Making the right decision is crucial in the world of business. It comes as no surprise that companies spend a lot of their training budgets on developing their staff’s decision-making techniques. If you make a well considered decision you will lead your team to success. On the other hand, a poor decision can end in failure. There are many different techniques that we can adopt for decision making. Below two examples are outlined. The Pareto Analysis
When many different courses of action are possible, the Pareto analysis is a useful technique to employ. It works on the mathematical principle that by doing 20% of work you are able to generate 80% of the reward that you would get if you did 100% of the work. The Pareto analysis is a way of identifying which changes will give the most benefits. You start by listing all of the possible changes that you could make (based on problem areas or available options). Then you award each item on the list a score. There are different methods of scoring depending on the type of changes you are addressing. One example might be to award points according to the number of complaints different areas of the business have received. You deal with the highest scorers first because they will bring about the most change. Decision Tree Analysis
Decision trees can provide you with a structure by which you can see your options and possible outcomes more clearly. They help you to form a balanced picture or the pros and cons of taking a course of action.
You start a tree by drawing a small square on the left side of a big piece of paper. This represents a decision you need to make. Then you draw lines out to the right to represent each possible solution. You should write each solution along its line. At the end of each line you can either draw a small circle - to represent a result, or you can draw another square – if another decision is required. Squares represent decisions to be made and circles represent uncertain outcomes. If a solution is completed then a line ends without any shape. Continue drawing lines and shapes as necessary. Finally review the diagram by awarding each possible outcome a score. You will soon have a clear idea about which decisions need to be taken and which can be left. If you use this technique you should make sure you lay out all of the possible options so that they can then be challenged. |
