Business owners: How do you make decisions?
Have you ever considered the process your mind goes through when you make decisions about your business? Being a business owner can be tough. There are lots of decisions to make. It can be a lonely place, and the stakes are high if you take a wrong turn. Business owners tend to consider a combination of three elements when choosing which direction to take. One of these elements may be a higher priority, depending on the type of business, the circumstances and also the personality and goals of the person making the choice. The main elements to the decision making process are:
Human - what’s your approach regarding your own needs, your customers, staff and other stakeholders?
Data - how does your financial and other information available to you affect your next steps?
Strategy - What’s your long term goal for the business? Is it growth, branching out into new markets, reducing costs, or becoming net zero? What steps do you need to take to get there? What advertising, communications and marketing will you need to ensure your stakeholders understand what your business is all about?
How well do you balance Human, Data and Strategy when making decisions? Photo Tachina Lee Unsplash
First and foremost business owners need to understand their own strengths and weaknesses. Which of the three decision making elements you choose to focus on most will be driven by your own strengths, your value system, your background and skills - in other words, which approach feels easiest, most comfortable and most important to you?
Your priorities may be to chase as many sales leads as possible, work on developing yourself to become a better business owner, or to concentrate all your efforts on marketing your business. As humans we all tend to focus on whichever feels most natural to us, so this will have a big influence on your approach. Several elements come into play, including;
Pragmatism - what approach seems to be most sensible, realistic and achievable?
Creativity - how creative is your approach? Are you a creative person by nature who likes to try new things, or do you tend to stick to tried and tested models that have already proven to serve others well?
Ethics - is the approach you are considering ethical, or does it put others at any disadvantage or risk?
Values - does the approach fit with your own values and beliefs system or is it at odds with this?
As a business owner the buck stops with you. As I always tell my clients, your role as a leader is to resolve a suite of dilemmas ethically and creatively.
How mentally strong and agile are you? Photo Casey Horner Unsplash
And finally, I couldn’t possibly cover decision making without mentioning someone I admire enormously - Louis S Csoka PhD, an eminent psychologist and expert in helping people make good decisions in a VUCA world, when the implications of making the wrong decision could be catastrophic. He says the difference between people who make good decisions under pressure and people who don’t is mental strength. He is the author of “When the pressure’s on: the secret to winning when you can’t afford to lose” which is a great book and one I’d definitely recommend to anyone who runs their own business, or leads a team.
In his VUCA Leadership White Paper, Csoka says; “In a “new world” environment, decisions are really dilemmas to be addressed, not problems to be solved. Such dilemmas require a different level of judgment and intuition because they are more difficult to resolve, more difficult to communicate, more difficult to reverse, take longer to implement and are filled with ethical implications. Leadership in this environment is further complicated not only by the rate of change but by uncertainty about what the effects of even known change are likely to be.”
In this VUCA world then, learning how to have the resilience to make good decisions under pressure could be the key to success or failure of your business.
If you are a business owner who is struggling with decision making, why not get in touch? I may be able to help.