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The Art of Decision-Making
When making a decision, we form opinions and choose actions via mental processes which are influenced by biases, reason, emotions, and memories. The simple act of deciding supports the notion that we have free will. We weigh the benefits and costs of our choice, and then we cope with the consequences. Factors that limit the ability to make good decisions include missing or incomplete information, urgent deadlines, and limited physical or emotional resources.
What are the types of decision-making?
When people are put in a familiar situation, their decisions are often fast and automatic [System 1 Thinking], based on longtime experience with what works and what doesn’t. However, when encountering a situation they’ve never been in before, they have to take time to weigh the potential benefits and risks when choosing a course of action. They are more likely to make mistakes and face negative consequences.
What is informed decision-making?
The ability to think critically [System 2 Thinking] is key to making good decisions without succumbing to common errors or bias. This means not just going with your gut [System 1 Thinking], but rather figuring out what knowledge you lack and obtaining it. When you look at all possible sources of information with an open mind, you can make an informed decision based on facts rather than intuition.
1. Decision Required
In this section, describe the decision that must be made. This should be very clearly stated, but succinct. This is an executive brief of what recipients of the document are being asked to describe.
2. Current Status
Here you provide the history of how you came to the issue at hand. While your decision-makers need to understand the background, this requires a careful balance of providing enough history without going into exhaustive and unnecessary details. A good litmus test for content to be included here is to simply ask yourself, “if this information relevant to the decision?” In other words, would know the piece of history or current status detail influence the decision maker one way or another? If the answer is yes, then it is relevant enough to be included. Beyond the history, of course, this section must include the who, what, when and where of the situation requiring a decision.
Be sure to capture all relevant decisions, with an emphasis on the relevant part. This section is not to list every possible variation anyone could ever dream up. Instead, list genuine options that the decision makers could genuinely consider selecting. Depending upon the nature of your particular environment, you may want to include a section of “excluded options”. In this case, you would briefly list options that were quickly ruled out and short statement of explanation.
For each option, explain the option in detail first. Then, in bullet or similar quick-reference fashion, highlight the positives and negatives (I prefer the position of “Benefits” and “Risks”) of each option.
a. Option 1
· Benefit A
· Benefit B
· Risk A
· Risk B
b. Option 2…
c. Option 3…
This is the recommendation of the team or individual submitting the decision document for consideration. It should include a reference back to the specific option being recommended (Option #1, 2 or 3…). In addition, the reasoning for this recommendation should be captured. For example, you should explain why the recommended option is better than the others. Logic such as lowest overall risk or cost are obvious reasons. Others may include a balance of risk and costs or time sensitivity.
Here, you document the decision the team aligned to. If you’ve done your legwork prior to submission, you may anticipate the chosen option. In this case, you may want to document the chosen option (anticipated) when presenting the document for signatures / approvals.
6. Next Steps
Based on the decision being made, what actions must happen next? This may not be required in all cases, but it is often helpful in ensuring the right actions happen in a timely manner. In addition, key decisions that require documentation like this often stem from a problem and include lessons learned or opportunities to avoid a recurrence. This section may also be useful for capturing this information.
7. Sign Off
If deemed necessary, here the decision-makers physically sign the document. Most of the time though, a simple email confirming approval and alignment is sufficient form the individuals.
Name 1, Title Date
Name 2, Title Date
Name 3, Title Date
Appendix A: Revision History
If you anticipate multiple revisions throughout the discussions and reviews, prior to signatures, a revision history is helpful to keep everyone aligned.