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Business Decision Making | Part 1


“We all make decisions, and our decisions make us!”

“Will our company structure support our projected growth?”

Consideration of this question might warrant a decision. As I coach business owners and leaders, a topic we must address is business decision-making. When Dynatech Corporation in Lebanon, PA faced serious financial challenges, I was asked to turn their fortunes around. We learned to make decisions with a systematic, rational system. A few months later the company was profitable and, in a couple of years, it was sold and the owner was able to realize his dreams.

There are few skills that will further your success like effective business decision-making! This is my proven six-step process for making effective decisions. The six corresponding examples make up one decision.

Step One: State the Decision

You must state a decision in an accurate, crystal-clear manner. Are you addressing a challenge or an opportunity? What appears at first glance to be a major issue might be an opportunity to resolve an old issue and move your company past a plateau. This is a good time to be alone and get metacognitive, thinking about your thinking.

Ensure you know the root cause of the decision. I coached a business owner who chased a customer service issue for almost a year, only to have me inform him the issue was in his operational systems. His decision changed from training and terminations caused by poor service to selecting a CRM system to resolve his operational workflow issues. Business leaders cannot afford to treat symptoms; they must treat the disease, and this starts with stating the decision. Restate as many times as needed to establish absolute clarity.

Example 1 of 6: “I must decide whether to combine the marketing and sales teams into one business development function.”

Step Two: Frame the Decision

Framing is what one might expect, mentally looking through a series of window frames to ensure you analyze your decision well. While this is usually done in the mind, I remember taking a mentee company president by the arm and walking her window to window in her office. After she identified her frames as the functions of her business–operations, marketing, sales, finance, and human resources (H/R)–we looked through those five different frames while only considering the perspective of that function. I knew she understood the value when she was looking through the human resources window frame and realized H/R was a much more important consideration than she had realized. When we zoom in to each of our selected frames, we see our decisions differently and equity improves.

Example 2 of 6: “How we would communicate this reorganization will impact the success, so human resources and a personal touch must mediate the sensitivity of the initial impact.”

Step Three: List the Alternatives

If you have others who can assist you here, use them. There may be options you are not considering, and your trusted advisors might see something you miss. A friend asked me about buying new versus used cars. When I asked about keeping the car he had, he admitted he had not considered this option since he “decided” to upgrade. When we looked at market timing and options like Uber, he doubled his list of alternatives.

Example 3 of 6: “I could (a) combine sales and marketing as business development, (b) make no changes, (c) or add the infamous dotted line between them.”

Step Four: Bias Check

We all know there is a wealth of cognitive biases poised to limit our ability to make successful decisions. These biases include:

· Confirmation bias:      I see and embrace facts that support my instincts

· Halo bias:                    People on my ‘rock star list’ can do little wrong

· Presentation bias:       Favoring how the data is presented over the data itself

… any other of the dozens of cognitive biases

Recommended reading on biases:

Dwyer, C. (2022, July 1). 12 Common Biases That Affect How We Make Everyday Decisions | Psychology Today. Psychology Today;

Biases are the enemy of rational decision-making. Avoid them at all costs, asking your trusted advisers to be candid with you in identifying the biases to which you are most vulnerable.

Example 4 of 6: “I know I am susceptible to confirmation bias. Am I influenced by reading about another company making this change?”

Step Five: Filter the Decision

This is a quick and easy method to ensure your preferred alternative(s) is free of traps. I run my leading solution through a quick series of checkpoints, ensuring it is safe. Here is my filter, but please create your own if desired:

1.     Precedent:                  Would this decision set a dangerous precedent?

2.     Risks:                           Are there any unacceptable risks in this decision?

3.     Implications:               Could this decision create some hidden, downstream issues?

4.     Core Values:                Would this decision compromise our/my stated values?

5.     Collaboration:             Have I consulted all appropriate advisors?

6.     Know:                          Who would need to know about this change before roll-out?

7.     Safety:                         Is anyone put at risk by this decision?

It is not uncommon for my clients to use their own business or personal core values as an acceptable and effective decision filter.

Recommended reading on values-based decision-making:

Iltis, Ana Smith (2005). Values-based decision making: Organizational mission and integrity. HEC Forum 17 (1):6-17.

Example 5 of 6: “I’m concerned one implication of this decision would be a desire to also combine Product Line Management into Business Development, necessitating another reorganization down the road.”

Step Six: Decide!

As you finalize your decision, take comfort in your effort to make this a rational process. Record your experience in your journal so you can analyze what worked well in the years ahead. Well done; you used a process to make a wise and successful decision!

Example 6 of 6: “We’re going to (a) step back, (b) restate our decision as: Is it time to reorganize, creating a more traditional and synergistic Business Development function consisting of Product Line Management, Marketing, and Sales?”, and (c) repeat this six-step process.

Conclusion: There was no rushing into an emotional, biased decision so we were able to see further “around the corner”, anticipate another option, and start the rational process of analyzing this redefined decision.