You're a decision-maker every single day. Show
From the moment you wake up, you start making decisions. You decide what to eat for breakfast, what to wear, and whether to spend 15 minutes on a workout, meditation, or extra sleep. These decisions, large and small, continue all day long. Some decisions aren't too complicated. We make them with barely a thought. Other decisions should be more intentional. If you are a manager or want to be one, the decision-making process in management positions demands more attention to detail. Why is it so hard to make a decision?If you’re a manager who sometimes dreads making decisions, it's understandable. When you lead the decision-making process, there's a lot at stake. Your team members count on you to be a good leader. Sometimes, you may not have a significant amount of time to best decide. Other times, the information available to you might not offer a straightforward course of action. The fear of making the wrong decision can loom over your head and fill you with self-doubt. Sometimes, you might struggle with decision fatigue and feel exhausted by even the smallest decision. Being the decision-maker is filled with opportunities with chances of success and failure. Making a bad decision is always a possibility. The key is to make the best possible decisions you can with the information you have available. Trust your training and knowledge, but also keep working on improving your decision-making processes. But trusting your abilities and having confidence in yourself doesn't come without some work. If you're looking for help with your confidence, check out what our BetterUp coaches can do for you. We're here to help you become more comfortable making your managerial decisions. What are the main steps to take when making a decision as a manager?The entire process of how and when to decide can seem like a lot. But being prepared and following steps can help you have a rational decision-making process. You will develop your own process over time, but it helps to build on a basic framework. Here's a step-by-step process that you can follow when you have to make managerial decisions: 1. Identify the decision that you have to makeIt's essential to identify what you need to decide on. This way, you know what problem you're solving. If you don't know the details of what you're dealing with, make sure you take the time to familiarize yourself with them. 2. Review relevant informationYou can start brainstorming after you've focused on what decision you must make. To make an informed decision, you need to take stock of all available information. Reviewing a lot of information can grow chaotic. Try to stay organized by using strategies like flowcharts or colored sticky notes. You don’t want to lose an important document in a stack of hundreds. 3. Think about possible alternativesHow many possible solutions are there to this decision? Since you've reviewed your information carefully, you've probably considered several options. There could be many alternatives, but this isn't the stage where you figure out the best choice. Ask questions. Then, listen to any feedback you receive about these alternatives from your team members or other trusted individuals. You’ll have plenty to think over, so stick to your organizational methods. 4. Weigh your evidenceNow that you have your possible solutions, it's time to weigh all the pros and cons. Think about your competitors and the outcomes they've had with such decisions. Review the possible wins and losses that you could experience for each possible alternative. You can also consider how your decision would impact your group members and stakeholders. What kind of change will they have to adapt to? Don’t rush to this stage. You want to make a decision that you feel comfortable with and confident in. 5. Choose between your alternativesYou've arrived at the step where you make your final decision. Review your information and alternatives and weigh your evidence. Then you can make your decision. Trust yourself: you're prepared to make this call. You don't have to make perfect decisions. You need to make good decisions. 6. Take actionThe final step is executing your decision. Create a plan that sets you and your business up to succeed. Your strategic planning could take a while, but that's important for your decision’s success. You won't reap as many benefits if you don't execute it properly. 7. Reflect on your decisionSome people consider this a bonus step. But if you want to become a better decision-maker, it's critical. You've followed a decision-making model. You made your decision and executed it. Now that you're done, think about how well your decision-making skills served you and what you'd do differently. The goal in reflection isn't to convince yourself that you made all the right choices. The goal is to be honest about what worked and what didn't about how you approached the decision. Did you solve the problem you first identified? How good were you at gathering information? Are your goals being met? Taking notes can help you learn from your mistakes and learn more effective decision-making processes for the future. This way you can become a better decision-maker for when the decisions get harder. Common challengesThe decision-making process involves plenty of challenges that everyone experiences. It doesn't matter if you've been making managerial decisions for one year, five years, or 15 