Decision making. It’s the bread and butter of managers and executives, who make about three billion decisions each year. Indeed, Bain & Company research found that decision effectiveness is 95 percent correlated with financial performance, while the UK Institute for Employment Studies found that decision making underlies 50 percent of employee engagement.
Unfortunately, decision practices at most organizations are sub-par. Our study of over 500 managers and executives found that they fail to apply effective decision practices 98% of the time.
If decision practices are so important, why are our decision practices stuck in the dark ages? Behavioral science has the answer.
It turns out that a mix of cognitive biases, busy days, relentless changes and limited attention spans underlie our insidious bad habits and keep us from following effective decision practices. We think we are great decision makers. And since we rarely write our decisions down and check them later, it’s easy to convince ourselves that we’re right.
We’re not right. But we can change.
Using Better Decision Practices To Defeat Bad Habits
We can drive better, faster decision practices by using research-based insights to create new habits.
Consider this: In a three-month study of 100 managers, those who made decisions using best practices achieved expectations 90% of the time, and 40% of them exceeded expectations. Other research has showed that decision-making best practices increase the number of good business decisions sixfold and cut failure rates in half.
Seven Steps to Faster, Better Business Decision Making
The simplest and most effective decision practices are summarized by our popular Harvard Business Review checklist for decision making:
1) Write down five business goals that will be impacted by the decision. Framing the decision around what's most important helps avoid the trap of rationalizing after the fact.
2) Write down at least four realistic alternatives. No other practice improves decisions more than expanding your choices.
3) Write down what you know...and what you don't. It's easy for information right in front of you to distract from more important information that's still missing.
4) Write down what's likely to happen in the future, good and bad. Telling the story of what you expect is a powerful tool to understand and communicate your choices.
5) Involve a team of at least two to six other stakeholders...or up to 12 people if you are using Cloverpop to help automate the process. More perspectives reduce bias and increase buy-in — but bigger groups bog things down without automation.
6) Write down what was decided, why and who was involved. Also include how much the team supports the decision to increase buy-in and set a basis to measure results.
7) Schedule a follow-up to check-in on results. We tend to forget decisions after we make them, missing the opportunity learn from what happens and make corrections if needed.
Spending a few minutes to follow these steps for every business decision saves 10 hours of meeting time and drives better decisions 10 days faster:
Change The Game By Keeping Score
If you follow this approach, not only will your decision effectiveness improve, but as an added bonus, you will have a clear record to track your results.
Despite this, very few of us keep track of the decisions we make. Think of it: we track sales, we track web clicks, we track your Starbucks receipts. But we don’t track the very most important thing we do at work -- the decisions we make.
When it comes to improving decision practices across your organization, keeping score really changes the game. Once decisions are tracked, they become data to be measured. And what gets measured gets managed -- when leaders can see the scoreboard, their competitive instincts motivate them to improve and win.
So check off these steps, start measuring decision practices, and start making them better.
Cloverpop’s mission is to scale this approach across the business world. Built on what we’ve learned from our behavioral science research, Cloverpop is a software solution for tracking, communicating and improving decisions.
With Cloverpop, decision makers quickly frame decisions and invite stakeholders to weigh in using effective decision practices. The decision database tracks critical decision details while decision analytics give insights into the decision making process. Decisions are automatically communicated across the enterprise for better alignment.
The result? Research shows businesses using Cloverpop make 75% better decisions twice as fast with half as many meetings and 20% better overall performance.
For fast ROI, learn more about our Cloverpop solution for improving decision practices. We'll make sure you not only follow the most impactful decision practices, but also give you a quick and effective way to track, communicate and learn from decisions across your entire organization.