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Business leaders and owners constantly have to make decisions in their lives and for their company. Decisions made on the business side can have impacts on the private life and vice-versa.
As human beings, we put in place our own tactics to help us in our decision-making and we build our own process to improve our ability to make better decisions. At the level of business leaders, the consequences of poor decisions or lack of decisions can go very far.
Moreover, when business problems become significant enough, it is usually because they have not been solved when they were still controllable. This is often the consequence of several missed opportunities to make “small” decisions.
I have identified 6 bad decision-making habits that can affect any business and I list them below. As a business owner myself, I am not afraid to say that this article reflects some of the mistakes that I’ve made.
1. Seek consensus in the decision
There is often confusion between participative management (or participatory) and seeking consensus when making important decisions in companies. Participative management is about empowering employees to voice their ideas.
Often, the problems that arise from decision-making do not stem from a lack of consensus, it is primarily because of poor communication.
2. Ask the opinion of collaborators who are too close to you
When it comes to key decisions for the company, business leaders will often seek the opinion of close collaborators (often within the company) with whom they have a strong relationship. At first glance, it is indeed relevant to ask several people for advice when it comes to making strategic decisions.
However, when the relationship between people is too strong, the quality of the relationship is likely to interfere with employees’ ability to challenge directions and decisions.
To increase the quality of feedback during a decision-making process, it is better to turn to people who can shed a different light on the issue and who are not in a position to prevent them from challenging your vision.
3. Let fear guide decisions
Often, decisions that are made in a context of fear lead to the status quo. Typical fears when making decisions are :
- Employees will leave the company,
- Managers will be dissatisfied,
- Employees won’t accept to change
However, decisions that can make everyone happy are rarely the best for the organization. Fear should never interfere with the decisions that business leaders need to make. As a business owner, you have been brave enough to build your business, therefore you need to be courageous in your decisions and have the sole objective of doing what is right for the organization.
4. Starting with preconceived ideas
It is detrimental to decision-making to leave with a predetermined idea of how to address a problem or situation. First of all, the problem or objectives, as well as the parameters and expectations for dealing with the situation, must be clearly stated.
Remaining as open and agnostic as possible about how to resolve the situation is a key to effective decision-making.
5. Thinking that money can solve all problems
Investing money in a solution to solve a business problem is often considered THE solution. If the problem is large enough for the owner or president to be involved in the decision for the solution, it also means that they must be personally involved to ensure that the objective is achieved.
Simply throwing money at the problem and thinking it will solve it is a bad way to approach decision-making. Moreover, this vision will often lead to the choice of a supplier or partner on the wrong criteria.
6. Waiting too long to act
In an overloaded daily life, entrepreneurs are guilty of waiting too long before taking action on the challenges they face. I systematically recommend business leaders and sales leaders I work with to get into the habit of asking for help as soon as a situation cannot be addressed immediately with a well thought plan.
I am regularly dealing with business leaders who have waited too long to make decisions about their sales force because they did not know how to deal with the problem.
This happens because there is a lack of objective data on what is not working in the sales force, and it is for this reason that companies will conduct a full sales force analysis.
When business owners have the results of their sales organization analysis, they know exactly what’s working well and what’s not. That’s the easiest way to get started, and work on issues that impact the bottom line directly.