years: these challenges can impact anyone. Here are four common challenges you may encounter in the decision-making process: 1. Having too much informationWith all of the information you've gathered, it's easy to get overwhelmed. Having too little knowledge can be overwhelming, too, and let your biases slip in. With practice, prioritizing and picking the most crucial information to review will become easier. Don’t hesitate if you need to do some more research to better guide your decisions. Research skills never go out of style, and you’ll know how to prioritize what you find. Be realistic, though. As a manager, you rarely have all of the time or information you might like. Being 100-percent certain is not the goal. 2. Being overconfidenceEven though you're doing your best to make informed decisions, you could always make the wrong decision. It's part of life. But if you don’t acknowledge this possibility, it could make you more prone to mistakes or failure. Being confident is great, but overconfidence can lead to unnecessary errors. 3. Not identifying the problem correctlyThe first step in your decision-making process is an important one. It sets the tone for the rest of your research and consultation. If you don't identify what you're trying to decide on, you can’t reach the best decision in the end. Some decisions are complex and require a lot of time, so don't rush. 4. Getting everyone on boardThe bottom line is that sometimes you're the decision-maker. As a manager, you make the final decision, but hearing feedback and working collaboratively is crucial. Be clear with your team whether or not the decision itself will be collaborative so you don't set the wrong expectations. Will you be taking a vote as a team? Or, are you getting their input so that you can make the final decision yourself? Be as transparent as possible about the criteria you will use to make the decision and what the process and timeline will be. If the rest of your team members can't agree on anything, it makes your decision more challenging and clear communication more important. You might need to strengthen your team's communication skills or discuss problem-solving strategies with the rest of your team. 4 pro tips to ace your way of making decisionsThere will be both easy-going and challenging moments for every decision you make. Here are four final tips to help you feel confident about the decisions you make:
Final thoughtsReady to strengthen your decision-making abilities? There’s always room for improvement — especially in management positions. Leadership is a moving target, and our coaches at BetterUp would love to help you strengthen and refine your decision-making and other leadership skills. In psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be either rational or irrational. The decision-making process is a reasoning process based on assumptions of values, preferences and beliefs of the decision-maker.[1] Every decision-making process produces a final choice, which may or may not prompt action.
Research about decision-making is also published under the label problem solving, particularly in European psychological research.[2] Decision-making can be regarded as a problem-solving activity yielding a solution deemed to be optimal, or at least satisfactory. It is therefore a process which can be more or less rational or irrational and can be based on explicit or tacit knowledge and beliefs. Tacit knowledge is often used to fill the gaps in complex decision-making processes.[3] Usually, both of these types of knowledge, tacit and explicit, are used together in the decision-making process. Human performance has been the subject of active research from several perspectives:
A major part of decision-making, involves the analysis of a finite set of alternatives described in terms of evaluative criteria. Then the task might be to rank these alternatives in terms of how attractive they are to the decision-maker(s) when all the criteria are considered simultaneously. Another task might be to find the best alternative or to determine the relative total priority of each alternative (for instance, if alternatives represent projects competing for funds) when all the criteria are considered simultaneously. Solving such problems is the focus of multiple-criteria decision analysis (MCDA). This area of decision-making, although very old, has attracted the interest of many researchers and practitioners and is still highly debated as there are many MCDA methods which may yield very different results when they are applied to exactly the same data.[5] This leads to the formulation of a decision-making paradox. Logical decision-making is an important part of all science-based professions, where specialists apply their knowledge in a given area to make informed decisions. For example, medical decision-making often involves a diagnosis and the selection of appropriate treatment. But naturalistic decision-making research shows that in situations with higher time pressure, higher stakes, or increased ambiguities, experts may use intuitive decision-making rather than structured approaches. They may follow a recognition primed decision that fits their experience, and arrive at a course of action without weighing alternatives.[6] The decision-maker's environment can play a part in the decision-making process. For example, environmental complexity is a factor that influences cognitive function.[7] A complex environment is an environment with a large number of different possible states which come and go over time.[8] Studies done at the University of Colorado have shown that more complex environments correlate with higher cognitive function, which means that a decision can be influenced by the location. One experiment measured complexity in a room by the number of small objects and appliances present; a simple room had less of those things. Cognitive function was greatly affected by the higher measure of environmental complexity, making it easier to think about the situation and make a better decision.[7]
