Decision-making is a process where we need to understand our needs, principles, and targets. For example, if you want to buy a house, you will get all types of information, such as different options, the interest rate on the loan, and many more from the internet. But the internet would not know why you are buying the house, when do you intend to shift, what impact will the purchase have on your budget. Some information is beyond the reach and understanding of decision-making algorithms. There are different factors that harm our decision-making ability. This Transformation Tuesday, let us look at the most common decision-making myths:
Many of us think efficiency means making the decision right in. But that is not the case. To be truly effective, we need to have a clear understanding of the problem. Rushing in to make the decision is based on the wrong factors. For example, walking into the showroom and buying the first refrigerator the salesperson has to sell is not an effective decision. It might be the case that the salesperson wanted to get rid of that piece of a refrigerator. It might not be the one that best suits your needs and budget.
We cannot say that we do not have time to give to a particular decision. Running into a decision without proper research is not the right decision. We need to give quality time to any decision. For example, if we research well on the available options and then conclude, then it will save time in decision making.
3. Rush into Decision
This is not the right way to make a decision. A narrow focus on the problem may solve the wrong problem. For example, if your car breaks down on the road, you go and buy a new car. This means you did not understand the problem well and you rushed into the wrong decision.
4. Alone in the decision
It is important to include all the stakeholders in the decision. For example, if you were to buy a car and you buy a manual car. None in the house can drive a manual car. So what is the use of buying a manual car when no one in the house can drive it in case of emergency. So involve all the stakeholders in the decision-making to make the best decision.
5. Gut feeling
For larger and bigger risk decisions we should not rely on our gut feeling. Gut feeling is based on our bias and memory. Important decisions benefit from open intellectual discussion with all the stakeholders involved.
6. 360-degree process
Decision-making is not a linear process. It should be a circular 360-degree process, where we seek feedback to assemble information and evaluate our decision. For example, if you have to buy a refrigerator, then doing your research first and then going and negotiating the price with the dealer is not enough. Since there are a number of dealers and each of them would have a different margin to negotiate, so going around and comparing offers will get you a better deal.
The next time when you are in a hurry to make a decision, pause for some time, think about all the myths discussed above, and improve your decision-making skills.
Always remember a quote by Charles Duhigg – “Between calculated risk and reckless decision-making lies the dividing line between profit and loss.”
Written & Compiled by Faber Mayuri