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Elements of Decision-Making

What is the situation?

The question the effective decision-maker asks is: “Is this a generic situation or an exception?” “Is this something that underlies a great many occurrences? Or is the occurrence a unique event that needs to be dealt with as such?” The generic always has to be answered through a rule, a principle. The exceptional can only be handled as such and as it comes.

What are the objectives?

The second major element in the decision process in clear specifications as to what the decision has to accomplish. What are the objectives the decision has to reach? What are the minimum goals it has to attain? What are the conditions it has to satisfy? In science these are known as “boundary conditions.” A decision, to be effective, needs to satisfy the boundary conditions. It needs to be adequate to its purpose.

What is right?

One has to start out with what is right rather than what is acceptable (let alone who is right) precisely because one always has to compromise in the end. But if one does not know what is right to satisfy the specifications and the boundary conditions, one cannot distinguish between the right compromise and the wrong compromise — and will end up by making the wrong compromise.

How will this be converted into action?

While thinking through the boundary conditions is the most difficult step in decision-making, converting the decision into effective action is usually the most time-consuming one. Yet a decision will not become effective unless the action commitments have been built into the decision from the start. In fact, no decision has been made unless carrying it out in specific steps has become someone’s work assignment and responsibility. Until then, there are only good intentions.

Where will the feedback come from?

Finally, a “feedback” has to be built into the decision to provide continuous testing, against actual events, of the expectations that underlay the decision.

Effective Decisions

There is no inherent reason why decisions should be distasteful – but most effective ones are. Executives are not paid for doing things they like to do. They are paid for getting the right things done – most of all in their specific task, the making of effective decisions.

Criteria

Perhaps the crucial question here is, "what is the criterion of relevance?" This, more often than not, turns on the measurement appropriate to the matter under discussion and to the decision to be reached. Whenever one analyzes the way a truly effective, a truly right, decision has been reached, one finds out a great deal of work and thought went into finding the appropriate measurement.

Alternatives

One does not make a decision unless there's disagreement … the right decision demands adequate disagreement … the executive who wants to make the right decision forces himself to see opposition as his means to think through the alternatives. He uses conflict of opinion as a tool to make sure all major aspects of an important matter or looked at carefully. Think through the ”experiment" – that is, the testing of the opinion against reality... what would it have to show?

Urgency

Ask: "is a decision really necessary?" One alternative is always the alternative of doing nothing. Every decision is like surgery. It is an intervention into a system and therefore carries with it the risk of shock. ... One has to make a decision when it condition is likely to degenerate if nothing is done. This also applies with respect and opportunity. If the opportunity is important and is likely to vanish unless one acts with dispatch, one acts – and one makes a radical change. If the answer to the question "what will happen if we do nothing?" is “It will take care of itself," one does not interfere. Nor does one interfere if the condition, while annoying, is of no importance unlikely to make any difference anyhow.

Risk vs Reward

The effective decision maker compares effort and risk of action to risk of an action there's no formula for the right decision here. But the guidelines are so clear that decision in the concrete case is really difficult. They are: act if on balance the benefits greatly outweigh the cost and risk, and act or do not act; but do not "hedge" or compromise.

Act

The decision is now ready to be made the specifications have been thought through, the alternative is explored, the risks and canes weird. Everything is known. Indeed, it is always reasonably clear by now what course of action must be taken. At this point a decision does indeed almost "make itself."

Drucker, P. (1967). The Effective Executive: The Definitive Guide to Getting the Right Things Done. Harper-Collins.

Values and Decision Making

When you’re faced with decisions in your life, it’s important to know exactly what your values are so you can make the best choices.

Morin, A. (2014). 13 Things Mentally Strong People Don't Do: Take Back Your Power, Embrace Change, Face Your Fears, and Train Your Brain for Happiness and Success. William Morrow

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