It is important to differentiate between problem solving, or problem analysis, and decision-making. Problem solving is the process of investigating the given information and finding all possible solutions through invention or discovery. Traditionally, it is argued that problem solving is a step towards decision making, so that the information gathered in that process may be used towards decision-making.[9][page needed] Characteristics of problem solving
Analysis paralysisWhen a group or individual is unable to make it through the problem-solving step on the way to making a decision, they could be experiencing analysis paralysis. Analysis paralysis is the state that a person enters where they are unable to make a decision, in effect paralyzing the outcome.[12][13] Some of the main causes for analysis paralysis is the overwhelming flood of incoming data or the tendency to overanalyze the situation at hand.[14] There are said to be three different types of analysis paralysis.[15]
Extinction by instinctOn the opposite side of analysis paralysis is the phenomenon called extinction by instinct. Extinction by instinct is the state that a person is in when they make careless decisions without detailed planning or thorough systematic processes.[16] Extinction by instinct can possibly be fixed by implementing a structural system, like checks and balances into a group or one's life. Analysis paralysis is the exact opposite where a group's schedule could be saturated by too much of a structural checks and balance system.[16] Extinction by instinct in a group setting Groupthink is another occurrence that falls under the idea of extinction by instinct. Groupthink is when members in a group become more involved in the “value of the group (and their being part of it) higher than anything else”; thus, creating a habit of making decisions quickly and unanimously. In other words, a group stuck in groupthink are participating in the phenomenon of extinction by instinct.[17] Information overloadInformation overload is "a gap between the volume of information and the tools we have to assimilate" it.[18] Information used in decision-making is to reduce or eliminate the uncertainty.[19] Excessive information affects problem processing and tasking, which affects decision-making.[20] Psychologist George Armitage Miller suggests that humans’ decision making becomes inhibited because human brains can only hold a limited amount of information.[21] Crystal C. Hall and colleagues described an "illusion of knowledge", which means that as individuals encounter too much knowledge, it can interfere with their ability to make rational decisions.[22] Other names for information overload are information anxiety, information explosion, infobesity, and infoxication.[23][24][25][26] Decision fatigueDecision fatigue is when a sizable amount of decision-making leads to a decline in decision-making skills. People who make decisions in an extended period of time begin to lose mental energy needed to analyze all possible solutions. It is speculated that decision fatigue only happens to those who believe willpower has a limited capacity.[27] Impulsive decision-making and decision avoidance are two possible paths that extend from decision fatigue. Impulse decisions are made more often when a person is tired of analysis situations or solutions; the solution they make is to act and not think.[27] Decision avoidance is when a person evades the situation entirely by not ever making a decision. Decision avoidance is different from analysis paralysis because this sensation is about avoiding the situation entirely, while analysis paralysis is continually looking at the decisions to be made but still unable to make a choice.[28][self-published source] Post-decision analysisEvaluation and analysis of past decisions is complementary to decision-making. See also mental accounting and Postmortem documentation. Decision-making is a region of intense study in the fields of systems neuroscience, and cognitive neuroscience. Several brain structures, including the anterior cingulate cortex (ACC), orbitofrontal cortex, and the overlapping ventromedial prefrontal cortex are believed to be involved in decision-making processes. A neuroimaging study[29] found distinctive patterns of neural activation in these regions depending on whether decisions were made on the basis of perceived personal volition or following directions from someone else. Patients with damage to the ventromedial prefrontal cortex have difficulty making advantageous decisions.[30][page needed] A common laboratory paradigm for studying neural decision-making is the two-alternative forced choice task (2AFC), in which a subject has to choose between two alternatives within a certain time. A study of a two-alternative forced choice task involving rhesus monkeys found that neurons in the parietal cortex not only represent the formation of a decision[31] but also signal the degree of certainty (or "confidence") associated with the decision.