Decision-making in business

May 26, 2010

I’m a big believer in having minimal layers in business. It helps to eliminate “red tape” and ensures operations run smoothly. Too many layers tend to slow down decision-making and decrease efficiency.

If you need group meetings to make every decision, you should re-think your business plan. Meetings should be for information gathering rather than decision making. You gather 75 to 80 percent of the information from a meeting or sources, and the rest is strong business intuition. Think Lee IaCocca or Jack Welch, guys that made intelligent decisions based on a combination of information and intuition. Consider some of these great IaCocca quotes.

Ideas for discovery, change and improved efficiencies should come from the bottom up. Decisions regarding compensation, benefits and major structural changes in an organization and the like are made at the top and distributed throughout the organization.

A good decision-maker has great instincts, can cut through the noise and not get distracted. They understand the weight of a decision and its short and long term implications; appreciates the potential unintended consequences of any significant decision; and appreciate the fact-finding and information-gathering process. They also take into account the “top-10 percent influence”, which tells us decisions involving PR, crisis management and financial issues should be made at the very top, by a competent CEO. But don’t underestimate basic common sense and good judgment.  They’re the foundation of any good decision maker.

How do you and your company make decisions? Does the process work, or do you need to reevaluate processes and outcomes?