The Impact of Decision Making on Your Business

Leave early or stay late? Wear a suit, or dress more casual? Keep that document on your desk, or file it in the pending folder? The number of decisions -- conscious or automatic -- we make every day is astounding, when you think about it.

It becomes very complicated when our decisions intersect those of others. That's where the expression right place, right time comes in.

Multiply all the other places (that may or may not be right) by the number of times (that may or may not be right) you're called to choose in social networks. What to post, when to post it, whether to respond, etc. compounded by the intended or unintended consequences of those posts in the tweets and forwards or likes of others.

Do you say the same thing many times? How many? Has everyone heard or seen you? What are the next steps?

Decision-making is a mental process

One that has consequences. An output of this process in social networks includes considerations about disclosure and trust: If disclosure is an expression of trust, it is also a creator of trust. In addition to it being a guideline enforced by the FTC.

At a personal level, the actions we choose and the opinions we share are influenced by biases, emotions, reason, and even memories. In business, we'd like to think all our decisions are made rationally after weighing pros and cons. We know better, though.

In many organizations, and not necessarily only large ones, decisions are made by committee. When biases and agendas diverge, the process is not that smooth and may result in poor trade (as in not keeping your promises).

Making good decisions

This is a very broad topic, of course. The impact of the decisions we make -- and those we don't make -- depends on several variables.

What constitutes a good decision? Why do you need to make one in the first place? How much information do you need? What's the cost of being wrong and the upside of being right? 

Some situations that have the most impact on your business are:

Making hiring decisions

This is where having a buy strategy will help you. When companies write or say that people are their number one asset, they're saying it literally -- they can trade people. Think about individual stars, for example. Stay with me here, I know it's tempting to debate that statement. We have different ground to cover.

Opinions on making good hiring decisions vary wildly. There are as many as types of leaders, or investors, involved in a business. Some sample considerations that come to mind:

• Are you a startup looking to bootstrap? Who should you have on board? 
• Is your startup looking to scale quickly? Who's the critical A-player to help with that?
• Does your agency need a full time person, or should they hire a consultant to ramp up their social media capabilities?
• Does that department need to fill a slot, or should they look for a person and then design the job around their skills/talent?
• Which critical skill/experience is missing at the top that needs to be there to grow the business?
• Should you farm the search out and what are the skills/experience of the search firm or headhunter?
• Should you change your mind about a candidate when your conditions change? I added this one, because I've seen many a decision maker or leader let their initial gut rection or ego get in the way of making a better trade later

Deciding who is a customer

Probably the second highest cost of a business after its employees is its customers. There's a cost associated with making the first trade with people and turning them into buyers. And there is a (potentially) smaller cost of turning those buyers into customers.

A few considerations:

• What's your cost per lead?
• How many of those leads become buyers?
• How many of those buyers become customers? (i.e. buy again)
• What's your attrition or cancellation rate? Here's an example of a deep dive for SaaS
• What's you cost to keep a customer? What are you getting in return as a business?
• Are you closing the gap between what you promised and what was delivered? There is a cost associated with higher brand dissonance

Deciding your query set

Besides the actual production costs if you have a product, in which case you need to weigh in economies of scale for distribution, marketing costs, etc., probably the third decision that has the most impact on your business centers around the query set.

Data is a business asset in and of itself. Without data, you don't have feedback, which is also something that is critical to your business. And there is the question of how you collect good data that matters.

For example, you can use strong attractors like good communication, what we call content in social media, dynamic communication, or what I call conversation, with a wide audience, or advocates. However you get the data, it is how you analyze it, or the query set that makes it most valuable.

So you have input data, derivative data, and you have query sets.

This then goes back to my model of influence and understanding what to look for, what to add, and whether you even understand the importance of analytics (listening, observing) and how this is linked to feedback on what you shoud stop doing or start doing.

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Hopefully this post on how to identify critical areas of impact to your business will get you thinking more clearly about the decision making process so you can be more effective.

 

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Comments

[Brian Driggs]

There is a lot to think about after this one.

Firstly, I suspect I am guilty of saying the same thing many times. Of course, I feel like very few people (at large) are listening, er, hearing what I've been trying to say, but what are the next steps? Methinks making bolder promises, delivering the goods, and sharing the results.

The decision-making bit is always good food for thought. There is so much committee-based leadership, which often feels like vapid, condescension - a transference of the committee's own frustration with the process.

I think, before we make promises to our customers, we need to make promises to ourselves. This is where we're headed, this is what it will look like, and this is how open we are to adapt that vision.

[Valeria Maltoni]

the first barrier is the conversation that is going on in the heads of the people you're talking with. In my experience, a whisper and a smaller step go a longer way. Make the promises you intend to keep - you're not on anyone else karma program. Accountability starts with self first. It's so easy for people to demand and feel entitled to the results of others who are not carrying their load... or keeping their own promises (if they make any). Food for thought.

[Pam Broder]

Wow.. Valeria seems to have this thing down. Have you every heard of coachquestleader.com Some of the things you've mentioned remind by of a course I had through this group.