[32] A 2012 study found that rats and humans can optimally accumulate incoming sensory evidence, to make statistically optimal decisions.[33] Another study found that lesions to the ACC in the macaque resulted in impaired decision-making in the long run of reinforcement guided tasks suggesting that the ACC may be involved in evaluating past reinforcement information and guiding future action.[34] It has recently been argued that the development of formal frameworks will allow neuroscientists to study richer and more naturalistic paradigms than simple 2AFC decision tasks; in particular, such decisions may involve planning and information search across temporally extended environments.[35] EmotionsEmotion appears able to aid the decision-making process. Decision-making often occurs in the face of uncertainty about whether one's choices will lead to benefit or harm (see also Risk). The somatic marker hypothesis is a neurobiological theory of how decisions are made in the face of uncertain outcomes.[36] This theory holds that such decisions are aided by emotions, in the form of bodily states, that are elicited during the deliberation of future consequences and that mark different options for behavior as being advantageous or disadvantageous. This process involves an interplay between neural systems that elicit emotional/bodily states and neural systems that map these emotional/bodily states.[37] A recent lesion mapping study of 152 patients with focal brain lesions conducted by Aron K. Barbey and colleagues provided evidence to help discover the neural mechanisms of emotional intelligence.[38][39][40] Decision-making techniques can be separated into two broad categories: group decision-making techniques and individual decision-making techniques. Individual decision-making techniques can also often be applied by a group. Group
Individual
A variety of researchers have formulated similar prescriptive steps aimed at improving decision-making. GOFERIn the 1980s, psychologist Leon Mann and colleagues developed a decision-making process called GOFER, which they taught to adolescents, as summarized in the book Teaching Decision Making To Adolescents.[45] The process was based on extensive earlier research conducted with psychologist Irving Janis.[46] GOFER is an acronym for five decision-making steps:[47]
DECIDEIn 2008, Kristina Guo published the DECIDE model of decision-making, which has six parts:[48]
OtherIn 2007, Pam Brown of Singleton Hospital in Swansea, Wales, divided the decision-making process into seven steps:[49]
In 2009, professor John Pijanowski described how the Arkansas Program, an ethics curriculum at the University of Arkansas, used eight stages of moral decision-making based on the work of James Rest:[50]: 6
Group stagesThere are four stages or phases that should be involved in all group decision-making:[51]
It is said that establishing critical norms in a group improves the quality of decisions, while the majority of opinions (called consensus norms) do not.[52] Conflicts in socialization are divided in to functional and dysfunctional types. Functional conflicts are mostly the questioning the managers assumptions in their decision making and dysfunctional conflicts are like personal attacks and every action which decrease team effectiveness. Functional conflicts are the better ones to gain higher quality decision making caused by the increased team knowledge and shared understanding.[53] In economics, it is thought that if humans are rational and free to make their own decisions, then they would behave according to rational choice theory.[54]: 368–370 Rational choice theory says that a person consistently makes choices that lead to the best situation for themselves, taking into account all available considerations including costs and benefits; the rationality of these considerations is from the point of view of the person themselves, so a decision is not irrational just because someone else finds it questionable. In reality, however, there are some factors that affect decision-making abilities and cause people to make irrational decisions – for example, to make contradictory choices when faced with the same problem framed in two different ways (see also Allais paradox). Rational decision making is a multi-step process for making choices between alternatives. The process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. Irrational decision is more counter to logic. The decisions are made in haste and outcomes are not considered.[55] One of the most prominent theories of decision making is subjective expected utility (SEU) theory, which describes the rational behavior of the decision maker.[56] The decision maker assesses different alternatives by their utilities and the subjective probability of occurrence.[56] Rational decision-making is often grounded on experience and theories that are able to put this approach on solid mathematical grounds so that subjectivity is reduced to a minimum, see e.g. scenario optimization. Rational decision is generally seen as the best or most likely decision to achieve the set goals or outcome.