Every problem has a solution you just need to make a good decision for that problem. Decision making is a tough situation for someone, some people are not good at decision making and they don’t have any idea about how to make decisions. So here I give you some tips about how to make good decisions. Check this out.
WHAT’S IN IT
- How To Make Decisions Using Decision Cycle?
- How To Make Decisions Between Two Options?
- Decision Tree
- How To Make Decisions For Business?
- How To Make Quick Decisions?
How To Make Decisions Using Decision Cycle?
Decision cycle is steps of actions on a repeated basis, which helps you to make the best decision. There are lots of decision cycles available in the world for different kinds of fields. Every field uses different kinds of decision cycles. Means, a research basis decision cycle is not useful for making your personal life decisions or managerial decision cycle is not helpful to you to make decisions for doing any research.
So, for using the decision cycle first you need to understand which field is your or to understand which decision cycle is fit for your scenarios.
Some decision cycles examples
PDCA stands for Plan-Do-Check-Act. You can use this technique for choosing big decisions in your life. You can also use this cycle for business decisions but you have to understand your problem first.
OODA stands for Observe-Orient-Decide-Act. This technique is mostly used by militants in war situations. This technique is developed by Air force retired Colonel John Boyd. He also uses this technique in aerial combat.
3. Herbert Simon model
The Herbert Simon model is also a decision-making model. This model is used by management; you can also use this technique for daily life problems.
4. Scientific method
This method is used by scientists for doing research.
To understand this decision cycle in detailed click here.
How To Make Decisions Between Two Options?
People are always confused between two options. It is very difficult to choose one option between the two. But if you think deeply about both options then you can realise it’s not hard. Mostly in this situation, you are confused when both the choices are equally right for you. So in this situation, it is harder to make a choice.
So, how to choose between two options? In this situation, you have to accept the option which is favourable for you and reject the option which is unfavourable for you. Now you say everybody knows that favourable and which is unfavourable for you. So your choice should be based on what is your Goal Statement?
Just ask this question for you when you’re confused between two options, you will get your favourable option. Choosing between two options, identify which option is helping you to make a path for your Goal Statement.
What is a Decision Tree?
A decision tree is a diagram, which looks like a tree used to determine a course of actions, every branch of the tree represents the possible situations. This also helps you make choices. A decision tree is very simple to understand and visualise. It shows what is going on. For making a decision tree you have to make a little effort for data preparation. It can handle both numerical and categorical data.
How to create a decision tree
Using an example now we understand how to make a decision tree.
Example of a decision tree
A new company is formed, which gives loans to the public, now they want to do marketing, but they don’t have any idea about their target audience. To find out the target audience of that company using a decision tree.
From the above diagram, we categorized our audience in ages below 20, 20-50 and 50+. So from the first branch, we understand, up to 20 age, only 1% of people are taking a loan. In the 20-50 age range, 40% of people take a loan and above the 50 age, only 5% of people take a loan. From this basis now we are targeting 20-50 age groups.
So, two parts happen again in 20-50 age people, which is married and unmarried. In this branch, we understand 55% of married people take most loans and only 15% of unmarried people take a loan.
There are also two categories happening in married people, that is which have kids and which one has not kidding. The 75% married and which have kids take a loan and only 25% married which don’t have kids take a loan.
So, from the above diagram, we understand our audience, which is 20-50 age people who are married and having kids.
How To Make Decisions For Business?
Business choices are always complicated for a manager to make perfect choices. There are always ups and downs in business and you have to tackle every situation in the proper way using the best choice. But, there are lots of techniques available in the market for business problems, you can also use those techniques. There are not any particular steps available in the world which can give you 100% result in decision making, but at least you have to use those steps in business just to understand the way of problem solutions.
Steps of business decisions
1. Understand your Goal or Vision statement
Every company or business has their own goals or vision. For making every choice, first, you have to understand your goals or vision and then take an important choice of business which can help you to reach our goals or your vision.
2. Gather useful information
After understanding your problem you have to collect all information about that problem which can help you to solve problems. You can also consider your team and collect information from those. This research technique takes a lot of time to collect information because this is the base of your problem solution.
3. Choose relevant options
After collecting all information you have to analyse the whole information and understand which information is helpful to you to make a choice. So you have to collect all options which helps you to solve a problem.
4. Make a decision
From those options, now you have to select the best option which can solve your problem. In this stage again you have to understand your goal or vision and then make a choice.
After making a choice, apply them on problems.
How To Make Quick Decisions?
In this 21st century, everyone wants a quick result in their life. There is not any concept available which can help you to make quick choices. You can make quick choices about your daily problem like what to wear today? Which movie should I watch today?
But in other kinds of problems, you can make quick choices but you have to think about it and it takes time. So, how to make a quick choice.
For taking a quick choice you have to understand the best situation and worst situation of all options that you have. If you have two options then understand the best and worst situation of both options. If you are ready for both situations of one option then choose that option. And, if you are not ready for both scenarios or you are ready for good and not ready for bad situations then don’t accept it.
Let’s take an example
Should I join a corporate job or start a new business? This is a question, so let’s understand this problem.
So, if you choose yes, what is the best scenario of that option; you can live your whole life easier and what is the worst-case scenario of this; every day you have to work hard and enjoy your whole life on weekends. So, if you are ready for both situations then accept this option.
If you choose business then what is the best scenario of this option; if you start a business then you can become millionaire or billionaire. What is the worse scenario of this; your business model can fail. If you are ready for both scenarios then choose this.
Decision making is a very useful technique in our daily life and corporate life. There are lots of steps available to make a good choice. You have to understand which decision cycle is fit for your problem. Not every choice you make needs to be always right. Sometimes it is not helpful to you. Now in this situation, you have to learn from your mistakes and share your experience with others so they can not make that mistake.
Also You can Read our Blog on How the Decision Cycle helps to make decisions