We make decisions based on the way we think. Here are some ways for improving your decision making by improving your thinking
On 22 September 2019 a 178 year old organisation that had gone from organising an 11 mile trip to a temperance rally in Loughborough to operating tours worldwide closed it’s doors for the last time. Thomas Cook was a key player in the travel industry, but a series of poor decisions caused this Goliath’s downfall 1,2.
- In 2007 Thomas Cook decided to merge with the beleaguered MyTravel acquiring significant debt as part of the deal.
- It failed to respond to changes in buying habits. Whilst buyers were moving online, the company decided to retain it’s large, and expensive, bricks and mortar presence in the high-street.
- Most shamefully, in 2014 it’s all-male management board decided to oust the then female CEO. They did this even though she was successfully turning the business around.
The Effects of poor decision making
Poor decision making can have large-scale and long-term ramifications. The Thomas Cook example may seem extreme, but you don’t have to look too far to see the effects of poor decisions:
- Reputational damage as companies and individuals compromise themselves and their values
- Relationship damage caused by decisions that are one sided
- Financial damage as a result of poor outcomes
- Missed opportunities
- Wasted time and effort because of having to go back and cleanup, or doing unnecessary things
…and the list goes on.
Why we make the decisions we do
We make decisions based on the way we think. Constructed Development Theory (Stevens, 2020) shows us that the way we habitually construct our thinking impacts how we make choices, how we decide. The choices we make depend on both our awareness and our intention. How we construct ourselves via our Cognitive Intentions™ determines:
- What information we are aware of and how we consider it
- What timeframe we choose to consider
- Who’s needs and perspectives we take into account
- What outcomes we target
And how we actually go about making a decision, making a choice, in the first place
Constructed Development Theory shows us that the quality of our decisions is directly related to our level of Dynamic Intelligence™, our Thinking Quotient™. A development programme like Dr Stevens’ Three Leaders Programme can certainly help with this. However, it also shows us that there are certain things we can do for ourselves to impact on specific Cognitive Intentions™ that will help us to make decisions a little quicker and a little more effectively. These same Cognitive Intentions™ are also implicated in procrastination (which, after all, is just a decision not to do something!)
How to make better decisions
Develop your internal frame of reference
People who have a predominantly External frame of reference find it difficult to make decisions because they construct themselves according to external factors. They are essentially waiting for someone to tell them, directly or indirectly, what to do. When they do make a decision they don’t sufficiently consider their own situation. This causes them to make many decisions that are more favourable to others than to themselves.
Developing your Internal frame of reference will help you to address this imbalance by raising your awareness of your own perspective. It will help you to make quicker, more equitable, and qualitatively better decisions.
A great way to do this is to develop a strong sense of your Why. I covered this in my previous article Three what’s to get to your why so I won’t go into too much detail here. Essentially you need to answer the following three questions:
- What are your values?
- What lifestyle do you want?
- What is your purpose?
Globalise your thinking
If you are habitually drawn to Details you probably find it difficult to see the forest for the trees. Consequently, decision making is likely to be difficult and time consuming. When you do make a decision it is quite likely to be based on certain specific details and ignoring others.
Making an effort to Globalise your thinking will help you to see the forest. It will enable you to see the big picture, and how the specific details fit into that. This will help you make better decisions that take into account broader impacts, more quickly.
If you have followed the advice to develop your Internal frame of reference above, you have already started on this journey. This will enable you to consider the big picture principles in your decisions.
To build upon this take some time to:
- Define policies that encapsulate the key legislation, regulatory frameworks, etc that apply to your business
- Identify your key stakeholders (people) and define what’s important in your relationship with them, both from your perspective, and theirs
Taking the time to ‘chunk up’ what’s important in the three areas of Principle, Policy, and People, will enable you to understand the broader impact of the details. This is turn will aid you in your decision making.
Proceduralise everything you can
If you are the kind of person who spends a few minutes every day working out what they are going to wear, and are always thinking of different ways to do thing, then you are most likely an Options person. You probably find it hard to make decisions, especially those that make it difficult to switch to an alternative later. However, all of the small decisions you are making every day (what should I wear, what should I eat, which way should I walk the dog) consume mental energy. This leaves you less energy for the really important decisions making it more likely that you’ll fall back on your habitual thinking style.
To overcome this, Proceduralise as many things as you can. Automate where possible. There have been many articles written on this particular topic, so I won’t go into lots of detail here, but I do recommend starting small and building up.
Steve Jobs famously wore the same clothes every day (an idea he stole from Einstein). Not the exact same clothes of course, he wasn’t unhygenic! But he never had to choose which style or brand of jeans or top to wear. They were all the same. I set myself a lunch menu every week so I know what I’m going to eat on what day. Small things, but a few less decisions to make every week.
Whilst entrepreneurs are typically Options people, always looking for better ideas, businesses work best with consistency. Processes and Procedures provide this consistency. Putting in place and, importantly, following processes for getting things done in your business not only removes unnecessary decision making. It will also help your business to grow.
I’m not saying you should never change a process. Monitor the ones that are important and put in place a process to regularly review them. A fortnightly or monthly review of what’s working well, what can be improved, and what actions are going to be taken to make things better is a good process to follow. It allows you to indulge your appetite for change, but in a controlled manner.
Get ahead of the decisions
Like death and taxes, you can be certain that decisions will come your way. Depending on your thinking habits, you will make fewer or more of these Re-Actively out of necessity. You can make better, and quicker, decisions by developing your Pre-Activity. By getting ahead of decisions that will come your way, you will be better able to respond when they do.
A couple of ways you might do this are:
- ‘What if’ scenario planning – imagining different outcomes to things you are trying to achieve and considering how you will deal with those outcomes if they happen
- Capturing and reviewing data – decide on a few key metrics that will tell you how well things are working and regularly review them
None of these things are necessarily quick and easy fixes. Development is rarely quick or easy. But they are worth the effort to improve decision making in your business. They’ll help you to avoid the pitfalls leading to, and the negative impacts of, poor decisions. Working with a Developmentalist will help accelerate and broaden the scope of your development. So if you want to make even better decisions more quickly then get in touch or book a no-obligation discovery call.