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Why risk making a bad decision in your accountancy firm when making great decisions is just so simple?
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Your firms success depends on the decisions you make.
But it can be tough to make a decision.
Even tougher to make the right decision. Tougher still to get your decision carried out successfully.
But when you get better at decision making, you set your firm on the road to greater success.
As a business leader your job is to avoid the pitfalls of bad decision making.
When making important decisions avoid your decision-making auto-pilot and be sure to seriously sense-check your decisions
Start with 4 helping hands here or read on for the full Bitesize Business Breakthrough.
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Beware, bad decisions are just so easy to make…
…and if the big corporate businesses often get the big decisions wrong, aren’t we also more likely to be guilty of bad decision making?
A 2010 McKinsey Consulting study showed a profound lack of good decision making on the big acquisition deals in the corporate world.
A KPMG study of corporate mergers showed that 83% of these large business decisions failed to boost shareholder value, when compared with other results in the same industry
600% better than analysis…
The McKinsey study investigated 1,048 business decisions over 5 years, and most of these decisions involved rigorous analysis before the decision.
McKinsey proved that a good decision making process matters 600% more than good analysis.
“Superb analysis is useless unless the decision making process gives it a fair hearing” – Lovallo and Sibony
Here's the proven solution for you...
Great movies start with conflict. For meetings to be truly useful, meetings must also encourage constructive conflict as well as collaboration.
The outcome of a successful meeting is a good decision and an action plan that generates movement and momentum towards the success of your firm.
You have a great excuse for making bad decisions…
Have you ever been on, or even heard of, a training programme on great decision making? Unlikely.
And yet decision making is a vital business skill – just like recruiting, selling or planning are business skills.
And as a business leader your decision making skill ultimately determines how successful your firm is.
Success requires a better decision making process…
Chances are you make decisions naturally without thinking about your decision making process.
Chances are you’ve done alright so far, so it’s a safe bet your next decision will also be alright!
STOP making big decisions the way you’ve always made decisions
START by widening your options before you make a decision.
Click here to get to the checklist for Winning Decisions. Use your device's back arrow to return to this point.
Want better than ‘ALRIGHT’ results for your firm?
If you want the results of your firm to improve beyond ‘alright’ it’s a good idea to improve the quality of your decision making process.
So how do you protect yourself against bad decision making?
What stops you making great decisions?
Here are the 4 hazards you must avoid if you want to make great decisions:
1 Stop looking so narrow
2 Stop being so biased
3 Stop being so emotional
4 Stop being so confident
In a brilliant summary of the research and literature on decision making, Chip and Dan Heath call these 4 hazards ‘the four villains’ of flawed decision making.
These 4 natural, instinctive and automatic flaws get in your way.
The Heath brothers provide a solution:
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“We can’t deactivate our biases, …we can counteract them with the right (decision making) discipline.”
Chip and Dan Heath
1. Stop looking so narrow – widen your options
A narrow decision making question is: “Should I hire Julie or not?”
Widen your spotlight…
One of the reasons corporate mergers fail is because the decision is ‘do we merge or not?’ It’s a ‘whether or not’ decision.
The decision is too narrow.
The odds that your decisions will be better improves as you widen the beam of your decision making spotlight, widen the area you light up.
BEFORE YOU DECIDE ASK:
2. Stop being so biased – reality-test your analysis
The Heath brothers put it so well:
“At work and in life, we often pretend that we want truth when we’re really seeking reassurance: “
"Do these jeans make me look fat?”
Bias (without realising) leads you to giving unjustified weight to information supporting your view.
It’s why Sun readers choose the Sun to confirm their Conservative views.
Other readers choose the Mirror to support their Labour bias.
"
“Confirmation bias is probably the single biggest problem in business, because even the most sophisticated people get it wrong. People go out and they’re collecting the data, and they don’t realize they’re cooking the books. We can’t deactivate our biases, …we can counteract them with the right (decision making) discipline.”
Chip and Dan Heath
Without realising, bias habitually influences most decisions.
BEFORE YOU DECIDE ASK:
3. Stop being so emotional – step away to get perspective
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At the moment you’re making a decision, your emotions always influence your decision making. These emotions can derail decisions.
For example, who would want to live with the decision of refusing the Beatles a recording contract?
Decca’s Dick Rowe was that man! He ‘felt’ that the time wasn’t right for bands!
At least Rowe learned from his mistake and went on to sign the Rolling Stones!
