Question: In my small business, I'm OK with the technical aspects and pretty good with selling, but I'm not a trained manager. My decision-making skills are a bit weak and I tend to shoot from the hip. Are there some basic decision-making skills I could learn?
Answer: Yes there are, and you'll be happy to find out that the basics are pretty easy to add to your toolkit. Let's talk about this.
For starters, take a look at exactly what types of decisions you need to make. Are these routine day-to-day stuff, or are they huge, make-or-break issues?
Let's define three categories of decisions. The first group includes the normal, everyday ho-hum business issues and matters. You probably do this many times a day. For example, maybe it's time to replace a $100 printer, or meet with a new sales rep, or upgrade your website. Depending on the size of your business, these may be decisions you can make, and then delegate the implementation to others.
At the other extreme is a category of very complex decisions. Here is where the stakes are high; in some cases you might even be "betting the company." Examples: moving your business to a new location, taking in a new business partner, or making a major change in a core product or service. For these biggies, there are numerous technical and quantitative ways to gather and analyze data, and crunch the numbers.
For today, we'll focus on decisions in the middle group. These are the medium-importance decisions with some long-term impact, but they don't risk breaking the bank. A few examples include setting the marketing budget for next year, evaluating whether you need a new delivery van, or choosing how to best roll out a new product or service.
In making these decisions, it's best if you have an advisory board. This is much less formal than a board of directors. Typically, your advisors might be a group of four or five people with relevant business experience. They bring an outside perspective and a bit of "been there, done that" confidence.
Good choices for your board might include a trusted mentor, a SCORE counselor, a retired banker or financial manager, or college faculty. Look for people who have technical or administrative knowledge in areas where you are weakest. Be aware that your commercial loan officer may not be willing to serve on your advisory panel, due to concern about "lender liability" exposure. But he or she could recommend a colleague or other businessperson as an advisor.
Management decision-making, like many other complex processes, is best mastered by breaking it down into smaller parts. There are numerous ways to do this. If you Google "business decision model" you'll find everything from the very simple (basically, a coin flip) to the extremely complex (12-step methods, with lots of technical and statistical involvement).
Here's a fairly general method, using six steps to make effective decisions:
Define the objective. This should be in writing, and specific as to what the measurable outcome will be. Gather the team and get everyone in agreement on the goal. What would success look like? When will we see it? How will we measure it?
Research the facts. If you're evaluating an opportunity, what are the likely costs and benefits? If you're solving a problem, when did it start and what are some possible causes?
Generate some possible options and solutions. Here's where techniques like brainstorming and "what-if-we ..." are useful. Also, realize that some of your decisions will have legal and accounting implications. If you aren't sure where you stand, call your lawyer or accountant for guidance before you go further.
Narrow down to a few good alternatives. Explore these and choose the best one. For many managers, the toughest step is to close off information-gathering and move toward an actionable plan. This hesitation can lead to "analysis paralysis." For most businesses, a decision made promptly on good information is better than one made too late or not at all. "The perfect is the enemy of the good" (Voltaire).
Communicate your decision and take action. Make sure that everyone involved sees what's coming, and then implement the decision.
Evaluate the results, and modify your decision if needed. Be sure to include this important feedback step in your planning. In a very innovative business, you might hear the phrase "ready, fire, aim." This allows that your first shot might miss the mark.
This six-step method is easy to learn and flexible. Try it, and see if it helps you out.
Ask SCORE is prepared for The Bellingham Herald's Sunday Business section by Bob Dahms, a business counselor with the Bellingham chapter of SCORE. Submit questions for this column to Business Editor Dave Gallagher at dave.gallagher@bellinghamherald.com. To learn more about other small-business matters, contact the local SCORE chapter at 360-685-4259 to schedule an appointment. For details about the organization, visit SCORE.org.














