The Five Phases of Decision-Making – Part 2

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How well does your decision-making process work for you? Are you able to go from decision to solution to action with ease?

This is the second part of my two-part series on Peter Drucker’s five phases of decision-making, which he outlines in his book, The Practice of Management. If you missed the first part, which covers the first three phases, be sure to visit that post to read about them. Today’s post covers the last two phases, which are critical to the whole process.

Let’s dive in with #4.

4. Find the best solution
The next step is to identify the best solution. Rarely is there just one solution, but the task is to narrow the alternatives down to the best one. He poses four criteria to pick the best solution among the options you’ve developed:

  • Risk. Weigh the risk for each solution against expected gains. As Drucker says: There is no riskless action nor even riskless non-action. But what matters most is neither the expected gain nor the anticipated risk but the ratio between them.
  • Economy of effort. Which action gives ethe greatest results with the least effort and effect the change with the least disruption to the business. Drucker notes: Far too many managers pick an elephant gun to chase sparrows. Too many others use slingshots against forty-ton tanks.
  • Timing. If the decision is an urgent one, pick a course of action that lets everyone in the company know that something important is happening. The opposite is also true. If the decision has no urgency and is slow to execute, the best solution probably sits on the less urgent end of the spectrum. Drucker’s advice here is: Whenever managers must change their vision to accomplish something new, it is best to be ambitious, to present to them the big view, the completed program, the ultimate aim. Whenever they have to change their habits it may be best to take one step at a time, to start slowly and modestly, to do no more at first than is absolutely necessary.
  • Limitation of resources. The most important resource to consider is the people who will be executing the solution/decision. Also make sure that they have the vision, competence, skill, and understand to take the required action. Does the organization have the right people and the means to carry out the solution? Don’t select the wrong solution because you don’t have the right resources. His parting thoughts on this criterion: It is not solving a problem to find a solution that works on paper but fails in practice because the human resources to carry it out are not available or are not in the place where they are needed.


5. Convert the decision into effective action
This is my favorite phase. This is one that escapes so many. So much time is spent on listening, analyzing, decision-making, contemplating, gaining buy-in and adoption, etc. that we’re too exhausted or overwhelmed (or simply over it, i.e., inaction sounds like the best action) to actually execute, to act, to implement the change. Drucker says it best: For a solution to become a decision, action is needed.

How do we convert a decision to action? Make sure everyone understands what change or change in behavior is required or expected of not only them but also others with whom they interact. Drucker  notes that motivating people to adopt these new behaviors requires them to feel like they own the decision or they were involved in making the decision. They don’t have to be involved in the early stages of information gathering, but they should be involved in the development of alternative solutions. Drucker believes that if they’re involved, the solutions may be richer because they have other perspectives and experiences that the decision-making manager does not have.

This is why we often talk about buy-in, adoption, grassroots efforts early on and why we say that it’s best to not force change on employees but to involve them in the decision so that they feel a part of it. I wrote a while back: The bottom line is that when people are involved or know how and why they are involved, they’re more likely to step up, commit, and help ensure you have the resources you need for success. If you force this on them, they’ll probably push back.

Go and make it happen!

Whenever you see a successful business, someone once made a courageous decision. -Peter Drucker

Read the original post here.