Entrepreneurship is, in large part, reliant on decision making for success. After creating your business plan, you’ll have a blueprint for what you want your business to be and how you’re going to develop it; but moving forward, you’ll be faced with countless tough decisions. On a small level, how do you want to prioritize your day? How are you going to negotiate this deal? On a larger level, who are you going to hire for this position? How will you challenge this new competitor? How are you going to pivot the business to escape bankruptcy?
It’s no surprise that some of the best entrepreneurs also happen to be the best decision makers. They’re able to take any decision, big or small, and address it in a way that’s both objective and appropriate. That doesn’t mean they make the right call every time; we all make mistakes, and successful entrepreneurs are no different. But over time, their decisions tend to lead them in better directions.
Related: How to Improve Your Critical Thinking Skills and Make Better Business Decisions
So what actionable steps can you take to make smarter decisions in your business?
What is a smart decision?
First, we have to define what a “smart” decision is. Smarter decisions tend to have a few things in common:
- Objectivity. Good decisions are objective, based on facts and logic.
- Stoicism. Decisions shouldn’t be influenced by raw emotions (in most cases).
- Full information. The more information you have, the better.
- Alignment with goals and values. Good decisions should be aligned fully with your company’s goals and values.
How can you achieve these qualities in your decision making?
Reduce decision fatigue
Decision fatigue is a simple psychological concept that many of us underestimate, but the more decisions we make in a given period, the weaker our decision-making abilities become. Over time, we become bogged down with stress and distractions, and ultimately make worse decisions for ourselves and our businesses. This even occurs with tiny, seemingly inconsequential decisions.
Many famous entrepreneurs and leaders, including Barack Obama, Richard Branson and Mark Zuckerberg, have strategies in place to reduce decision fatigue by stripping away unimportant decisions. For example, you might wear the same thing every day or have the same thing for breakfast. It may not seem like much, but over time, making fewer decisions each day can make you a better decision maker.
Get all the facts
As a leader, it’s important to be decisive, but it’s also important to have all the facts before you move forward with any decision. Are you sure that all the information you have is accurate? Are there any details you might be missing? What are the alternatives?
Related: Best Ways to Use Data in Making Decisions
Get to a neutral emotion
When it’s time to make a final decision, you have to remove emotion from the equation as much as possible. If you’re making an impulsive call about an emergency situation, this can be extremely difficult. However, there are a number of techniques that can help you, such as:
- Walking away. Sometimes, moving to a different physical location is all it takes to shift your mindset. If you’ve ever experienced road rage, you know that as soon as you’re parked, away from the road and out of your car, the situation doesn’t seem so bad. Try walking away and thinking through your decision in another, less intense location.
- Meditating. Many people swear by the power of meditation. Simply taking a few minutes to reflect on your own state of mind can be enough to dissolve the emotions that might otherwise influence your decision.
- Considering the decision from an outside perspective. You can also get a better sense for the objective reality of the situation by considering it from an outsider’s perspective. A common trick is to make your decision as if you’re advising a friend: If one of your closest friends were in this position, what would you tell them to do? You’ll suddenly consider more variables, and you’ll feel more detached from the situation (in a good way).
Talk to other experts
While the final decision is yours, it can be helpful to learn about the perspectives of other experts in this area. Do you have employees or partners who can share their ideas and gut feelings? Do you know of mentors or experienced professionals you can call for some quick advice? If you don’t have anyone to personally contact, you can substitute reading or podcast listening; what do other experts have to say about this situation?
“Good” decisions and “bad” decisions aren’t defined by the outcomes to which they lead; instead, they’re defined by the process used by the person making them. You can make better decisions by reducing decision fatigue, getting more information, clearing yourself of emotion and talking to other experts. This doesn’t guarantee all your decisions will work out, but it will increase each decision’s likelihood of success.
By: Timothy Carter Entrepreneur Leadership Network Contributor
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