Decision-making beyond the habit of managers is also one of the tools of their power or legitimacy. Many managers ‘decisions can be very costly, and overall managers’ survival and life depend on good or bad decisions. The range of short or large decisions puts a lot of stress on the manager and executive. Many decisions depend on their speed, in addition to being effective.
So we decided to look at a Harvard Review article in which Eric Larson, the founder of Web CloverP based on behavioral economics, describes the checklist. Decisions are quick. He is a graduate of MIT University and Harvard Business School with extensive executive experience.
Executives decide about three billion things annually, almost many of which can be better handled. The conditions are clear: decisions are the most powerful tool managers use to get things done. Targeting (as another tool) can also be inspiring, but decisions can lead to actions. Research shows that people do what they decide to do. Fortunately, there are many ways to make continuous decisions that are made using behavioral economics principles and technologies.
With a quarterly study of about 100 managers, it has been found that managers who make their decisions using the right principles achieved 90% of their expected results at the time, and 40% of the results. They have been beyond their expectations. (For comparison, correct targeting principles have helped managers achieve results in only about 30 percent of the time.) Other studies show that effective decision making can reduce the number of good business decisions to six. Increases the fold and reduces the failure rate by nearly half (fifty percent).
But although there are potentially very good conditions for applying the right principles to improve decision making, many organizations do not. In a study of a community of about 500 executives and executives, we found that on average, about 2 percent of them use the best principles for decision making, and few companies have systems for measuring and They have improved decision making over time.
To narrow the gap between action and the potential for application of the principles, we need to know why.
One of the reasons is rooted in history and history. Business decision making is more art than science. In fact, because most managers to date have had relative access to the right information to make decisions. The reason is probably due to the less widely used decision-making tools, or the list of advantages and disadvantages that Benjamin Franklin, known for nearly 250 years, has used. And the unstable conditions of the twentieth century were based on the theory that people make rational decisions when they have good information, thanks to the behavioral economics put forward by Daniel Kahn, who also won the Nobel Prize. It was rejected, completely rejected.
The next reason goes back to psychology. The fact is that we behave almost irrationally. Behavioral economists have identified a range of subjective and cognitive errors that cause errors in perception as well as in making the correct choices. Many business decisions are made in a collaborative manner, meaning that group thinking and consensus are a combination of individual judgment errors. In addition, we often resort to emotion and intuition to reduce our mental disruption. Decision-making is a difficult task and requires a strong emotional motivation to act.
The last reason is technology. For over 40 years, enterprise software has done many of the tasks of executives automatically. This transition has provided the foundation for better decision making, but many job tasks remain incomplete. Behavioral economics shows that preparing very complex and ambiguous information helps managers make less informed decisions. As a result, you will not see much improvement in business simply by implementing big data analytics from software such as SAP, Oracle or IBM.
But what is the solution?
During the development of the Cloverpop software product, which is a cloud solution using behavioral economics to make decisions, we conducted many experiments with thousands of decision makers. We conclude that the successful decision-making approach is summarized in a simple checklist. But we need to know that simply understanding these items is not enough and should be used effectively, because our glitches are not simply eliminated by knowing this checklist. Therefore, when you make a decision, using these steps can act as an effective error prevention tool:
1) List five of the company’s past goals or priorities that will influence decision making. Focusing on the importance of the subject will help you avoid being trapped in reasoning or reasoning about your choices after the fact.
2) Write alternatives at least three, or if possible four or more. It does take a bit of creativity and effort, but know that no exercise like expanding your choices will help improve decision making.
3) Write down the most important information you have lost or forgotten. We are at risk of ignoring what we do not know, and that is because of the loss of focus on what to do, especially in the present age when companies are rich in information.
4) Write down the impact that decision making can have in the next year. Storytelling of the expected outcome helps you find a similar scenario that gives you a better perspective.
5) Involve at least one team of two people in making the decision, but not more than six of the stakeholders. The more perspective helps reduce decision error, but the larger group reduces productivity.
6) Write down what has been decided and the reason for it. Also write about how much the team supports this decision. Writing these decisions increases commitment and provides the basis for measuring the decision.
7) Write a plan to follow the decision for a month or two. We often forget to look at decisions that go down the wrong path, and this will lose the opportunity to correct and learn from what has happened.
Our research shows that executives who have averaged these seven actions have saved at least 10 hours of debate and 10 decisions faster and increased their output output by 20%. We need a measurable approach to decision management to replace the historical theory of rational choice.