According to CEO of the Strategic Decisions Group, Carl Spetzler, there are six elements that go into a good management decision:
(1) The right frame — you should make sure you are solving the right problem in the first place.
(2) Clarity about what you want. For example, are you trying to maximize shareholder value or just trying to stay alive and minimize damage?
(3) Creative alternatives.
(4) Gathering the right information, including information about uncertainty, which is essential if you want to choose the best alternative.
(5) Reasoning, which includes what you know and what you don’t.
(6) A commitment to make it happen, since a decision is no stronger than its weakest link.
Spetzler says that managers make three basic types of decisions:
Strategic decisions. Managers have weeks or months to make these decisions, which have life-shaping effects on a corporate or personal level. Strategic decisions are very important, involve significant uncertainty and complexity, and are hard to think through.
Typical decisions. These decisions often come from team meetings that last a few hours. They can have a big impact, but they are frequently tactical in nature and arrived at through a collaborative process.
In-the-moment decisions. For decisions made on the fly, managers use a different part of the brain that emphasizes rapid pattern recognition. Beginning with limited or incomplete information, they habitually look for similarities to experiences they’ve had in the past.
