Understanding the importance of decision making and decision-making processes

When was the last time you made a decision? It was probably when you decided to click on the link and read this article! So, what decision-making approach did you use? How much time did you think about it? One way or another you just experienced a decision-making process. And that was but one of perhaps hundreds of decisions you have made already today.

What is decision-making?

Put simply, decision-making is the process of considering, and making a choice between, various courses of action.

A decision can be defined as:

“Come or bring to a resolution in the mind as a result of consideration.”

or

“Make a choice from a number of alternatives.”

Lexico (Oxford English Dictionary)

Decision-making can be further defined as:

“The action or process of making important decisions.

Lexico (Oxford English Dictionary)

But even these definitions, though useful, can be misleading as many of the decisions we make every day are unconscious. Also, we apply process – of sorts – even to non-important decisions.

Decision-making is constant

Decision-making is a process, but it is actually something we do constantly. Whether we are conscious of the process or not, we are faced with a multitude of decisions to make every day. Estimates vary as to exactly how many, but, researcher Sheena Iyengar did studies of US adults showing they made around 70 conscious decisions on a daily basis.

And there are higher estimates. Researchers at Cornell University have shown that we make 226.7 decisions each day on just food alone (Wansink and Sobal, 2007). I am guessing my .7 decision was when I nearly had that extra cup of coffee…

And that is just for choices about food! Think about all the other decisions we have to make. For example, even as I type I am making a constant string of choices of which words to use in order to express what I want to say.

Some online sources estimate that we make around 35,000 decisions a day. This estimate is based on the number of thoughts we have per second. This is not an exact measure by any means. But, what is certain, is that we have to make loads of decisions! Many of these choices are conscious ones, and these require some sort of applied process.

“Time is like a river that carries us forward into encounters with reality that require us to make decisions. We can’t stop our movement down this river and we can’t avoid those encounters. We can only approach them in the best possible way.” 

Ray Dalio

The Paralysis of Analysis

Have you ever stood in a supermarket and stared for an age, weighing up a choice between similar items?

Most of us will have experienced this kind of analysis paralysis to one level or another. It happens when the choice is too great, alternatives too similar or the choice is outside of our usual frame of reference. To avoid this paralysis we often rely on heuristics – simple decision-making tools, rules or hacks – to help us make informed decisions. For example, we might prefer one particular brand or product and just pick that so we don’t have to give it too much thought. This can be an effective heuristic – to save us time, ensure quality or save money.

Using Heuristics

But, knowing about psychology, it is also these sorts of biases and heuristics that marketing experts love to exploit. To understand more on this subject then I recommend you read Daniel Kahneman’s acclaimed book ‘Thinking Fast and Slow‘. Kahneman is recognised as the world leader in understanding heuristics and bias.

As Kahneman demonstrates in his research, most decisions we make are actually unconscious ones. It would take too long to use a process or explore the pros and cons of every decision. We can risk paralysis by analysis if we spend too much time on a decision, as we can become overloaded by information.

Some decisions are relatively unimportant. This could include choosing which clothes to wear, what to eat for lunch or what to watch on television. For these decisions, simple heuristics – even flipping a coin or rolling dice – can be effective.

Some decisions are much more important, such as the choice of spouse, partner, career or work. Similarly, large purchases, such as buying a property, are significant decisions. We instinctively know that we should take more time and effort over the more important decisions. The problem is that we do not necessarily understand how we make decisions. Nor do we have the tools to help us make the best choice. So how can we do it better?

How do we make decisions?

What was the last big decision you made and how did you make it?

We often think of decision making as a rational process where we engage our logic to solve a problem. But decision making is actually not just problem analysis (although they are linked). Also, a lot of decision making is influenced more by emotion than by logic.

This is not necessarily a bad thing. Our emotions are very important and employing them does not necessarily make a choice irrational. Emotions and passions are connected to our experiences, preferences and values.

If we were purely rational we would operate according to Rational Choice Theory. This means we would always make the choice that offers the best statistical chance of success or reward. However various scientific studies have shown that this is not the case. We are not purely rational and can be heavily influenced, by ourselves, others and circumstances to make quite irrational decisions.

The psychology of decision-making

People don’t realise that they often influence and even fool themselves. Hugo Mercier and Dan Sperber published a paper in 2011 that concluded we use our reason and logic, not to get to the truth or to make good decisions, but primarily to strengthen our position and persuade other people that we are right. This is confirmation bias, where we selectively choose data that supports our decision. This is just one example of cognitive bias.

Our circumstances also play a large part in our decision making especially if we are in stressful conditions. At the extreme level, we could be affected by the ‘fight, flight or freeze’ responses first outlined by Walter Bradford Cannon. These physiological responses have a direct influence on our psychology and may even completely override our conscious decision-making capacity.

