How do I make good management decisions?

Making wise management decisions is one of the most important skills you need to run a successful business. Without this skill everything could come to a screeching, revenue-sapping halt.

The good news is that even if you doubt your decision-making abilities, it’s a skill that can be learned. The best way to ensure that you consistently make wise decisions is to use a process -- one that encompasses options and alternatives. This reduces stress, gives you time to think, and provides a model that you can rely on again and again.

Here are seven steps that will help you consistently make wise management decisions:

1. Make sure it’s your decision to make. Sometimes the most stressful decisions of all are the ones that belong to someone else. Make sure you’re the one responsible for finding a solution.

2. Consider and write down your alternatives. If you know your options, making decisions becomes more of a strategy and less of a stressful event. Writing them down turns those options into reality and gives you the freedom to consider something without actually doing it. Think of your options as pieces of a jigsaw puzzle, one that will help you identify the best solution possible for a particular situation.

3. Collect more information. After you’ve jotted down your options, gather more data and try to imagine the outcome of each alternative. This is a safe way to experiment without putting anything or anyone into jeopardy.

4. Don’t underestimate the value of a gut feeling. Your visceral -- or gut -- response to something should never be dismissed. Indeed, if you minimize your intuition regarding a management decision, you may regret it when it’s too late. If you’re comfortable, then go for it, or perhaps you can reality-test it with a colleague. If you’re still unsure, you might need more information or it might be time to abandon that alternative. What’s important here is that you learn to trust your instincts and stand firmly by them.

5. Don’t underestimate your employees’ input. If you want to be informed, it’s a good idea to listen to everyone’s input. Remember, you can learn from your employees. Later, you can filter out what’s useful and what’s not. Belittling someone’s input can be especially damaging and can result in low morale and decreased productivity. Make sure that your employees know that you value their input. Remember, some of the biggest “mistakes” in business have become big sellers like penicillin and Post-it® Notes.

6. Don’t overestimate either. Just as you might underrate the information you glean from one source or another, you also might rely too heavily on what you perceive to be someone’s expertise. Sometimes people seem smarter than they are or the information they’re providing -- while persuasive sounding -- may be out-of-date or, worse, inaccurate. To avoid this trap try to obtain information from as many sources as possible. This will give you more to work with when it comes down to making wise management decisions.

7. Do a cost-benefit analysis. Make sure that your decisions make good financial sense. Imposing a finance filter to your decision-making process will help you weed out the alternatives that may seem wise on the surface but, in reality, are not good for your business. You need to add up the value of the benefits and then subtract the costs. If you’re in the red, then it’s time to start over or, at the very least, cross that particular option off your list. Basically, you want to ask yourself, “Is this worth it?”