Decision making. We all have to do it – day in, day out.
When it comes to our business, we can find it difficult to make the right decision for fear of making the wrong one.
You may have heard through the online world that making fast decisions is the trait of successful entrepreneurs. This is very true, but there are several elements to consider with your decisions – so I have outlined four different things for you to think about.
1. Real time information
Katherine Eisenhardt – a leading expert in strategy and the tech heavy industry – suggests that fast decision making leads to success.
Online businesses are very similar to tech industries in the fact that they are in constant change and flux, adapting to the needs of the market as and when.
One of the elements that Eisenhardt reveals from her research into decision making is that ‘fast companies’ make use of real time information.
So one thing to consider when you are faced with your decisions is – do you have the most up to date information on which to base your decision? How can you access real time information to better inform your decision?
2. Consider many options
Another aspect of Eisenhardt’s research is that ‘fast companies’ consider many options at once. So if your decision is based on whether you do this thing or that thing, instead perhaps think out of the box and see if there are any more options available to you to consider?
Making decisions based on two options can put you in a tough place because it’s primarily a black or white decision, when in fact there are many shades of grey, IF you can expand your thinking and consider several options.
The way forward may become clearer if you have more options to consider – and in fact you might even find you can amalgamate two or three options to get better results than just one option.
3. Opportunity cost
When you are deciding on several options that directly relate to money making activities within your business, it’s useful to consider the revenue that will be generated by each one.
The difference between the cost of each decision, if you take one over another, is the opportunity cost – the cost to your business by not taking that opportunity.
Yet opportunity cost does not always relate to monetary transactions. Missed opportunities of collaborations, networks, and exchanges of good will can all count as opportunity costs, as well as the indirect costs to you as a person like missing out on a valuable experience, or a chance to do something great that will serve your soul.
So have a think about what you will be giving up to make a particular decision. Are you happy releasing that and letting go?
4. Sunk cost
Often we can find it difficult letting go of something that has already cost us something.
You may find yourself in a position where you need to make a decision about going in a different direction – even though you have invested a lot of energy, time or money into a project or previous decision.
Letting go of something like this is known as a sunk cost. You are sinking the cost and allowing yourself to move on to new pastures. Often, the idea of letting go of something which we have invested so much can be very scary. You may have thoughts about it being such a waste, but then this feeds back into opportunity costs.
What opportunities are you leaving on the table if you continue down this route because of fear of the sunk cost?
An example here is when I decided to leave my acting career. I had invested a lot of money and over twelve years of my life to acting. I found myself in a situation where it was no longer making me happy and also preventing me from moving forward to other things. However, it took me a long time to let go of it because I felt so attached to what I had already invested in that career.
To read more about this, check out my guest post on Tiny Buddha.
The best indicator of all
The above points are great strategies for helping you decide what to do. However, the best indicator of all is to go with your gut instinct.
This instinct is your intuition. It is based on your heart’s desires.
Sometimes our gut reaction can be overshadowed by negative thoughts of worry, anxiety or fear that are based on past experiences or beliefs that you have bought into.
Being able to recognise whether that gut reaction to a decision is fear based or excitement is a tool that you hone over time. It’s the same kind of feeling – those butterflies in your stomach – it’s just the way you respond that tells you what it is. If you feel an expansion from the feeling, it’s excitement. If you feel a contraction, it’s usually fear.
Catching that gut reaction the moment you feel it, testing where it’s coming from and then looking at the four points above (if relevant) will give you a good sense of what is the best decision to make.
Just make a decision already!
Even though it is useful to consider all of the above when making that decision, I have found that just making a decision – any decision – is better than keeping yourself stuck in a cycle of wondering what to do.
Procrastinating on decisions is borne from fear – fear of the unknown; fear of getting it wrong and failing.
But ask yourself this – if you couldn’t fail (and in reality this IS the case, since every perceived failure is a learning experience and part of the journey towards our vision) what would your decision be?
And remember, the longer you take to make a decision the longer it is before you see results.
Let me explain.
Imagine that somewhere in the Universe there is a set of rules that says you have to go through ten steps, decisions or even failures before you get to the end goal in this one scenario that you are contemplating. If you could make all those decisions quickly your journey to the end goal would be shorter than if you spend ages on each one.
So tell me, what decisions have you been putting off?
What are you now going to do to start taking action?
Let me know in the comments below.