Other people can also bias our decisions. This could be simple peer pressure or more manipulative influence employed by an individual. Our psychology can be exploited. As mentioned earlier, salespeople used have long understood this, hence strategies such as creating the idea of scarcity or advertising using subliminal suggestion and product placement.

The psychology of decision making is a fascinating and growing field. If you would like to dig deeper into the subject, take a look at ‘The top 10 books on decision-making and thinking.’

What is a decision making process?

Being aware of the influences we have is very important if we want to make good decisions. Decision-making processes can help us as they encourage us to take a step back from our situation and assess it more objectively. This will not eliminate bias but it will help.

Decision-making processes also seek to identify the stages needed to make a decision so we can follow through on a choice in a logical manner. One common breakdown of the steps is shown below:

The 7 steps to a decision-making process

1. Outline the goal or outcome/analyse the problem
2. Gather data/consider factors
3. Develop alternatives/courses of action
4. Consider the pros and cons of each alternative
5. Make the decision
6. Implement the decision/take action
7. Learn from the decision

To some level, most people apply a decision-making process at some time, even if they don’t call it by that name. Making a list of the pros and cons of a decision is one of the simplest and most common decision-making processes. Related to this is the setting of priorities or by reducing choices by process of elimination.

One process we employ is giving our decision making to people and things. Acquiescing responsibility for a decision, as we do to our elected politicians, or delegating decision making to subordinates is a decision making process. Flipping a coin is a way of acquiescing responsibility to fate or probability (depending upon your view of the world) whereas there is also an increasing array of software that we can also use to support our decision making, or even to make decisions for us.

Why are decision making processes important?

How much training have you had, specifically on decision-making?

Despite the importance of decision making and the general awareness of decision-making processes, very few organisations put much time and training into teaching people how to make better decisions. We gain a certain amount of critical thinking and problem analysis through our formal education but few people feel properly prepared to make important decisions in their work, especially when they may need to defend their position, demonstrate their rationale and persuade others to follow a decision.

Many existing processes within organisations support decision making. For example, a tender process, where bids from vendors are received and reviewed, is a decision-making process. This sort of selection process takes into account factors important to a contract, such as cost, quality and the track record of a company. Voting in a meeting is another simple process. It is a democratic heuristic, testing not only how people think or feel about an idea but also then putting pressure on others to support a decision once votes are cast.

Teaching decision making

But few people – including leaders – are taught decision-making skills that can be used more generally. There are a few institutions that have recognised the importance of teaching tools and processes to their decision-makers, in order to equip them to make informed choices. The military and the medical profession are key examples of this. This is because those with responsibility in these professions are dealing with life and death decisions, often made under highly stressful and emotionally charged situations. In these careers, where people are held accountable for such weighty choices it is no surprise that a lot of thinking has gone into good decision making.

The Military Decision Making Process of the United States Army) and the UK Military Combat Estimate Process (known as the Seven Questions are examples of these sorts of tools that share much in common and reflect the seven steps outlined above.

But the challenge I bring to leaders in all walks of life is this: even if a decision you make is not likely to be life or death, it can still radically affect the quality of people’s lives, as well as the success and profitability of an organisation. So is it any less important to make good decisions in other spheres of work?

What decision making processes are there to use?

The good news is, that even if you have not had formal decision-making training, there is help available. There are plenty of robust decision-making processes and tools around, it is just choosing the best one for you, your team and your situation.

A good starting point is understanding decision making at its most basic and for this I would recommend looking at the OODA loop. OODA stands for ‘Observe, Orientate, Decide, Act’ and you can learn more about it in my post on ‘The OODA Loop Decision Making Cycle.’

My experience as a Bomb Disposal Officer, leadership coach and management consultant led me to develop my own decision-making process that I dubbed ‘The Right Questions’. This is a simple tool that uses the interrogative words of the English language as prompts for the steps you need to take and questions you need to ask when making decisions. You can find out more by reading ‘The Right Questions Framework Guide.‘

Is decision making just for leaders?

Decision making is becoming of increasing importance to those not in traditional leadership roles. Organisations are becoming less hierarchical in structure and in today’s fluid and fast moving work place the best employees are those who can take the initiative, make and act upon good decisions. 

Therefore everyone can benefit from understanding more about the way we make decisions and from learning simple decision making processes.

And as we have seen, good decision making is not just important in the work place. We all have to make decisions that affect the direction of our lives. This is why as a coach I have found that processes, such as The Right Questions, can be equally as helpful in exploring the bigger questions of life.

Where are you heading? What do you want to achieve? How are you planning to get there?

If you are interest in exploring these questions at a personal level then just subscribe to my newsletter and you will get a free goal setting workbook and personal action plan. Just sign up here!

Taking things further

You may want also want some help, improving your decision-making and becoming more effective at achieving your goals. I have the pleasure of seeing amazing, positive, transformations in the individuals and organisations I work with. If you would like some assistance too, in person or online, then please do drop me a line. You can email me via the contact page.

I look forward to hearing from you!

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