Tips for becoming a decision maker or a good decision maker in business
Knowing how to make decisions or become a good decision maker is very important, especially in a business.
Cognitive bias affects every business decision we make. In the business world, people need to make important choices every day. This option must be made without delay and has extensive consequences. How can we ensure that our choices remain rational and objective and free of our cognitive bias potential?
Apparently, there is a system, but it is more a process or habit. New research shows that good managers can overcome bias and easily make effective decisions by following the approach called data-based strategy.
Developing business today is not an easy matter. No matter the industry, most of the organizations will eventually face a crisis because new competitors will appear from nowhere. The current condition of competition forces organizations to develop strategies and act quickly.
Therefore, it’s easy to see why many companies want to make a new strategy to overcome the crisis. Conduct market research, analyze trends, develop models. But this is the wrong approach.
Conversely, the organization must rely on evidence-based strategies and data by turning their attention to a small number of ordinary business activities such as seeking input, managing customer relations, and developing the right people.
Data manager is about focusing on fundamental things. By optimizing the retrieval of information on their operations, the organization can promote these conditions and prepare a wiser and long-term strategy to appear inductively.
Developing data requires different types of thinking. The best executives without stopping paying attention to what they can control. They rely more on measurements, empirical evidence, and fewer use opinions or persuasions.
If you are an executive, your main task is to know the things that drive business performance, to identify fundamental activities. Ask yourself: Does the mastery of this activity contribute significantly to the company’s performance and can these activities be measured and monitored reliably?
Companies may only have a little fundamental activity such as searching input, managing supply chains, or serving customers. Only after isolating the fundamental activity of the company then optimization work can occur.
Most importantly, managers must use any technology and data sources available to collect information about company activities. Evidence-based strategies and data allow companies to systematically focus on the most important things. Increasing fundamental operations leads to success.
Tips for becoming a good decision maker or decision maker
In today’s business world, decisions must be made quickly. If you don’t have a methodology for making decisions in your organization, you will definitely fail.
Therefore, we have accumulated a collection of tips that will help you understand important things in business decision making and make you a great decision maker.
1. Analysis of the situation
First, someone needs to understand the environment or context of decision making. The successful approach includes the classification of people, the situation or process of intentional organizations into the existing framework.
Analyzing the current situation is the starting point for effective decision-making processes. At this stage, you must ask yourself the following questions:
- Why do I need to make a decision?
- What is the effect if there is no decision taken?
- What information drives your decision making?
- What research or analysis should be done?
Detailed answers will help you know what data you have and what else is needed to determine the purpose of decision making.
2. The risk identification that you will take
Familiarity gives birth to comfort. And there is a possibility that you make some bad decisions just because you are familiar with habits, then you don’t think of the danger to be faced or the danger will arise.
For example, you might accelerate travel to work every day. Every time you arrive safely without a ticket, you become a little more comfortable with fast driving. But what is clear, you endanger your safety and take legal risk.
Or maybe you eat fast food for lunch every day. Because you don’t experience signs of poor health, you might not see it as a problem. But over time, you might gain weight or experience other health problems as a consequence.
In business, you can also use the Risk-Reward Ratio Ratio. This ratio is the measurement of your potential risks and rewards. Identify all possible rewards and contrast to all the potential risks.
3. Negotiate your decision options with other stakeholders
Even though persuasion should not affect your decision, it is better to direct your thoughts to group supervision. Explain to your colleagues What data affects your opinion and what evidence can support your next decision.
4. Perform cost-benefit analysis or cost-benefit analysis (CBA)
CBA analysis helps executives identify and compare the strengths and weaknesses of alternatives (costs and income). Here’s how to do CDA analysis:
- Determine costs
- Calculate the benefits
- Compare Alternatives
- Report and plan action
Based on analysis, make recommendations and plan actions
5. Create decisions based on evidence
The purpose of evidence-based management or evidence-based decisions (EBM) is to use scientific evidence when making a decision, not just trust someone’s instincts.
Like most people, you might tend to use your judgment and base your decision on what is common. But the experience you have in other companies or in different circumstances may not apply to the situation that is being faced.
There are a few simple steps that you can do to enter evidence into your decision making.
- Use performance data to support your decision. Get the latest data and as completely as possible.
- Challenge your instincts. Is there objective evidence that supports them?
- When an action is recommended, find out what is basically and whether it is supported by data.
- Determine whether a commonly used business strategy succeeds in situations like you. Will they apply to your special case?
- Check whether the business data that you find is the latest and objective.
Also make sure every business decision that you are planned based on factual data and also relevant to the decisions you will take, for example is your business financial data.
Business Financial Data is a vital data that you must always monitor to ensure the business financial process runs optimally to facilitate all planning in the business.
To present comprehensive reports and financial data, you can use accounting software that has the most complete features such as Accurate Online which will facilitate the process of business accounting and bookkeeping.
7. Be honest with yourself
Before gathering evidence to make a decision, take the time to review your own motivation. Is your mind been made? Do you really collect evidence objectively, or you just want to make sure the idea is?
Being aware of your own motivation can help you stay objective and focus in finding the best solution for your business and making you a good decision maker or decision maker.
Make the best decisions with existing information using several data-based methodologies and the evidence mentioned above. The entire decision-making process depends on many factors, such as the complexity of problems, time pressure, and the environment. Rely on data, research, and fundamental processes in your organization.
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