Decision Making Process

The greatest challenges in the world can be accomplished by breaking them down into steps. In this way, once you complete one small step successfully, you are motivated to take the next few steps. Even if one step goes wrong, you don’t have to start over; you can simply restart that particular step.

Making decisions is one of the key aspects of any job role. The scale and impact of the decision vary depending on your level and designation. By breaking decision-making down into a process, it is no longer a subjective choice but rather a data-driven, thought-through process.

The 7-step business decision-making process is an effective method that can help you achieve your business goals. While you may be following some of these steps without actually knowing it, you will make more profitable and effective decisions by following each step in order.

7 Steps involved in the Decision Making Process

Step 1: Identify the exact decision you need to make

It may sound fairly simple, but it is often the hardest step. The first step to solving a problem is identifying the real problem.

A problem is nothing but a changed circumstance or reaction than you are used to dealing with. In such situations, you need to make decisions that help you get back on track or move forward significantly.

There are many reasons for a problem to arise:

  • New opportunities arise that make it imperative for you to improve or upgrade your offerings to stay ahead.
  • New competitors or new offerings from existing competitors that threaten your current position.
  • Non-compliance with your existing plan
  • Forces beyond your control affecting your business

Consider an example. Despite attempts to create a safe working environment, your organisation has a high employee churn rate. Better opportunities elsewhere or higher pay grades might be the reason for this. There could be many reasons for so many employees leaving your organisation, and this is what you need to identify before trying to find a solution.

 Talk to Our Counselor Today 

Step 2: Gather relevant information

When a problem arises, people tend to look too hard for the right answers when they should be asking the right questions. You might think that more employees leave because of rigid working hours. In your mind, the answer to this problem then becomes flexible working hours for all your employees. However, it wouldn’t be the best approach to follow without solid proof.

In this stage of the process, try to gather as much information as possible. You will need to look at patterns in the exit interviews you take, the time when more people leave during the year, and external factors that you can’t control, which might have affected former employee decisions. Some questions you can ask are:

  • What proof is there that the problem exists?
  • When and where does it seem to have originated from?
  • Which processes, teams and individuals are more closely associated with the problem area?
  • How serious is the impact on your short-term and long-term business goals?

This step is all about busting assumptions. When you are a part of a process for too long, you tend to take it for granted that that’s how most people work. It forms a bias in your mind which can cloud your objectivity and judgment. Therefore, you need to talk to as many different teams together and as individuals to gather relevant information. If too many people are leaving during a particular time, say at the end of the financial year, that might be an important factor to consider.

Step 3: Recognise alternatives and options

When you start collecting information, you will realise that there is always more than one solution to any problem. That is why this third step is so important. Once you start identifying the alternatives, you have to establish fixed criteria that will determine which method is the most effective and best suited to your business goals.

Some of the criteria successful managers use are:

  • Cost and financial benefits
  • Quantity benefits
  • Quality benefits
  • Additional resources that might be needed — human, physical and monetary
  • External factors such as the economic, political and environmental situation of the country
  • Cultural and behavioural acceptance
  • Past learnings from similar situations
  • Sustainability

Let’s look at the example in this article. Once you have enough information to know that more employees leave at the end of the financial year, it could lead to the knowledge that this has got to do with the increments or appraisals offered at that time. It could either be a lack of appraisals, delayed promotions, or lack of incentives during the recently-ended festival season. It could also be a combination of a few of these reasons. Applying predetermined criteria helps you to carry out the next step in a well-informed manner.

You May Also Like: Important Facts about Information Technology Sector!

Step 4: Weighing the evidence

Any alternative you come up with will have its pros and cons. If you are looking for an alternative with zero cons, your decision-making process will come to a halt. This step aims to ensure that whichever alternative you choose, you get the best possible outcome within your budget and a desirable timeframe. If you feel your employees leaving is because of dissatisfactory appraisals, giving everyone a significant raise could be a solution. However, it might affect the quality of work, the value of your organisation and might exceed your pre-approved budget.

Successful managers can see far into the future. In this step, you have to predict what the result of your decision will look like after implementation. You also need to be prepared for additional challenges that this decision might bring up. While doing this, you will realise that some options work better than others, whether in terms of the time taken to implement or the cost to your company.

At this stage, it helps to list out all the options priority-wise. It also helps to get multiple opinions on your decision before carrying it out.

Step 5: Evaluate the alternatives

Once you have all the details of each possible alternative, you need to choose the one that is best suited to your business goals. You will often realise that this final alternative is a combination of two separate options you had listed down.

Many times these are the options at the top of your list. Evaluate the risks that every alternative poses before proceeding to decide and get different perspectives that will confirm your hunches and highlight your biases. It will also let you know if you have overlooked any risks or benefits for any alternatives.

Giving all your existing employees a salary hike at the time of appraisals might seem like the right solution, but might cost a lot. Instead, give employees who have worked for more than two years a significant hike, which could motivate other employees to stay on longer. You could also give more benefits and a better leave policy, along with incentives during the festive season.

Managers need to be skilled in analysing and coming up with different possibilities and evaluating their feasibility.

Additional Read: Top 9 New Technology Trends for 2023

Step 6: Implementing the decisions

All of the first five steps and their learnings lead up to this step. Implementation is the most action-oriented step in the decision-making process. No matter what your evaluation and analysis show, whether your idea will be a success or not depends on its ultimate execution.

Let’s assume you conclude that increased incentives and structured appraisals are the best solutions for your business problem. As you get ready to implement your decision, there are many different factors to keep in mind:

  • The correct time to roll out your plan, keeping in mind user behaviour, special occasions, and your market’s socio-economic stability.
  • Acceptance of your decision by all those involved and buy-ins from all internal stakeholders.
  • The objective and execution plan must be communicated to everyone involved.
  • Collection of relevant resources for each stage of execution so that you don’t get stuck halfway through the implementation.
  • Plan a proper rollout of your decision and give your customers a clear message that highlights your offering in the best way possible.
  • Buffer room for factors beyond your control like natural calamities and sudden political or economic instability can disrupt your execution plan or force your target audience to modify their behaviour.

If you have put in enough thought towards the implementation, then carrying it out should not be a problem. Don’t overthink it, be aware of the resources you need, and be confident in your decision.

Step 7: Review the decision

For many organisations, the decision-making process ends in step six. But successful managers know that execution is not the last step of the process. It is important to evaluate the consequences and feedback of your actions to understand what worked and what didn’t and modify your future plans of action. Larger organisations often consolidate their learnings to be shared with the rest of their teams after implementing a decision.

Once you’ve executed your appraisal and incentive plan for your employees, try and answer a few questions to correctly gauge your decision’s success.

  • What was the outcome of your plan within the given timeframe? Did it meet the key performance indicators for your decision?
  • Was the decision a success? What did you do right? What additional factors contributed to the success of your decision?
  • Was the decision a failure? What were the reasons for the plan going sideways? Was there something you overlooked? Is there a way to turn this around next time?

No one makes the right decisions all the time. Even the most successful managers make silly mistakes sometimes. The key thing is to learn from your mistakes and evolve with professional training programs. Making decisions is a key part of a manager’s job, and the right training can produce positive career outcomes.

Enquire Now

Armin Vans
Anvesha Jain has a great variety of knowledge in the education industry with more than 3 years of experience. He has also done work with many educational institutes as a Career counsellor. He also likes to write blogs on different topics like education and career guidance



Please enter your comment!
Please enter your name here
You have entered an incorrect email address!
Please enter your email address here


Submitted Successfully...