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The 5 Best Ways To Make Wise Decisions in Small Businesses!
Can you imagine what it would be like if, at the initial stages of your business, you had to choose a particular decision-making strategy and then stick to it indefinitely? You’d probably go for the most reliable alternative, but in all honesty, do you think it’s practical to enforce a particular tactic each time? This is why it’s crucial to know how to adapt to varying circumstances and effectively discern what strategy is best.
The best way to make wise decisions in small businesses is to adapt to the varying circumstances you’re in. Situational decision-making exposes you to a wider range of perspectives that offers practical and relevant solutions. Adapting to the situation at hand will help you make better decisions.
Let’s dive deeper into what situational decision-making is and how it can benefit your leadership career and your business. We’ll look into the common misconceptions about decision-making and how a situational approach can help enhance your strategies in the workplace. You’ll also come across some tips on how to adjust your decision-making processes, depending on the situation you’re in, including the use of AI and decision-making partners.
The Best Way To Make Decisions as a Small Business Owner
Situational decision-making is the best way to make wise decisions in small businesses. Every situation calls for different perspectives, plans of action, and solutions, and it’s essential that leaders can easily customize their approach based on the circumstances they find themselves in.
Do you need to make a decision fast?
Do you have time to sit back and contemplate before making a decision?
Do you need the insights of an expert to make a well-informed decision?
Would other people’s perspectives give you a clearer picture of the problem at hand?
These are just some of the questions you must ask yourself so you can come up with the most effective and practical decisions for your business.
Decision-Making Myths
There are plenty of misconceptions surrounding decision-making. Unfortunately, some of these have been deeply ingrained in even some of the best leaders and they may sometimes cause harm to an organization by restricting leaders’ abilities to make wise decisions for the company.
Here are some of the most common myths I’ve come across:
- Decisions have to be made fast. Speed does not equate to effectiveness and efficiency. Rushing the process may force you to make weak choices, eventually leading to regrets.
- You can always set it aside if you’re not yet ready to decide. Putting off decisions and not adopting a certain sense of urgency can also be detrimental to your business. Opportunities may pass you, the problem may get out of hand, and you might find it more difficult to come up with viable solutions if you wait too long.
- You must always solve one problem at a time. Leaders must be good at multitasking because problems rarely present themselves in succession. You always have to be equipped with skills in proficiently handling various issues in the workplace.
- A leader is expected to be the sole decision-maker. Leaders do not always have to make decisions on their own since this sometimes leads to biased choices. Group decision-making is a great way to consider varying perspectives on issues so you can come up with the most logical and inclusive decisions for the team.
- The best decisions are made in the boardroom. This outdated concept that critical meetings must always be held in stiff, formal setups can inhibit creativity and innovativeness. Sometimes decisions are better made through experiential learning where individuals enjoy a more hands-on approach in sharpening their problem-solving and critical-thinking skills.
Benefits of Situational Decision-Making
There shouldn’t be a one-size-fits-all approach to decision-making. You must tailor-fit your strategies based on the current situation, risks involved, possible consequences of your actions, and your team dynamics.
You can expect to enjoy these benefits with a sound situational decision-making strategy in place:
- Practical, relevant decisions
- Comprehensive, well-informed solutions
- Pragmatic plans of action
- Unbiased perspectives
- Streamlined, effective decision-making process for your team
The Best Strategies for Situational Decision-Making
Different situations call for different strategies. Here are some useful tips to help you navigate through situational decision-making:
1. Group Decision-Making
If you’re not in critical emergency situations where fast decisions can make or break your business, it will be advantageous to involve your team in the decision-making process. Group decision-making may take more time than traditional, individual decision-making, but it opens you up to more perspectives and opportunities you otherwise won’t encounter if you were to set out on this mission by yourself.
The book Thinking, Fast and Slow is a great read for leaders eager to learn more about how different decision-making techniques can help us work against our natural biases and mental glitches, both of which can wreak havoc on our ability to make sound choices. The learnings here can be applied both in business and personal lives.
2. Bring In an Expert
You may be the primary mover and shaker of your team, but that doesn’t mean you’re supposed to be well-versed in all aspects relating to the business. As a leader, you must know when to exert your authority and when to hold back in favor of someone who can contribute more to the benefit of your organization.
In instances where the insights of a more knowledgeable and experienced person are required, don’t hesitate to bring an expert into the picture. People tend to value expert insights and advice more because they feel that these can equip them in making better, well-informed, rational decisions. Outcomes are more positive since experts generally have a deeper understanding of the issues being discussed.
3. Understand the Value of Randomness
Random choices are often interpreted as irrational and haphazard. They’re usually frowned upon since they imply irresponsibility, carelessness for consequences, and inefficiency. However, randomness in decision-making is actually a concept worth taking a closer look at. When adequately controlled, random decisions can be advantageous to your company.
Sometimes, appealing to chance may be good for business. Remember when you were young and you pretty much had no concrete plans for the summer break? You’d go practically wherever the wind takes you, and yet, this is probably the phase in life where you had the most fun and learned a lot about life.
The same goes for business — controlled random decisions are the best options in suitable situations, such as when your aim is to foster diversity and fairness, you’re open to unexpected discoveries, or when your goal is to treat your clients to a certain sense of divergence.
Grab a copy of Fooled by Randomness to read about how we grasp the concept of luck and coincidences in business and life. It provides a refreshing take on happenstance and random events, and how they can influence pivotal occurrences in life.
4. Invest in Decision Intelligence
Streamlining the decision-making process is another way to ensure you always make wise decisions for your business. Decision intelligence tools are great for when you have recurring decisions to make or when your business is currently at a crossroads and you need help evaluating your situation and seeing the bigger picture.
A decision intelligence tool like Cloverpop works great for small businesses. It has easy-to-use properties, and its drag-and-drop feature allows even the most technologically-challenged individuals to navigate through the program.
However, most small business leaders are daunted by decision intelligence tools, especially since most of them entail costly costs of thousands of dollars. If you’re one of those on the fence about diving right into artificial intelligence for decision-making support, why don’t you schedule a demo with us today? We, at Sancus Leadership help optimize your decision-making process, and enable access this enterprise software through our partnership with Cloverpop!
5. Enhance Your Decision-Making Skills
Investing in decision intelligence may not always be a viable option for small businesses, especially for those with limited resources. Expensive software may cost them an arm and a leg and may force them to misuse their available funds.
The best way to make wise decisions for your small business is to sharpen your personal decision-making competencies. As a leader, you must invest in your skills, know-how, and experiences so you can always be the best version of yourself for your team.
Being mentored by a leader you look up to is a great way to start. When I was in the military, a senior officer took me under his wing and taught me the ins and outs of effectively managing a team through even the most critical situations. Thanks to him, I quickly learned the ropes in leading my team through dangerous situations and treacherous landscapes.
At Sancus Leadership, we can help you learn how to make faster and more accurate decisions for your small business. When you’re ready to learn more about new and exciting decision-making strategies that you can optimize for your team, book a call with us, and you’ll discover how we can make a difference in your organization’s journey to success.
Key Takeaways
What’s unique about small businesses is they’re at the forefront of novelty, transformation, and innovation. Small-business leaders tend to enjoy more flexibility, control, and independence than their counterparts from larger firms. Furthermore, they enjoy more opportunities to establish a favorable image for the business — it’s like starting with a clean slate and you get to design the company’s image to the world.
Situational decision-making is a great strategy to ensure you always make wise choices for your business. By learning to adapt to various situations, your organization will benefit a lot from your practical, comprehensive, and well-thought-out choices.
