5 steps of decision-making

Numerous entities, from blogs to academic institutions, have attempted to distill the decision-making process into a series of steps. For example, the University of Massachusetts/Dartmouth’s seven basic steps is an oft-cited decision-making system. However, the steps involved in making decisions typically include the following:

1. Identify your goal. This may sound like a no-brainer for personal goals, but it’s also critical when setting achievable business goals. The more stakeholders involved in the outcome, the more likely your goals will be misaligned. Therefore, goal clarity is crucial.
2. Gather relevant information. Amass a wealth of information about your goal and what it will take to achieve it. For example, relevant courses of action and alternatives should be identified and researched thoroughly.
3. Evaluate your options. During this step, decision-makers must carefully weigh all the evidence they’ve collected.
4. Make your choice. Based on all the above factors, you’ll arrive at your decision.
5. Evaluate your decision. Gauge your decision’s success with both short-term and long-term evaluations.

Decision-making tools and techniques

There are dozens of tools and techniques for organizing your thoughts during the decision-making process. Here are some of the more popular options:

• Decision matrix: A decision matrix helps you evaluate all your options. When using the matrix, create a table with all the choices in the first column and all the factors that affect the decision in the first row. Next, score each option to decipher which factors are more important. A final score is then tallied to reveal the best pick.
• Pros-and-cons list: Many decision-makers use a T-chart – or pros-and-cons list – to weigh the benefits and disadvantages of all options. This list ensures that you consider all positive and negative outcomes when making a decision.
• Decision tree: A decision tolree is a graph or model that contemplates each option and its outcomes. This technique is also helpful for conducting statistical analyses.
• Multiple voices: Multivoting is used when multiple people are involved in making a decision. This technique helps whittle down an extensive list of options to a smaller group until the final decision is revealed.
• Pareto analysis: A Pareto analysis technique is helpful when making many decisions. This tool helps prioritize which decisions should be made first by determining which will have the most significant impact.
• Cost-benefit analysis: This technique is used when weighing the financial ramifications of each possible alternative to determine what makes the most sense from an economic perspective…[MORE]