Decision Making

Decision making is a core part of a manager's job, there's just no getting around it.  Yet so many managers, who are thoughtful and analytical, completely miss the boat when it comes to decision making.  They tend to make decisions "by the seat of the pants" or "from the gut."  I submit that this is unacceptable behavior from any professional manager, particularly when it comes to the really big decisions.  Hiring, large purchases, organizational restructuring, etc, are all places where structured decision making ought to come into play.  The big problem is that, although good decision making methods and tools are readily available, these skills generally aren't taught.  Even in my MBA program a few years ago we weren't taught what I'm sharing below.  Regardless of whether you're a slacker manager, or a an uptight manager, this is a skill that can't be overlooked.

Since there are many good ways to structure a decision, I won't
quibble much if at least some structure is in place. There is one thing
that I generally won't budge on and that's knowing what's important.
It's fine--critical, even--to brainstorm a list of criteria to use in
the decision process. But how do you decide which criteria is most
important? I'll answer my own question: weightings. Weighted criteria
help inform a decision process by making it easy to know what's
important. Weighting criteria is easier than it sounds--paired ranking
is generally my method of choice.

Let's assume you've interviewed four candidates for a job, and need
to make a selection. The first thing you'd do is brainstorm a list of
all your potential criteria. Once you've done the brainstorm process,
you'll want to review this long list and get rid of duplicates and
combine like items. For instance, your list might have both
"promptness" and "timely." You can combine these two into one criteria
called "high reliability." Once you've got a solid list of criteria,
you can get on with the paired ranking. On a sheet of paper or on a
spreadsheet, make a vertical list of all your criteria then begin to
compare each item to each other item. Let's assume you've got the
following criteria 'high reliability', 'leadership skills', 'CPA
license' and 'people management experience.' You'll make a vertical
list of these four items and then begin to compare each to the others.
So you'd compare 'high reliability' to 'leadership skills.' For this
position, which criteria is more important? Make a hash mark next to
that criteria, then move on to comparing 'high reliability' to 'CPA
license.' And so on until each criteria has been compared to all the
others. Four critera means six small decisions (six hash marks).
There's a simple formula that tells you how many small decisions you'll
need to make for any given list of criteria. If N is the number of
critera, here's the formula: (N(N-1))/2. So your final list might look
like this:

This means that you've got the following weighted ranking:

Now you can use your weighted criteria to do pair ranking for your
decision options. If you've got options "Mary", "Hank" and "Pat",
you'll want to compare Mary against Hank for 'high reliability' and put
a mark under which option (candidate) wins out. Then do the same for
Mary vs. Pat for 'high reliability, etc. until all options have been
pair ranked across all criteria. Multiply your hash marks by the
weightings, then add up the totals for each option. The highest number
is your decision and you know exactly why. The following should help
you see what I'm talking about.

This shows that Pat is the clear choice because according to our
preference of criteria, Pat is more attractive than either of the two
other options. Whenever you're using this method, the results should
generally resonate with your gut feeling. If you feel like something is
off somehow, go back and start over. Important decisions are worth the
effort.