Effective decision-making is a skill that business executives should master. It serves as the backbone of successful businesses. Whether big or small, every executive decision can take the business one step forward or backwards.

This is why the decision-making process shouldn’t be done quickly and impulsively. Although some scenarios require quick decisions, it’s still important to go through a process to ensure you make the right choices. The higher the stakes, the more important it is to align decisions with the overall vision and goals of the business.

In this article, you’ll understand the real impact of executive decisions and how they contribute to the growth of a business. You’ll also learn how to make better, more effective decisions to build business resilience, sustainability and success.

The Impact of an Executive’s Decision-Making Skills

A sound decision-making skill is a powerful tool. Executives can use it to shape business growth, improve market positions and even build better team dynamics. 

When decisions are approached strategically, it can address the immediate needs of the business to steer it towards a successful future. From choosing the right business model and creating the right product or service to hiring the ideal team member, executives have several business decisions to make. All these impact the overall development of the company.

Take a look at the specific ways effective decision-making skills can impact a business.

Gives direction

Effective decisions bring clarity and direction to business. Every crossroads is met with a clear understanding of goals, making it easier to focus on pre-established priorities. This aligns team efforts and makes sure the business is heading where it should go.

Direction-focused decisions reinforce the business's position and purpose. They ensure that every action supports the company's overall vision.

Improves reputation

The ability of executives to make decisions will also improve the company’s reputation. It enhances trust and employee morale because they can see executives making well-thought-out decisions. A wise and reliable decision-making process builds a positive internal culture and strengthens the respect of clients and partners. This in turn attracts top talents and loyal clients.

Better performance

Good decisions will always lead to growth and better performance outcomes, especially if it’s data-driven and well-thought-out. It considers and evaluates the options available and chooses the one that gets the team closer to their goals. It’s not just about the option that takes the business faster to its targets. It’s about the team’s journey towards that goal and the training that results from experience. Wise decisions focus on creating positive impacts - which naturally improves all-around performance.

Enforces sustainability

Long-term sustainability is a common business goal. It’s essential for building resiliency within the company. Executive decisions play a huge role in enforcing sustainability. Informed decisions require careful consideration of future growth and potential risks. By addressing these as choices are made, executives help keep the business agile and able to adapt to evolving client needs and industry-wide changes.

How to Make Better Business Decisions

Making better business decisions is a skill you learn over time. It takes practice and sound judgment to master effective decision-making skills. It also involves disciplining your mind to focus only on the relevant issues. It requires you to combine analytical skills with collaborative efforts and self-reflection.

Here are steps to guide you through the decision-making process - specifically one that aligns with the company values and supports the growth and long-term success of the business.

Gather data

Effective decision-making starts with the right data. Gather relevant information, as much as you possibly can. This may include industry trends, financial reports and even insights from people related to the decision. So if you’re trying to enter a new market, get information about the market dynamics, demand, competitors and financial projections. These will help you understand the potential impact of your move. The more data you gather, the more effective the decision-making process will be.

Filter information

As you collate the data gathered, filter them based on what’s more relevant to your decision. While all data may be valuable, it’s not always directly aligned with your business goals. For instance, you want to launch a new product. Instead of looking at industry-wide data and trends, focus on what your existing clients have to say. Prioritise them because they are your ideal market. You can treat the industry-wide data to back up your decision but not as the primary influence on your choices.

Consider possibilities

While analysing the data gathered, considered multiple possibilities and outcomes. Think about the different options you have and the impact each could have on the business. Consider the internal and external factors that could influence the quality of outcomes. For instance, you want to switch to hybrid operations so your team can work some days in the office and some days remotely. How will this impact their productivity, the team culture and client deliverables?

Involve key people

Although executives make the final decision, they’re not the only ones involved in the process. If you want to make effective decisions, involve key individuals. Talk to managers, senior team members and anyone with relevant experiences and insights related to the decision. This move brings new perceptions and will make your team feel accountable. They will also have a sense of ownership of the changes that a particular decision will bring.

You can also include experts and have them weigh in on the decision. Consult your mentor or respected individuals in the industry. Their experience and expertise could prove useful in helping you make the right decision for the business.

Trust your intuition

Data and input are both crucial to making decisions. But as mentioned, you’ll still make the final call. So trust your intuition. You’ve brought your business to where it is now. Trust in your gut feeling, especially when it aligns with your insights into the business. If you feel so strongly about a specific choice, then it's worth considering along with the data and input you’ve gathered.

This will prove valuable when you have limited data to support new business ventures. Or if you need to consider subjective factors, intuition plays a big role in influencing your final decision.

Be adaptable

Adaptability is another trait you should learn to be an effective decision-maker. You have to be ready and responsive to changes. Although you’ve set your eyes on a particular option, if new information proves that it’s not the best one, be open-minded enough to reconsider. If the initial results aren’t as expected, take a step back and reassess. Be willing to pivot if there’s a need.

Your ability to adapt to new information enables you to act proactively instead of reactively. This allows you to address issues before they get out of control.

Evaluate

Set clear criteria for evaluation so you can identify what success looks like for your decisions. As you implement decisions and watch the effects unfold, evaluate and measure. Get valuable feedback from stakeholders and regularly assess outcomes.

Reflect on new information to immediately refine decisions as you move forward. This ensures continuous improvement for the business.

Elevate Your Leadership and Decision-Making Skills

Making effective business decisions is not just for immediate outcomes. When done right, it can build a strong foundation towards sustainable growth. Each choice you make takes you one step closer to an empowered team and a business that can run independently even without your daily input.

As you develop and improve your decision-making skills, remember that making mistakes is also a path towards growth. There’s always a chance to fix things as long as you’re open-minded enough to accept correction.

Effective decision-making is also brought about by personal development. Working with a business coach will help executives and business leaders refine existing skills and develop new ones.

If you want to ensure your decisions are consistently aligned with your business objectives, let’s work together. I’m offering a complimentary brainstorming session to identify areas you can improve in the business. Book a call here: https://www.butleradvisory.com.au/time-with-trent.