[57] It has been found that, unlike adults, children are less likely to have research strategy behaviors. One such behavior is adaptive decision-making, which is described as funneling and then analyzing the more promising information provided if the number of options to choose from increases. Adaptive decision-making behavior is somewhat present for children, ages 11–12 and older, but decreases in presence the younger they are.[58] The reason children aren't as fluid in their decision making is because they lack the ability to weigh the cost and effort needed to gather information in the decision-making process. Some possibilities that explain this inability are knowledge deficits and lack of utilization skills. Children lack the metacognitive knowledge necessary to know when to use any strategies they do possess to change their approach to decision-making.[58] When it comes to the idea of fairness in decision making, children and adults differ much less. Children are able to understand the concept of fairness in decision making from an early age. Toddlers and infants, ranging from 9–21 months, understand basic principles of equality. The main difference found is that more complex principles of fairness in decision making such as contextual and intentional information don't come until children get older.[59] Adolescents
During their adolescent years, teens are known for their high-risk behaviors and rash decisions. Research[60] has shown that there are differences in cognitive processes between adolescents and adults during decision-making. Researchers have concluded that differences in decision-making are not due to a lack of logic or reasoning, but more due to the immaturity of psychosocial capacities that influence decision-making. Examples of their undeveloped capacities which influence decision-making would be impulse control, emotion regulation, delayed gratification and resistance to peer pressure. In the past, researchers have thought that adolescent behavior was simply due to incompetency regarding decision-making. Currently, researchers have concluded that adults and adolescents are both competent decision-makers, not just adults. However, adolescents' competent decision-making skills decrease when psychosocial capacities become present. Research[61] has shown that risk-taking behaviors in adolescents may be the product of interactions between the socioemotional brain network and its cognitive-control network. The socioemotional part of the brain processes social and emotional stimuli and has been shown to be important in reward processing. The cognitive-control network assists in planning and self-regulation. Both of these sections of the brain change over the course of puberty. However, the socioemotional network changes quickly and abruptly, while the cognitive-control network changes more gradually. Because of this difference in change, the cognitive-control network, which usually regulates the socioemotional network, struggles to control the socioemotional network when psychosocial capacities are present.[clarification needed] When adolescents are exposed to social and emotional stimuli, their socioemotional network is activated as well as areas of the brain involved in reward processing. Because teens often gain a sense of reward from risk-taking behaviors, their repetition becomes ever more probable due to the reward experienced. In this, the process mirrors addiction. Teens can become addicted to risky behavior because they are in a high state of arousal and are rewarded for it not only by their own internal functions but also by their peers around them. A recent study suggests that adolescents have difficulties adequately adjusting beliefs in response to bad news (such as reading that smoking poses a greater risk to health than they thought), but do not differ from adults in their ability to alter beliefs in response to good news.[62] This creates biased beliefs, which may lead to greater risk taking.[63] AdultsAdults are generally better able to control their risk-taking because their cognitive-control system has matured enough to the point where it can control the socioemotional network, even in the context of high arousal or when psychosocial capacities are present. Also, adults are less likely to find themselves in situations that push them to do risky things. For example, teens are more likely to be around peers who peer pressure them into doing things, while adults are not as exposed to this sort of social setting.[64][65] Biases usually affect decision-making processes. They appear more when decision task has time pressure, is done under high stress and/or task is highly complex.[66] Here is a list of commonly debated biases in judgment and decision-making:
In groups, people generate decisions through active and complex processes. One method consists of three steps: initial preferences are expressed by members; the members of the group then gather and share information concerning those preferences; finally, the members combine their views and make a single choice about how to face the problem. Although these steps are relatively ordinary, judgements are often distorted by cognitive and motivational biases, include "sins of commission", "sins of omission", and "sins of imprecision".