Thursday, June 20, 2013

Decisions--Make Them Without Panic

One of the most important traits of effective leaders is the ability to make decisions. Good leaders are inherently effective decision makers and risk takers.

Some people hate making decisions, and so they often make decisions by not making them or said another way, they are default decision makers.

One of the keys to making decisions is to realize that the decision maker rarely has perfect knowledge and therefore must make assumptions to fill in the unknowns. A good decision is one made based upon the best information available at the time. Late information is of no use in making a timely decision. Fretting over making a bad decision is not useful--usually, making a decision is the most important part of the process. Being decisive includes the ability to anticipate the probability of future events and incorporate potential outcomes into the decision making process.

Hindsight may provide the opportunity to second-guess, but hindsight has the advantage that making decisions in realtime does not have: historical knowledge. In my experience, perfect knowledge is too late in the decision making process to be useful.

Decision making is, therefore, an art. It is the art of understanding when enough information exists, allowing for timeliness requirement,s to ensure the decision is effective. For instance, making a decision to buy flood insurance after the storm has arrived and the flood waters are rising is probably not going to have the desired outcome. The decision needed to be made earlier based upon the elevation of the property, the proximity of water, and the probability of flooding based upon the 100 year flood plain.

Decision making improves with practice. The more decisions that are made, the more effective decision maker a person becomes.

Some people make many important decisions per day. Others make few decisions per week. The big decision makers have a methodology to make decisions and realize that almost any decision can be second guessed later--but at the time the decision was made, only certain facts were known.

I am currently working through opportunities related to my recent auto accident. Fortunately, no one was seriously injured and so the primary decision involves how to replace the vehicle which was declared a total loss. This decision involves whether to just replace the vehicle with a used vehicle within the value of the loss, buy a nicer used vehicle for some additional money, or to take the opportunity to purchase a new vehicle. The final decision will be a combination of fiscal resources and opportunities!

The key though, it not to panic. Take a deep breath and enjoy the decision making ride.

-- Bob Doan, Elkridge, MD

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