How To Make Good Decisions Fast
[This article was originally published in Harvard Business Review.]
Busy leaders know how important it is to make good decisions fast, day after day. The challenge is how? How do you know the difference between “good enough” and “totally wrong”? And just how much time can elapse before “fast” becomes “slow?” Hours? Days? Months?
A simple, flexible Know-Think-Do framework can enable leaders and their teams to immediately start making these fast and roughly right decisions. To paraphrase Einstein, this framework is “as simple as possible, but not simpler.”
1. Know the ultimate strategic objective. The biggest hurdle to fast and roughly right decisions is criteria overload. Trying to weigh every possible objective and consideration from every possible stakeholder shoots the decision process in the foot before you even get off the starting line. Of the seven or eight possible objectives you would love to meet with this single decision, which one or two will make the biggest positive impact? Of all the possible stakeholders which one do you least want to disappoint, and what is the objective they care most about?
2. Think rationally about how your options align the ultimate objective. The vast majority of judgment errors can be eliminated simply by broadening our frame of reference. The quickest, easiest, most effective way to do this is by “consulting an Anti-You” before you make every decision. As one banking executive explained, “It’s amazing how many poor decisions can be avoided simply by asking one other person for their opinion.” An impressive amount of empirical research backs up his observation. (The article “How Decisions Can Be Improved,” spearheaded by Katherine Milkman of Wharton, provides an excellent summary.)
Consulting an anti-you works in two ways. The act of explaining your situation to another person often gives you new insights about the decision before the other person even responds. And the fresh perspective they offer in response is the second bonus.
3. Do something with that knowledge and those thoughts. After you’ve clearly defined the primary strategic objectives and laid out your research and thinking with one or two key Anti-You’s, it’s time to call it quits on all of the planning, strategizing, number-crunching, and critical thinking. You simply must select one option while letting go of all the other “good” options. It is helpful to remember here that in the real world, “perfect” options are a myth. Decision-making will always be an exercise in coping with an unknowable future. No amount of deliberation can ever guarantee that you have identified the “right” option. The purpose of a decision is not to find the perfect option. The purpose of a decision is to get you to the next decision.
What makes the Know-Think-Do framework particularly powerful for organizations ranging from tiny startups to behemoth banks and software makers is it’s scalability across every level of an organizational hierarchy. For example, a “fast and good enough decision” might mean two weeks for the division heads at a Fortune 500 bank to decide how to remain competitive while also being compliant with a new government regulation. Or “fast and good enough” might mean no more than 20-30 minutes for sales managers at the same bank’s commercial lending team in Chicago trying to make a customer account decision.
Regardless of where you are or how big you are, this framework enables all corners of an org chart to share a common language and approach for making sound, timely decisions. So get started.