How to Make Decisions
This "vanilla" version of a complex procedure is for the small business manager with limited resources. Each
section of this basic format has been explained in more detail in the items that follow on this web page. Refer to the Recommendation
section for tips on how to use these guides.
The word, problem, is used here in a general sense. Other terms such as challenge, opportunity, threat may
be more appropriate in some situations.
While it may seem unnecessary, it is critical to the final decision because as you proceed you may find you
have more than one problem, a different problem than first thought, a more complex situation or aspects that are complicated
by other factors.
While this section appears at the beginning of your document it may be revised as you proceed until you finally
arrive at a clear definition.
For more details see Problem Definition.
This section provides the historical information that is pertinent to the making of the decision.
It is included whenever some decision-makers are not completely familiar with preceding or existing conditions
relevant to the decision.
Items in this section may generate more ideas for the other sections. For this reason alone it should not
For more details see Background.
In this section you are describing the current situation and the information you have gathered. The quality
of your final decision depends, in a large part, upon the information gathered and how it has been analyzed.
Thorough thought applied to this section stimulates alternative ideas in the following section.
This will help clarify the problem definition if that is proving a challenge.
For more details see Situation Description.
- Quantity and quality are the keys. Diligence yields surprising dividends.
- The more alternatives from which to decide - the better the quality of the final solution. [Refer to the
story accompanying the maxim, 80% of a Decision is Information.
- Revisit this section on more than one occasion. Involve as many minds as possible.
- Brainstorming is effective if you allow the freedom to name as many possibles without judging or evaluating
until the flow of ideas has ceased.
- Include combinations of separate solutions.
- For each alternative, list the advantages and disadvantage or other evaluative methods.
- Always include the important Do Nothing alternative.
For more details see Listing Alternative Solutions for a Decision Analysis.
- This is the final decision.
- Include as much rationale as is required to convince yourself or others.
- A fall back solution may be appropriate.
For more details see Recommendation.
The scope of your document will, of course, depend on the importance of the decision. When this format is
followed often, the discipline can be followed in your mind for quick on-the-spot decisions. If a manager is not endowed with
a high level of intelligence, good decision-making will make him/her appear smart. Of all the management skills, decision
analysis is the one that is most handsomely rewarded.
Decision Analysis Sections