7 Steps to Effective Decision-Making

The quality of your decisions determines the success of your business. With the right decision-making steps, you’ll arrive at meticulously logic-driven decisions every time.

Updated September 1, 2020

Decision-making exists in every phase of the project management process. From setting a project timeline to creating a project management plan and choosing the right project management software, the quality of your decisions determines your project's success.

And together, the success of your projects determines the success of your business.

Following a set process to make decisions ensures that logic, not emotions or gut reactions, will drive every important choice you make. With the right decision-making steps, you’ll arrive at meticulously logical decisions every time.


1. Define the question or problem

First, identify the question or problem you’re trying to solve. Clearly define the issue and the decision so that you and all stakeholders are on the same page. An unclear problem leads to an ineffective solution.

To ensure clarity, it’s helpful to state the question in terms of the outcome your decision will serve. For instance, the question might be “how to best recoup losses from canceling our 2020 events” or “how to best price a new product for maximum profit.”

The word “best” reminds you that no decision is perfect, but you’re looking for the optimal choice for your business.

At this stage, consider setting a timeline for the decision to avoid long-term wavering or hesitation.


2. Assign roles and responsibilities

When you’re making a decision as a team, it can sometimes feel like you have too many cooks in the kitchen. The DACI model addresses this problem by assigning specific roles and responsibilities to each team member. DACI stands for:

  • Driver: The project leader or project manager who drives the decision. This person may lead meetings, assign tasks, and track progress. They are responsible for project cycle management.
  • Approver: The Approver is the ultimate decision-maker. They have the final say. Although you may have more than one Approver, limiting the number speeds up the process.
  • Contributors: Contributors provide work or knowledge that contributes to the decision.
  • Informed: These are people who need to be kept in the loop, but aren’t necessarily involved in the decision-making process.

Sometimes, one person may occupy multiple roles. You may also step into different roles when it comes to different decisions, depending on your area of expertise. The point is to define who’s doing what upfront, improving your team’s efficiency.


3. Determine decision criteria

Now, you have a clearly defined question and a well-organized team. But before you can choose how to “best” do anything, you need to determine what “best” means in the context of your decision.

Do you need to prioritize quality, cost, time, ease of implementation, risk levels, increase in customer satisfaction, or other factors? For instance, if you’re aiming to recoup losses from canceling your 2020 events, both cost and time are vital considerations.

Quality is always nice, but you’re looking to recover substantial lost profit as quickly as possible.

Stakeholders should agree on the key considerations, which may require some negotiation. You’ll use these criteria to weigh your options and make a decision that best aligns with your desired outcome. Without criteria to guide you, you may choose an exciting or interesting option that fails to meet your most essential needs.


4. Identify your options

With your criteria in mind, you must collect relevant data and information, then identify your options. For each option, gather facts like cost, timeline, implementation steps, and potential risks. These facts help you and your team make an informed decision.

During this stage, don’t shy away from creativity and thinking outside the box. It’s not time to evaluate your options or make a decision yet. Simply gather all possible alternatives. The best decision may even be a combination of several ideas.

Of course, too many ideas can lead to decision paralysis or the fear of choosing wrong. Remember to stick to the timeline you set in Step 1. Consider your criteria to narrow down your list if it becomes overwhelming.


5. Evaluate your options

After you and your team bring various alternatives to the table, you need to evaluate each option carefully. Use metrics and tools such as decision matrices and SWOT analysis. SWOT stands for strengths, weaknesses, opportunities, and threats.

Think through what each option might look like for your team, organization, and customers. How might each scenario play out? What risks or obstacles might you encounter?

As you work through this process, an option or two that most closely aligns with your goals should rise to the top. Rank your options and discuss them with stakeholders.


6. Decide and implement

Finally, you’re ready to make a decision. Inform everyone who is affected of your choice, and document the decision and the criteria around it. List the other alternatives you considered; you may need them again later.

Keeping track of your decisions helps you continuously analyze what went well and where you can improve, sharpening your decision-making skills with time.

Then, begin the necessary planning, gathering of materials and personnel, and any additional steps needed to implement your decision.


7. Reevaluate

Project monitoring is one of the most essential project management steps, and it doesn’t end after you’ve made a decision. Track your progress and outcomes to determine whether the decision achieved your desired results and benefits.

If not, where do you think you went wrong? Which step in the process can you improve next time? Would one of your alternatives have been a better choice, and why?

In some cases, if you notice early on that the project isn’t going well, you can change course and try one of your backup alternatives. In areas like marketing, it’s never too late to go back to your options and try a different course of action next time.

Either way, the best decision-makers consistently evaluate their choices, learn from their mistakes, and work to improve their skills.


Make solid decisions with a proven process

Decisions are rarely easy, and never perfect. But using a proven process helps eliminate some of the confusion, miscommunication, emotion, and bias that often contribute to poor decisions. It also makes it easier to pinpoint where errors occurred and what you can improve on in the future.

By following these steps and honing your decision-making skills, you’ll learn to make logical decisions that drive your business's success.

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