How Do You Make Decisions?

“An executive is a man who decides. Sometimes he decides right. But he always decides.” – John Patterson.

To me, decision making is the absolute essence of business. Nothing else involves so much risk and courage. Business is the same, it is all about taking risks, it is really only for the courageous and certainly without making decisions you can’t make it there.

Yet it always makes me wonder then how many business people avoid making decisions at all cost. It is the most evident at a startup stage of the business but even at a later stage of the company’s development some decisions are not made simply because there is no one brave enough to make them.

Memos and files circulate the company and everyone knows that one day a decision will has to be made, yet out of pure fear no one dares to make it.

Here’s the harsh truth about business: in order to survive you have to be a decision maker BUT you don’t have to be crazy!

You can make calculated decisions which greatly limit the risk you take. Most of us don’t realize that. To many of us a decision pretty much equals a potential failure and being a laughing stock of the whole company, industry or wherever else.

What we don’t realize though is that most decisions we have made to date ended as failures, yet no one laughed. They were small things, no one even noticed. Sure you bought a broken used car or piece of electronics. Sure you took the wrong turn and ended up 30 minutes late for work but so what? The world hasn’t stopped turning and most likely never will for such a small reason (if you blew up half of the planet by mistake though, well, that’s a completely different matter)

In this post, I wanted to share with you a simple system I use to make decisions. It’s based on John Pattersons’ famous Pyramid and allows me to calculate the risk associated with the decision I have to make.

The Pyramid Decision Making Process

The centre of the Pyramid represents me, where I am now and the people around me (coworkers, colleagues, friends or family – depending what kind of decision I am trying to make). I will come back to this part later.

The apex of the pyramid is the decision I am trying to make, or the objective that needs to be reached.

The remaining two sections represent two aspects of a decision, the “yes” and “no”.

I start by placing my objective at the top of the pyramid, then I move to the yes and no. Under yes I list key possibilities that this decision could bring me as well as key benefits to me. I try to limit both to 3 however if there are more, naturally I will put them in.

Under no part I list all the key risks associated with the decision and key obstacles that might prevent it from happening. Again, I try to limit them to 3 but if I can think of more, I add them in.

In the center (the “me” part) I write down how I think making this decision will affect my life and the lives of the people around me and I answer a simple question, would they agree to this decision if I asked them?

Once done, this graph gives me a good representation of all pros and cons of the decision as well as how it will affect me.

Depending on the decision I would then add strength to everything I listed under yes and no to see which one prevails.

Of course, this graph will not make the decision for me. However, it is a good system I developed which allows me to look at the problem objectively and analyze all pros and cons. And believe me, with data like that, making decisions and taking risks becomes much easier.

What are the biggest business decisions you have made using this system?

Well, out of the most recent ones:

  • to leave a company I built from scratch, losing my primary source of income for some time. Sure it affected some people, some in a negative way too. I weighed all options and decided it’s the best thing for me to do.
  • to start a new business, working in a completely new industry and thus beginning anew again.
  • to try and gather business freshmen to help them survive the first year in business.
  • to give up email and phone as means of communication, or time-wasting (yes, I hardly ever use them anymore but that’s not something for this post)
  • and few personal ones that I don’t really want to discuss on this blog

Most of them are life-changing decisions and all carry a certain level of risk (from losing my income to losing my house to my reputation and more) but I don’t care. I did my calculations and even if I fail at all of those things I will still be OK. And the best thing is, I know this for a fact now.

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