[74][page needed] Herbert A. Simon coined the phrase "bounded rationality" to express the idea that human decision-making is limited by available information, available time and the mind's information-processing ability. Further psychological research has identified individual differences between two cognitive styles: maximizers try to make an optimal decision, whereas satisficers simply try to find a solution that is "good enough". Maximizers tend to take longer making decisions due to the need to maximize performance across all variables and make tradeoffs carefully; they also tend to more often regret their decisions (perhaps because they are more able than satisficers to recognize that a decision turned out to be sub-optimal).[75] Intuitive vs. rationalThe psychologist Daniel Kahneman, adopting terms originally proposed by the psychologists Keith Stanovich and Richard West, has theorized that a person's decision-making is the result of an interplay between two kinds of cognitive processes: an automatic intuitive system (called "System 1") and an effortful rational system (called "System 2"). System 1 is a bottom-up, fast, and implicit system of decision-making, while system 2 is a top-down, slow, and explicit system of decision-making.[76] System 1 includes simple heuristics in judgment and decision-making such as the affect heuristic, the availability heuristic, the familiarity heuristic, and the representativeness heuristic. Combinatorial vs. positionalStyles and methods of decision-making were elaborated by Aron Katsenelinboigen, the founder of predispositioning theory. In his analysis on styles and methods, Katsenelinboigen referred to the game of chess, saying that "chess does disclose various methods of operation, notably the creation of predisposition-methods which may be applicable to other, more complex systems."[77]: 5 Katsenelinboigen states that apart from the methods (reactive and selective) and sub-methods (randomization, predispositioning, programming), there are two major styles: positional and combinational. Both styles are utilized in the game of chess. The two styles reflect two basic approaches to uncertainty: deterministic (combinational style) and indeterministic (positional style). Katsenelinboigen's definition of the two styles are the following. The combinational style is characterized by:
In defining the combinational style in chess, Katsenelinboigen wrote: "The combinational style features a clearly formulated limited objective, namely the capture of material (the main constituent element of a chess position). The objective is implemented via a well-defined, and in some cases, unique sequence of moves aimed at reaching the set goal. As a rule, this sequence leaves no options for the opponent. Finding a combinational objective allows the player to focus all his energies on efficient execution, that is, the player's analysis may be limited to the pieces directly partaking in the combination. This approach is the crux of the combination and the combinational style of play.[77]: 57 The positional style is distinguished by:
"Unlike the combinational player, the positional player is occupied, first and foremost, with the elaboration of the position that will allow him to develop in the unknown future. In playing the positional style, the player must evaluate relational and material parameters as independent variables. ... The positional style gives the player the opportunity to develop a position until it becomes pregnant with a combination. However, the combination is not the final goal of the positional player – it helps him to achieve the desirable, keeping in mind a predisposition for the future development. The pyrrhic victory is the best example of one's inability to think positionally."[78] The positional style serves to:
Influence of Myers–Briggs typeAccording to Isabel Briggs Myers, a person's decision-making process depends to a significant degree on their cognitive style.[79][page needed] Myers developed a set of four bi-polar dimensions, called the Myers–Briggs Type Indicator (MBTI). The terminal points on these dimensions are: thinking and feeling; extroversion and introversion; judgment and perception; and sensing and intuition. She claimed that a person's decision-making style correlates well with how they score on these four dimensions. For example, someone who scored near the thinking, extroversion, sensing, and judgment ends of the dimensions would tend to have a logical, analytical, objective, critical, and empirical decision-making style. However, some psychologists say that the MBTI lacks reliability and validity and is poorly constructed.[80][81] Other studies suggest that these national or cross-cultural differences in decision-making exist across entire societies. For example, Maris Martinsons has found that American, Japanese and Chinese business leaders each exhibit a distinctive national style of decision-making.[82] The Myers–Briggs typology has been the subject of criticism regarding its poor psychometric properties.[83][84][85] General decision-making style (GDMS)In the general decision-making style (GDMS) test developed by Suzanne Scott and Reginald Bruce, there are five decision-making styles: rational, intuitive, dependent, avoidant, and spontaneous.[86][87] These five different decision-making styles change depending on the context and situation, and one style is not necessarily better than any other. In the examples below, the individual is working for a company and is offered a job from a different company.
There are a few characteristics that differentiate organizational decision-making from individual decision-making as studied in lab experiments:[88]
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