Buying a car can be an emotional affair which is why it pays to avoid making a quick decision.
BEFORE YOU DECIDE ASK:
A study showed that when doctors reckoned themselves “completely certain” about a diagnosis, they were wrong 40% of the time.
4. Stop being so confident – prepare to be wrong
The Heath boys show that even the best of us are overconfident:
We all think we’re better than we are at predicting future outcomes.
BEFORE YOU DECIDE ASK:
4 helping hands for you…
Leaving success to ‘Lady Luck’ is clearly a bad idea if you’re serious about succeeding in your firm.
So why would you leave your decision making success to chance?
Human nature, without you realising it, allows ‘4 villains’ to derail your decision making.
So it pays to ‘catch yourself on’ and sense-check your decision making.
1
Stop looking so narrow – widen your options
2
Stop being so biased – reality test your analysis
3
Stop being so emotional – step away to get perspective
4
Stop being so confident – prepare to be wrong
Click here to read this whole Bitesize Business Breakthrough. Use your device's back arrow to return to this point.
ULTIMATE ARGUMENT:
“How do I know that this better decision making process will deliver better results for my firm?”
Flipping a coin is a decision making process.
Rock, paper, scissors is another.
However you wouldn’t choose one of these processes for making a decision in your firm, would you?
No, because the process is flawed and results left to chance.
Your natural decision making process is also (naturally) flawed but can be bettered.
Improve your decision making using this 4-part sense-check and your chance of success improves.
Try it and see. Dip your toe in.
Analyse a good decision you’ve made in the past and see which of the 4 helping hands above show up.
TIME TO DISAGREE
“Involving too many people in a decision simply slows the decision down, this can risk losing a client”
Speed of decisions is often important in your firm and yet…
"In a study of top leadership teams in Silicon Valley, an environment that tends to place a premium on speed, …executives who weigh more options actually make faster decisions" -Kathleen Eisenhardt - Academy of Management Journal
This might seem counter intuitive but clearly worth taking seriously. There’s an added bonus. Involving people in decision making increases their willingness to support the decision and implement it well.
"Getting people to make a decision is hard in our firm"
Simply putting the 4-part decision making checklist to work can give reassurance and confidence.
So can a focus on testing and prototyping – this reduces the risk and fear of a big mistake by limiting the impact of the decision.
Working on a decision together can also help, by spreading the responsibility.
Your Winning Decisions 'Make It Happen' checklist:
Without realising it, your natural decision making has 4 natural flaws that prevent you making the best decisions for your firm.
So it pays to ‘catch yourself on’ and sense-check your decision making with a proven, 4-part, decision making checklist:
1
Stop looking so narrow – widen your options
To do?’ or ‘not to do?’ is a ‘whether or not’ decision.
It’s what you see hormonal teenagers do (it’s also why corporate mergers often fail!).
Your job is to widen your options and consider alternatives.
You then improve your chances of decision success and success in your firm too.
2
Stop being so biased – reality test your analysis
“Does my bum look big in this?” is seeking just one biased answer!
This natural and flawed bias even influences the analysis into a decision to confirm the bias you already have!
Beware!
Your job is to reality-test your analysis and your decision, for example, by getting interview candidates to do some real work not just answer questions.
Get others involved in the interview too.
3
Stop being so emotional – step away to get perspective
At a point-of-purchase, and every other moment of decision making, emotions run high.
And high emotions can derail good decision making.
Your job is to step away from the emotions somehow and get a calmer, more logical and more long-term perspective.
‘Phone-a-friend’ helps.
The 10/10/10 question helps too.
And work out what matters most so that you make the best decision.
4
Stop being so confident – prepare to be wrong
If doctors can be wrong 40% of the time when they are ‘completely certain’ about their diagnosis, it shows how even the most qualified can derail good decisions through overconfidence.
Your job is to prepare for things going wrong.
Anticipate problems and prepare for them (for both good and bad outcomes).
Predict best case, worse case and most likely case outcomes.
Set up trip-wire triggers to prompt decisions and actions that protect you from things going wrong.
Want to know more?
Decisive - How to make better decisions
Chip and Dan Heath
If you want an invaluable guide to making smarter decisions you’d do well to get a copy of Chip and Dan Heath’s book ‘Decisive – How to make better decisions’.
As a business leader you’re constantly making important decisions – you’ll be better armed to make better decisions in your firm and get better results for your firm by reading ‘Decisive’.
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