How better decision making can positively impact the business of wealth
“We must all suffer one of two things: the pain of discipline or the pain of regret or disappointment ”
Have you ever thought if you are engaged and immersed in the business of wealth that your success and that of your business, family or clients is often the result of making good decisions? Conversely it does not take much imagination to figure out that bad decision making can cause carnage.
Developing the skills to make good decisions is critical in both businesses, within the family and in your personal life.
Let’s start by asking the question, what is decision making? A simple answer could be that your decision making can be viewed as the mental model you possess of your actions or process in making your decisions. Of course, some of the time our decisions are based on logic and at other times they can be emotional, irrational or perhaps confusing.
Best practice is a reduced focus on the outcome and instead a greater focus on the process used for your decision making.
Good decision making should not to be judged by whether the outcome is successful. Why so? Because some good decisions can lead to bad outcomes and bad decisions can still lead to good outcomes. Unless you are clairvoyant, the future cannot be predicted. There are other factors that cannot be predicted that can affect the outcome despite making the best decision possible e.g. the black swan syndrome. Skipping a process due to a lack of time, knowledge or resources is not an excuse, it’s the recipe for poor decision making.
Therefore, to improve your decision-making skills, focus on how comprehensive your decision-making process is.
Takeaway any of the required skills and decision-making suffers. Improve these skills and people become more effective, teams become more productive, employees become more satisfied, businesses become more successful, clients happier and families better positioned and more cohesive.
What are these skills?
Making good decisions requires several skills. Five key skills are:
To maintain a high degree of self-awareness
To maintain self- control
To be able to communicate effectively
The ability to recover quickly and pivot from setbacks
The capacity to trust
Applying these skills also requires a clear process you can have confidence in. As an example, a process could involve the following:
Identify the decision
Undertake your homework of required facts and information
Identify the options- exercise your brain to work these through
Weigh the probabilities and possibilities i.e. the pros and cons
Obtain objective opinions and feedback from trusted people
Make your decision and monitor the results
Some may go through thinking through this process quite fast while others cognitively process it far slower. Daniel Kahneman wrote about this in his book “Thinking, fast and slow”. His book tours the mind and explains the two systems that drive the way we think- System 1 is fast, intuitive and emotional while system 2 is slower, more deliberative and logical. While beyond this article, the book is a good read on how and when to use the 2 systems in your decision making.
Some last practical thoughts in developing the skills to make better decisions:
Take your time but don’t procrastinate, as this can lead to chaos due to indecisiveness (procrastination itself is a separate issue that needs to be overcome in order to make good decisions)
Gather the facts- all of the facts!
Stay open to all possibilities; put another way, have an open mindset.
Create rules/boundaries that are important for you and that you can communicate to others
Rest or sleep on the issues to be decided on; the issues and the decisions required always seems to be clearer after a good night’s sleep
Every organization, team leader, family member or individual has a unique constellation of issues that can negatively impact decision-making—causing them to avoid certain conversations, have ineffective conversations, put off taking decisive action to solve problems, or allow emotions to cloud judgment.
Developing and learning skillsets, including emotional intelligence, resilience, trust, teaming, communication and other management skills are key to developing great decision-making skills .Enhancing decision making skills among teams, executives, families or an entire enterprise takes all of the disparate desires, fears, values, needs, and beliefs of the five generations in today’s workplace into account and deploys skills to create cultures where everyone can feel engaged, empowered and play to their strengths.