Shared decision
In a sense, this type is also the solution to the previous dilemma, when those involved do not initially agree but must work to make a collaborative/shared choice.
In this type, all participants contribute to a single, consensus decision.
Maturity is needed here so that the technical aspects are respected, but that the alternatives are considered.
That is, is it possible to use another raw material, cheaper and with a better final appearance? What is the impact on quality? How does this affect the cost? How much does the project change? Is it better for the consumer?
Therefore, those involved cannot and should not behave like the couple who went shopping, but who disagreed about the color. It is only necessary to stick to the objective and practical aspects.
4. Strategic decision
These are the decisions that reflect on the future and on the direction of the company.
Although they usually involve a level of uncertainty, they are decisions that necessarily need to consider, whenever possible, the following aspects:
- Prognosis – it is necessary to collect, organize and evaluate as much data / facts as possible, in order to have an indication of the result of the process in question;
- Objectives – the objectives that the company has must be considered and how the decision impacts, bringing the company closer or further away from these objectives;
- Risks – knowing and estimating the possible risks involved;
- Contingency – a contingency plan serves to deal with possible threats / risks, or anything that could significantly compromise a process or operation;
- Planning – more than any other condition, strategic decisions need to be supported by meticulous planning and answer “how much”, “when”, “why”, “who”, “how”;
- Control – it is essential to control, which means being able to measure the partial/intermediate results of the decision in real time, to intervene when and if necessary, correcting routes.
Problem recognition in decision making
The last business day of the month arrives and the owners of retail businesses are plagued by countless sellers asking the same thing: “Fulan help me! Advance and place an order so I can close the goal of the month!”.
If you are one, you know how common this is and you might even be laughing at the situation.
What does not seem clear to whoever is on the other side, the seller, is that by acting like this, he is just moving the problem around, because the order that should only be placed in the following month, was brought forward and he will no longer be able to account for it. it on next month’s goal. That is, it already starts with the next delayed goal.
Recognizing the problem here means several things, but mainly:
- The seller needs to carry out prospecting in a better, more intense way and expand his portfolio;
- Work on the recovery of inactive customers;
- There is no commercial planning and the salesperson arrived on the last business day with the target not yet achieved;
- Most likely, in exchange for this “favor”, he will have to offer more discounts, more flexible deadlines, who knows even smaller quantities.
In other words, the old saying in Sales applies here, that “there is no way to reap different results, always doing the same things”.
As long as the existing problem is not recognized and known, its size and everything that it involves, there is no way to make different decisions.
See what your company has done in similar situations. If possible, be attentive and open to other people’s experience, after all, there is no problem in “copying” what worked with others.
It worked? No? Why not? What could have been done differently?
Making a mistake is not always a problem. It becomes, when you don’t learn from it and don’t look for different paths, like “our” salesperson who will see himself again on the last day of the following month, calling all his customers and begging for a “saving request”.
Urgency vs Importance
Our last strategy to be applied in the decision-making process is based on the well-known dilemma that was even the subject of a post on our blog – urgent versus important.
For obvious and even intuitive reasons, most people decide to pay attention to everything that is urgent, whether in their personal or professional lives. And we do not argue that this is not the case.
However, it is necessary to learn to correctly identify and prioritize what is urgent and what is important.
When you decide only on the basis of urgency, whether or not it is important, invariably many of the situations that are just important but not urgent will become urgent and will require your immediate attention, whether or not you can.
Often, the impacts/consequences, the costs and time required for the solution, will be greater than if they had been addressed when they were “only” important.
Conclusion
Knowing how to make decisions that produce good outcomes can and should be a conscious, rational, practical and systematic process.
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