Effective Decision Making: A Key Career Skill

Making good decisions is perhaps the most important management skill. “Nothing is more difficult, and therefore more precious, than the ability to decide,” Napoleon once said. (He made some excellent decisions and a few monumentally bad ones during the course of his career as the leader of France.) 

While some may believe decision making is completely innate or only gained through long years of management experience, it is also a skill that can be learned and perfected. Management strategies and tactics can aid effective decision-making. These include scenario planning, cutting your losses, individual decision making, and group decision making.

Scenarios can aid decision making

Wise decision making can be facilitated by following scenarios developed long before decisions must be made. Shell Oil made the use of scenario planning famous (Fortune Magazine). Company planners had developed various scenarios of future crude oil prices in event of a shut-off of crude oil supplies from the Middle East. They developed plans for how the company should respond to each scenario. Before the 1973 Arab oil embargo effectively doubled crude oil prices for its oil refineries, Shell already had plans in place and calmly moved to execute one. In a sense, no decisions had to be made. They were already planned when the scenarios were developed.

Today many firms in many industries use scenario planning to help guide their decision making.

Cutting your losses

A common decision making error is not to cut one’s losses soon enough. Early in my first industrial research job, I was fortunate enough to learn (in hindsight) an important decision-making lesson from observing the mistakes of others. A research project had continued for several years progressing to the point where a 50,000 pound per year pilot plant was built. Two problems became apparent when operating the pilot plant. The first was that the properties of the polymer produced in the plant were inferior to those produced in the lab. The second was that the product was too expensive to achieve the targeted sales volumes, particularly if the properties could not be improved. For three years the program was continued in a fruitless effort to solve these problems.

It became apparent that the company was throwing good money after bad. Millions of dollars were involved. The laboratory manager could not be persuaded to give up on the project and direct resources elsewhere. Finally the lab manager was replaced.

The new lab manager quickly killed the project and shut down the pilot plant. Some staff members and the former lab manager lost their jobs. Interestingly, the chemist who had originally developed product and process had moved onto another research program a couple of years earlier. By avoiding involvement in the bad decisions, he kept his job while others lost theirs.

Individual decision making

Some decisions are made on the individual level. Many individuals do not examine every possible alternative but rely on experience and rules of thumb to make decisions. This can lead to cognitive biases – systematic mistakes when making choices between options. In the case of the example above, it may have been a systematic bias towards optimism that resulted in the research program being funded year after year without the critical problems being solved.

Another non-quantitative, non-analytical tool used in decision making is intuition. More than just gut instinct; intuition often is the result of pattern recognition capability. Well honed, it can be a powerful decision-making tool and is often involved in making breakthrough decisions resulting in development of a revolutionary new product or process.

Group decision making

Decisions are often made by teams. Are teams smarter and capable of making better decisions than individuals? The answer can be yes if an important pitfall, “group think,” can be avoided. Group think can occur when the group discussing decision options is pressured, often subtly, into conforming to the view of a powerful individual.

Another problem is if there is little synergy between team members. This results in each team member making a decision independently rather than reaching a consensus together. One sign of this occurring is if the group tries to come to a decision by voting on options with little discussion.

John Borchardt is a chemist and freelance writer who has been an ACS career consultant for 15 years. He is the author of the ACS/Oxford University Press Book “Career Management for Scientists and Engineers.” He has had more than 1200 articles published in a variety of magazines, newspapers and encyclopedias. As an industrial chemist, he holds 30 U.S. and more than 125 international patents and is the author of more than 130 peer-reviewed papers.

One Response to Effective Decision Making: A Key Career Skill

  1. Alex Dail says:

    I really liked your first point about cutting losses. People who are successful are good to know when to cut their losses and go in a new direction. In fact, according to what I read this is a defining factor in people who are successful at starting and building a business.

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