Making decisions is difficult in business. There are many moving parts, and one small decision can have catastrophic effects across a whole business. Most often, large and successful companies have a board of directors to make big decisions. The idea is that by utilizing many brains instead of one, potential bias will be worked out by the time a decision is made.
Biases can form when trying to make an important decision. This is called the Confirming Evidence Trap, also known as Confirmation Bias. This is when a person will intentionally see out evidence to validate their preexisting beliefs. Rather than viewing the situation from all sides, it is a type of cognitive bias. The critical error with this thinking is it leaves the potential for the business to get blind-sided by dangers that may have been diminished with further planning.
To boost a strong sense of culture and create a more harmonious work environment, ensure that those coming up with ideas for the business are also involved in the execution of those decisions. Many companies fail simply because not all employees are on the same page or understand the reasoning for why decisions are being made. Decisions will affect everyone in the workplace. Creating a sense of inclusiveness will benefit everyone.
Lessons From The Past
A key decision-making error that is common practice today is basing future business decisions off lessons from the past. While it is important to learn from mistakes and correct errors that were made previously, the future houses various struggles that could never be predicted from analyzing the past. Rather, companies need to practice quick agility, so they can always stay ahead and be willing to adapt.
Improving a business decision-making within a company is to utilize probability effectively. This is simply how likely something is to happen. Now this might sound very basic, however it’s not always so straightforward. Probability concepts are abstract ideas used to identify the degree of risk a business decision involves. By growing your probability skills further, you will in turn boost your ability to map out complicated decisions to support your claims (or see a different aspect to the decision).
Don’t Fall In Love
An expert in the area, Daniel Kahneman , who won a Nobel Prize in economics, suggests that a team should never “fall in love with a decision”. He explains that this tends to cloud the judgment of a team into thinking that there no better way to innovate on the idea. It is important to stay open minded and be willing to change course when it comes to making business decisions.