Which begs the question, does every decision need lengthy decision-making procedures?
Proceed through the video lesson to learn more.
Once you’re through watching the video, please attempt the quiz questions at the very bottom of the page.
Does Every Decision Need Such Lengthy Procedures?
Now, you may not always be faced with situations like Komal’s, but situations that require a systematic approach to decision making are many.
Here are day-to-day decisions where careful consideration is called for, and where off-the-cuff or biased decisions could prove sub-par, if not disastrous:
1. Where the complexity is high
Should one trim one’s product portfolio or diversify further? Should one go niche or mass market with one’s marketing strategy? Is downsizing one’s workforce or absorbing losses for the short-term a better tactic to deal with poor revenues? Such decisions, which involve trade-offs, with multiple pros and cons that could have serious repercussions require serious thought to be attached to it and call for a structured means of making decisions.
2. High-risk consequences –
Consider a situation where you have a medium-term financial goal to meet. You are confronted with the decision of finding a suitable financial instrument to park excess funds in that will provide the desired yields to meet that goal.
You are confronted with a multiplicity of investment instruments to choose between, and devoid of an objective means of finding the appropriate instrument, you will let your past experiences, biases and/ or pet financial instruments drive your decision. These may not always be the best instrument that you could have chosen, and might not give you the returns that you require, thereby compromising your financial goal.
3. Where Multiple Alternatives Exist
There may be various options, each with its set of uncertainties and consequences. For instance, if a senior position is to be filled in, you may have to decide whom to promote from among the existing team or if you should hire from outside. Such situations require careful considerations of the alternatives available.
4. The Decision Could Have Serious Repercussions
Say you are part of the Risk & Compliance team, which is deliberating whether changes are required to a process. Now imagine that this decision, while ensuring better compliance to company norms, will significantly increases the amount of work for employees. One cannot, as important and tempting as it may be, make such decisions in haste. “It’s company policy” may be your justification for the decision. However, this might result in resentment, as well adverse impacts on people’s performance. Such situations require careful consideration.
Conclusion
In summary, the biggest risk in decision making is to get trapped in binary, ‘either-or’ thinking or being driven by emotions or perceptions. The FAMe approach will eliminate such limitations and lead you to better decision making.
Now that we’ve completed this lesson, please take the quiz below.
