People - Top Tips - Decision making

Decision making

This document is designed as a quick reference guide to decision making.

This will enable you to gain knowledge of a particular skill, task or process.

This means you can quickly find the key information that you need and refer to it on an ongoing basis whenever you need to refresh your knowledge.

 

Introduction

Good decision making is a key part of being an effective leader. If you can make timely and well considered decisions this will often lead to success in your business.

There are a number of decision making techniques that you can apply to help you identify the best course of action to take based on the information available to you. This document will describe a few of the techniques that are relevant to the decisions you are expected to make.

People - Top Tips - Decision making

What you need to know

Not all of the many thousands of decisions we make each day are conscious. The majority are subconscious, or unconscious whereby we make the decision in an instant almost without realising that we’ve done it – ‘by instinct’ - such as when we perform routine tasks, or analyse information when driving. We see this especially in an emergency, when there is no time to make a conscious decision. Experience counts; we may have faced a similar situation before and made a right or wrong decision, which we have mentally reviewed and stored until next time. In time, decisions made consciously become automatic.

Some of the decisions you will need to make are more major, such as when a store refit or product launch is planned. At this level, major decision-making borders on project management, and where this is the case the following techniques may be useful…

 

Pareto Analysis

This technique is useful when there are many courses of action / tasks competing for your attention and you need decide which one to deal with first that will deliver the biggest benefit to your business.

To apply this technique follow the steps below:

 

1.   Make a list of all the tasks / actions you could take. If you have a long list group it into related categories

2.   Give each item / group on the list a score. The scoring method depends on the situation you are working in, e.g. if you are working to improve profitability you would score each item according to the impact it could have or profit it could deliver.

3.   The item with the highest score will be the action that will deliver greatest business benefit if implemented successfully and these are the things you should tackle first

4.   The items that score the lowest, may not even be worth bothering when you consider the time / money you need to invest and the result it will achieve

People - Top Tips - Decision making

What you need to know

Plus/Minus/Interesting (PMI)

You can use this tool to check that a course of action you have chosen is going to improve this situation or if it would be better to do something else or indeed do nothing.

 

To apply this technique follow the steps below:

 

1.   Draw three columns on sheet a paper, head one column ‘plus’, one column ‘minus’ and the third column ‘interesting’.

2.   In the plus column write down all the positive results of taking the action

3.   In the minus column write down all the negative impacts the action could have

4.   In the interesting column write down the implications and possible outcomes of taking the action, whether positive, negative or uncertain

5.   This might be enough for you decide whether to continue with this action. If not then consider everything on your list and give each point positive or negative score. The more positive the items in your plus column the higher the score and vice versa. By this point your PMI should look something like this:

Decision: should I invest payroll in part time colleagues?

Plus

Minus

Interesting

Š        More ‘heads’ on shop floor (+5)

Š        Flexibility – covering holidays etc. (+5)

Š        Non premium rate overtime to flex up (+2)

 

Š        Takes longer to train and develop (-3)

 

Š        Different personalities in the team? (+1)

Š        Reliability? (-1)

 

1.   Add up all the scores, a strongly positive score shows the action should be taken and a strongly negative score shows it shouldn’t be taken

People - Top Tips - Decision making

What you need to know

Force Field Analysis

This is useful to represent the forces acting for and against an action that could help or hinder its implementation. Carrying out this level of analysis enables you to plan to strengthen the forces that can support your decision and reduce the forces that could hinder it.

 

The diagram below is an example of what a force field analysis might look like:

 

 

The vertical line represents the situation, you, you might decide to use a box instead of a line and write your decision in the box. The arrows on the left represent the enablers, the forces helping the decision and on the other side the resistors represent the forces that oppose the decision.

On each arrow you should write a description of the force that is either enabling or resisting. If you choose you can make the arrows wider or longer to represent when a force is stronger or weaker in relation to other forces.

Having carried out the analysis you can decide if a course of action is viable.

Where you have already decided to carry out a project this analysis can help you work out how to improve the chances of success by removing resistors or reducing their strength and/or increasing the force of enablers.

People - Top Tips - Decision making

What you need to know

Cost / Benefit Analysis

You may think you have considered all the solutions available and decided on which is the best one to use, however this solution still might not be worth implementing if you need to invest a lot of time and money in it.

Cost benefit analysis is a simply technique for working out if a solution is financially viable. All you have to do is add up the value of the benefits to be gained and minus the associated costs.

Costs can be one off or ongoing and benefits are not often instantaneous so when using cost benefit analysis we can build this in by working out how long it will take for the benefits of an action to repay its costs.

In its simplest form cost benefit analysis only takes into account financial costs and benefits. A more comprehensive approach considers other factors such as environmental impact for example and places a financial value on these. This can be quite subjective but may be worth doing depending on the project.

 

Step by Step

The process of making a conscious decision can be broken down as follows:

 

1.   Define the issue - what exactly is the problem? At this point you may want to use one or more of the techniques for analysing the problem, to ensure that you are actually addressing the right cause, and not just a symptom or subsidiary problem. These techniques are fully explained in ‘Have a look at problem analysis’

2.    

3.   Clarify the aims - what do you want to happen?

 

1.   Identify any stakeholders - people who have an interest in the outcome include:

     Store staff

     Regional management

     Head office departments

     Customers

     Local community

There may be others, depending on the issue, and you should take their opinions and thoughts into account at this stage.

 

1.   Investigate the issue - involve all relevant parties and sources of information.

2.    

1.      Generate options - the more, the better - techniques to help here include:

     Brainstorming

     Mind Mapping

     PSTB

1.   Evaluate the options and select the best one - the techniques outlined in this document will help you to do this