I have long since realized that managing a team of individuals, no matter how small or big that group may be, can be extremely taxing since you have to learn to multitask and address various concerns. I’ve often wished I could hire a robot that could do some of the more menial tasks for me so I could focus on more pivotal matters, especially with regard to making decisions. That’s why I’ve learned the value of structured processes, especially in decision-making.
The most effective decision-making method for small groups is a structured, trackable method where established rules help make decisions simpler and quicker for you. A structured framework provides you with clearer views of what the outcomes might be for each potential solution you’re considering.
This article talks about what structured decision-making is all about and how it can make a difference in running your business more efficiently. I will highlight some of the benefits attached to it, as well as some risks you might need to watch out for when taking this route. I’ll also provide some tips on how to introduce structured decision-making frameworks to your team, as well as some insights on how each of these could benefit your business.
The Most Effective Decision-Making Method for Small Groups
A structured, trackable method is the most effective and reliable approach to making the right choices for small businesses. You need to have set guidelines and rules because, without structure, you essentially won’t have an established course of action or technique to work with. It would seem as if you’re merely throwing caution to the wind and hoping that things turn out favorably for your team.
With structured decisions, also known as programmed decisions, for as long as the necessary information is accurately provided, the decision-making process is virtually repeated for as long as it is relevant and productive. The clearly-defined and consistently-applied parameters are revisited each time decisions need to be made.
With this heuristic approach — heuristics being mental shortcuts or rules of thumb for simplifying problems — for making decisions, you’re provided a quicker way to analyze the situation and make decisions to efficiently achieve the desired results.
Repetitive tasks within the organization are ideal for this strategy, such as:
- Inventory checks. Once your inventory reaches a predetermined threshold, you’ll instantly know that it’s time for reorders.
- Recruitment. Certain parameters and criteria can be established to efficiently narrow down the list of promising candidates for specific positions.
Misconceptions on Structured Decision-Making
Some leaders may think that a structured decision-making process will restrict their options and hold them back from making sound, relevant, and effective decisions for the business. Others fear that it may limit their power and authority as the head decision-makers in the organization.
However, structured decision-making isn’t simply about having rigid approaches to providing solutions to various issues. Rather, it’s about having established concepts, rules, and goals that allow you to assess the situation, analyze risks, and come up with the most logical decisions.
Impact of Having a Structured Decision-Making System
A structured decision-making technique for your business can help make certain processes more transparent and efficient. A unique system perfectly designed for your organization’s specific needs will make a significant difference in how much quicker and more competently you’re able to respond to a variety of workplace concerns.
Here are the pros and cons of adopting a structured decision-making method for your organization:
Pros
- Saves time
- Exposure to the best practices in decision-making
- Provides a clear road map for the business
- Provides a concise audit trail — a detailed record of transactions and data over a specified period
- Timely decisions
- Relevant decisions
- Provides a systematic approach to dealing with specific and recurring workplace issues
- Improved transparency and efficiency in the decision-making process
Cons
- Availability heuristic. This is when you assume that something that previously occurred, even though it happened just once, will most likely happen again. This may lead to flawed decisions because choices are based on inferior and unreliable information.
- Optimism bias. This is a risk your company might face if you tend to be overly optimistic when drafting plans of action and predicting outcomes. Poor decisions may emerge from this mindset because choices aren’t based on accurate data.
- Anchoring Effect. This happens when you rely too heavily on information previously gathered and base your subsequent decisions on them.
Examples of Structured Decision-Making
Injecting some structure into your business’ decision-making process isn’t a one-size-fits-all kind of deal. What could work wonders for one business could potentially be disastrous to yours. You must design your approach to your organization’s unique needs and expectations to maximize the results.
The goal is to choose or design a well-structured decision-making strategy especially for your organization, something you can always lean on in various circumstances. This is a great way to effectively evaluate results and implement changes whenever you deem them necessary.
Here are some examples of structured decision-making strategies that have worked for other businesses:
1. Decision Tree
A decision tree is a tree-like map that displays a series of potential choices and their costs, benefits, ramifications, and possible outcomes. It offers you a visual representation of your available alternatives so you can better analyze, evaluate, weigh pros and cons, compare, and select the best possible courses of action for your business.
Decision trees are great for simulating different scenarios so you can clearly see the bigger picture. The steps involved are pretty simple:
- Identify the problem or the decision that needs to be made.
- Draw possible solutions.
- Expand the tree by adding variables related to each “branch” or solution, such as costs, benefits, and consequences.
- Continue expanding until you’ve exhausted all possible choices and potential outcomes for each alternative solution.
You can do all these by hand, using good old pen and paper or a whiteboard and marker. You can also invest in decision intelligence software like Cloverpop. Its easy-to-use, drag-and-drop feature allows you to simplify decision-making and gives you a bird’s-eye view of critical scenarios involving business decisions.
2. Influence Diagram
An influence diagram is similar to a decision tree since it maps out possible solutions and potential outcomes. It also allows you the chance to step back and see the bigger picture. However, unlike a decision tree, it isn’t as detailed.
Influence diagrams are great for simpler decision-making, such as on-the-spot illustrations during group decision-making discussions or when you need to give your team a general overview of where the business is at and where you want to take it.
3. A Tailor-Fitted Decision-Making Framework
Your company’s own decision-making framework would be extremely beneficial, especially for small businesses still trying to firmly establish themselves in the industry. A tailor-fitted approach to decision-making designed to meet your team’s specific needs will do wonders with how much more accurately you’ll be able to achieve your goals.
We, at Sancus Leadership, can help you do just that — design a framework unique to your organization that takes into account your distinctive dynamics, profile, circumstances, and objectives. Schedule a demo with us so you can start to make better use of your time, avoid costly mistakes, and focus more on growing your business through an optimized decision-making framework.
Key Takeaways
A structured, trackable decision-making method is a smart way to simplify, improve, and maximize decision-making processes for your business, especially for recurring decisions that take away precious time from other issues that matter more.
You can go the old-school route by turning to pen and paper for mapping out solutions and potential outcomes with your group through decision trees or influence diagrams. You could also invest in decision intelligence to make your decision-making processes more streamlined. More notably, you can design a unique decision-making framework for your business, one that is customized to your distinct needs.
