Top 10 Decision Making Tools for Business in 2021

Making a good decision is critical to every entrepreneur's journey and is vital to every business's success and well-being. Effective decision-making involves first identifying a goal, gathering the relevant and necessary information, and weighing the alternatives before deciding. The process sounds very simple; however, most businesses tend to overlook the risks and consequences that occur after making important business decisions. There are several benefits to making good decisions. Good decisions tend to last longer as they consider the company holistically. Both external and internal factors that are directly affected by the decision need to be weighed equally before making the decision. With transparency and stakeholder buy-in during the decision-making process, conflicts of interest are far less likely. This keeps the organization free of churns and on track and focused.

Following a regulated process with specified steps can help businesses ( https://www.yourretailcoach.africa/services/business-model-development/ ) make more informed decisions. Here we put down some effective decision-making techniques you can employ to make flawless and holistic decisions:

· Take a Process-Oriented Approach – One of the primary functions of decision-making is to leverage organizational processes to accomplish goals and produce results. When trying to establish a decision, the first step should be to frame the issues at hand and ensure the right questions are being asked and everyone agrees with what needs to be done. From there, it would be much easier to manage team/group dynamics to analyze the problem and craft a viable solution.

· Involve your team in the process – One way to stimulate creative decision-making is to involve your team members in the process to invite multiple points of view. Decision-making becomes highly effective when it pools an individual's collective knowledge and experience in the process, helping innovative solutions and hidden biases to surface.

· Foster a Collaborative Mindset – An inquiry mindset views the decision-making process as an opportunity to collaborate and evoke creative problem-solving. It centres on individuals testing and evaluating assumptions by presenting balanced arguments, considering alternatives, and being open to constructive criticism.

· Reiterate Goals and Purpose of the decision – It is important to articulate and document the goals that you are working towards at the outset of the decision-making process to ensure the team stays aligned and motivated and understands how their investment in the process to tie into the larger objectives.

The decision-making technique helps businesses to find the solution to a problem by exploring and outweighing the different options that are available and selecting the best alternative out of them. These decision-making tools will help you accelerate the process by disintegrating each step of the process. Here is a list of top decision-making tools:

SWOT Diagram

SWOT represents Strengths, Weaknesses, Opportunities, and Threats. It is one of the basic management guides for strategic planning that helps you identify a company's inner strengths and weaknesses of your organization and reminds you to watch out for external opportunities and threats. It can help you determine the forces that influence a particular strategy, action, or initiative, which can be useful to support your business decisions. SWOT-analysis helps entrepreneurs look at a company's weaknesses from a new perspective and implement strategies to turn them into strengths. You can also use this tool to analyze the strengths, weaknesses, threats, and opportunities aligned to your different alternatives during decision-making. When you enlist the help of your team members and take a collaborative approach, it becomes easier to spot the trends, patterns, and connections between these four quadrants offering deeper insights than you may not have been able to drive alone.

Decision-Making Diagram

These are graphs that enable you to draw out the decisions you have taken. It is one of the best tools to map out consequential actions based on outcomes and risks. The decision-making diagram helps you see all the alternatives to your decision-making and chart out associated costs and even chances of success and failure. This is useful for statistical analysis and planning team strategy.

Decision Matrix

This matrix helps bring clarity to your table when you are dealing with multiple business decisions and/or business problems. This will help you critically analyze and weigh the different available options and alternatives.

Pareto Analysis

This is a decision-making method based on the 80/20 rule meaning, 20% of action drives 80% of the results. This is mainly used for the prioritization of consequential changes or decisions when many decisions are made and helps in determining which will have the greatest impact. This allows decision-makers to dedicate energy and resources to what will make the needle move in the business first. It typically contains both line and bar graphs where the cumulative total is represented by a line and individual bars represent bars in descending order.

Cause and Effect or Ishikawa Diagram
It is also called a fishbone diagram as it looks like a fishbone. The bones capture all the possible causes of a particular issue, by category. Each category is a bone of the fish. The outcome is represented by the fish's head. This diagram helps you spot the exact causes of an issue and is commonly employed for product design or quality issues. It is a visual brainstorming tool used to spark more ideas on a cause/effect issue but can get very clustered and difficult to identify interrelationships or patterns between causes.

Strategy Map

This is very useful during the planning process of a business ( https://www.yourretailcoach.africa/services/business-plan-development/ ) and used to review strategic business goals during periodic check-in and review meetings. Strategic maps facilitate important conversations about long-term goals and objectives and the changes required at the organizational level for the growth and prosperity of the business. This may help leaders make important decisions regarding resource requirements for a specific function, effectively deploying people, guiding effective executions of activities and processes, and optimizing relationships that support long-term strategic goals.

Force-Field Analysis

This is the most effective tool to examine your project, forcing you to look at factors that influence a particular situation. It helps identify and analyze the forces for and against the change or implementation of a proposed solution. This will help you go through the pros and cons and make the right call in an informed manner. To carry out a force field analysis, you must first describe the problem or issue on a paper or whiteboard and then list out all the forces for a change on the right side, and all the forces against a change on the right side. You can then score each of the factors. Adding up the scores against each column will help you decide whether you need to move forward with the solution or not.

Break-Even Analysis

This is the most common tool use to decide at what stage of the business will become profitable. It calculates the number of products or services you would need to sell to cover your costs and yield profits.

Marginal Analysis

This type of analysis helps decision-makers weigh the outputs of activity or solution against costs. It helps in determining the activity that would yield the maximum return on investments (ROI). It is an optimal decision-making tool as it considers the preferences, resources, and informational constraints of a particular activity or solution that helps decision-makers make the right choices considering all this information.

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