7 Steps to Improve Decision Making
October 27, 1995
I came across the following article on how to improve decision making. It was
written for engineering managers, but I believe it should be applicable to all
The typical engineering department manager makes hundreds of important decisions
each year. Most of them can be made an the spot, as engineering managers follow
precedents or instinct when making assignments, reviewing completed tasks,
planning next projects, or handling personnel matters. Such instant judgments
are firmly based an managers' knowledge of what works in their companies and with
their staffs. Yet, as engineers gain broader responsibilities in their
organization, this "spontaneous" style of decision making must give way to a more
deliberate and disciplined approach.
Why? The higher up one goes in the organization, the more the decisions are made
in areas where there are no clear precedents.
In an attempt to acquaint readers with an effective procedure for making such
decisions, the accompanying seven-step program, based an the recommendations of
Thomas Faranda, of Faranda Associates, Phoenix, Ariz is provided. Engineering
managers can use this template each time they must make a decision for which
there is no known precedent.
"It's important to have a disciplined process with five to fifteen steps you
follow each time you make a major decision," Faranda advises. "This way, you'11
make better choices, as well as gradually build an your skills as a decision
Faranda's template can be viewed as basic but in decision making this simplicity
is a virtue. As Faranda explains, "What managers need is a uniform approach to
their decisions that touches all the bases and avoids any potential oversights."
Through the consistent practice and application of the seven-step program, the
approach eventually will become automatic and the engineering manager will begin
to feel confident in the decision-making process, even when deciding the tough
The Management Decision-Making Process
1. Define the problem.
a. Find out what the problem really is.
2. Analyze the problem.
b. Remembering the old axiom: "Nothing is as useless as the right answer to the
c. Defining the problem correctly takes more time at first, but saves time in
the decision process.
a. Gather all possible facts surrounding the problem. Then separate relevant
facts based on your definition of the problem.
b. Be fair and objective in gathering and examining the facts. Try to eliminate
opinions, biases, and preconceived ideas.
c. Consider tangible and intangible factors.
Tangible: time, cost, facts. Intangible: reputation, morale, personal bias.
3. Develop alternatives.
a. List all possible alternatives – routine as well as unusual. Be creative and
innovative. Don't ignore routine alternatives, but don't get stuck on them
b. Do not try to decide if the alternative is good or bad at this point.
c. If none seem desirable, chose the one that is the least undesirable.
4. Evaluate alternatives.
a. Each should be subjected to evaluation based an these decision questions:
5. Select an alternative.
o Will the decision help us reach our objectives'?
b. Consider the evaluation factors of risk, resources, and research.
o Is the decision time- and cost-effective‘?
o Do we have the resources to implement the decision?
o Are there negative consequences of the decision that will haunt and hurt
Risk: All decisions have risk. Estimate and quantify the risk on the basis
of success/failure potential (that is, 90%, 80%, 20%, 30%, 70%).
Resources: Look at the availability of your facilities, equipment, labor,
time, and budget. Estimate which decision provides the "most for the least."
Research: Check past decisions and their results. Remember that every
problem is somewhat different in a different time frame...even once-successful
past decisions may be poor choices now.
6. Implement the decision.
(1) A supervisor's experiences are invaluable, especially with routine or
b. Educated guess versus gut feeling.
(2) Experience can be misleading if you forget to compare current with past
(1) An experienced person's educated guess is a valid decision factor, if it
is based an general experience and possibly on specific experience with this type
of problem or decision.
c. Mental stimulation.
(2) Listen to your educated guess, but do not let it stop you from utilizing
other decision possibilities.
(1) Take your list of alternatives and isolate yourself. Assume that
alternative #1 has been chosen and stimulate the results and consequences of that
action. Review the positives and negatives from that decision.
(2) Do this for every alternative. Think them through. Think how be they
will be received by the people above and below you.
(1) Scientific decision making is now possible. Computers can store, sort,
and prioritize information for easier decision making.
e. Process of elimination.
(2) Remember that these are tools. You are the mechanic. The decision is
(1) Review alternatives against these criteria:
f. Do-nothing solution.
o company policy and procedure. If the decision conflicts, consider
eliminating it unless you have the position and power to allow you to bend or
break the rules.
(2) After processing, the manager has to make the decision based on the best
information available and an his or her style of management, communication, and
o Logic and common sense. Even creative alternatives must meet this
criteria. Think about how your decision will be received by others – they should
see the sense of your choice.
o Time, cost, and budget limits. If your alternative does not fit into
these limitations, your choice will be a poor one.
(1) A decision to do nothing is a decision if it is arrived at by using the
(2) When managers fail to make a decision, they are derelict in their duty.
Doing nothing is not a decision.
a. A decision must be converted into action.
(1) The selected alternatives must be executed in a manner that promotes the
success of the decision.
b. Effective communication is the key to implementation.
(2) Objectives must be clear; tasks must be assigned and accepted.
(1) Communicate immediately with two groups: first, those responsible for
implementation; second, those affected by the decision.
c. Get people involved and committed to the decision.
(2) Continued communication is crucial to answer questions and solve
problems that arise from the decision. Make sure you are available when problems
arise that need answers.
(1) If people have participated in a decision, they accept it as their own
and try to ensure that it works.
(2) Committed people will cover your small errors by finding creative
7. Follow up and check results.
a. A decision is not complete unless follow-up is utilized to check up an the
results and consequences.
b. Follow-up provides feedback and demonstrates the continuing cycle of the
c. Learn from your mistakes as well as your successes.
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