Decision Making Process

In any company or business, there is a process for making decisions. It may not be a formal or rigid process, or perhaps not a very complex process, but it exists. For example, a decision to switch brands of coffee might be made by Joe, who is the one who stocks the kitchen. A decision to spend $25,000 on Search Engine Optimization might require that the entire company (all 7 workers) sit down and discuss. Regardless, the process is there.

The question small business owners need to ask is whether their decision making process works. The answer is rarely a simple yes or no. The following is intended to show the impact of a good or bad decision making process, and why it is in your best interest to develop a good process.

There are several issues to be aware of when looking at any decision:

  • The impact to your business image and its ability to function. A $25 expenditure for coffee will be unlikely to change how your business is perceived, while a $25,000 investment in SEO can change your image and will affect your cash flow.
  • The trust you place in your workers. If your workers have a vested interest in your business, which most workers do to at least some extent, they will likely want to be able to provide input to some of the decisions that are made.
  • The amount of executive power any one person has should be limited to prevent bad or heavily biased decisions. This can be done by requiring a review of all decisions, with the size of the review dependent on the scope of the decision.
  • The amount of time spent following the process relative to the significance of the decision. Spending 2 weeks deciding which brand of coffee to buy is a waste of time, spending 20 minutes deciding which SEO package to sign up for is not nearly enough time.
  • Your time spent making non-business-critical decisions relative to the time you spend working on your business at all should be minimal. If you want your business to grow, you need to learn to delegate and provide opportunity for others in your business to gain your trust.

In a good decision making process, you should aim to balance the four issues above. Keep the process minimal relative to the size of the decision, and avoid getting involved in the small decisions (but do keep aware of what the decisions are). By monitoring the small decisions your employees make, you provide the opportunity for them to gain your trust and open opportunity for you to delegate more of the non-business-critical decisions, which allows you to focus on growing your business.