‘Problems, decisions and risks, oh my’

How to make good decisions, according to Neil Bradbrook

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Some recent high-profile bad decisions show us that we haven’t learned the lessons of history, and keep making bad decisions despite being surrounded by examples of how things can go terribly wrong. Examples include Raith Rovers’ signing of David Goodwillie, or West Ham choosing to play Kurt Zouma after the infamous viral cat video.

However, there are five tried and tested steps towards good decision making, which should be ingrained in your thinking processes:

Step 1 – Be clear on the problem you are trying to solve.
Too often people jump to solutions when they haven’t correctly articulated the problem. Einstein said, “If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.”

Step 2 – Agree your decision-making process.
West Ham’s decision to select Kurt Zouma seemed to be left to manager David Moyes, citing “footballing reasons”. His responsibility is football, so of course he made a footballing decision. But the impact of the decision was much bigger and it shouldn’t have been left to the manager to decide; the directors should have stepped in.

Make sure the right people are involved in decision-making and that it is clear who carries the can if it goes wrong.

Consider also how the decision will be made. You need to get facts and evidence – see point 3 – but agree up front what would make you decide “yes”, or “no”. Then stick to it.

Step 3 – Get factual evidence and test the solution if you can.
As noted, be careful with your facts. Often we have a solution in mind and select or bend the facts to support the answer we want. Be objective – and if you cannot be, seek help from a trusted third party who is not emotionally invested.

If you are able to test the solution, listen to the results and, unlike all too many candidates in “The Apprentice”, don’t dismiss them out of hand because they suggest you are wrong.

Step 4 – Consider “What ifs?”
The phrase “blind optimism” exists for a reason. Imagine it goes wrong, really wrong. Imagine the worst thing happened – what would that be, and what would be the impact on your organisation? Then consider how likely that is to happen, and if there are any mitigating steps you could take. This is a definition of classic risk management.

If Raith Rovers had considered this, they could not have proceeded. The risk would have been too great.

Step 5 – Be prepared to hold over the decision if you don’t have sufficient information, but don’t hold forever.
Sometimes there is a piece missing from the puzzle. There is a fact that you don’t have or you need to wait on something to happen. If you cannot get the information, then ask if it is the right question or what other information you can get. What are the risks if you were to proceed anyway?

Don’t use this as an excuse to make no decision – business is all about making decisions and this means taking risks. But they should be calculated risks. If risks are manageable then make a call, and if you get it wrong, fix it.

But if risks are too big – and it was a near existential risk for Raith Rovers – the bravest decision can also be “No”.