How to plan Better Business Decisions to be a success
How to Make Better Business Decisions
Less self-confidence when making decisions
Nobel Prize-winning psychologist Daniel Kahneman commented that overconfidence would be the prejudice he would eliminate first if he had a magic wand. It is ubiquitous, particularly among men, the wealthy, and the experts. However, overconfidence is not a universal phenomenon. It depends on factors including culture and personality, but there’s a good chance you’re more confident in each step of the decision-making process than you should be.
- So the first rule of decision making is simply to be less sure about everything. Do you think choice A will lead to outcome B? It may be a little less likely than you think. Do you think outcome B is preferable to outcome C? It is probably very clear to you as well.
- Once you accept that you are overconfident, you can review the logic of your decision. What other items would you value if you were less sure that A will cause B or that B is preferable to C? Have you prepared for a dramatically different outcome than expected?
You can also practice aligning your level of confidence with the possibility that you are right. Try answering quizzes like this one or this one. You’ll find that while it’s not always possible to be right, it’s entirely possible to trust yourself less.
Find out how often it usually happens?
Research suggests that, in general, the best starting point for predictions – a key piece of information in decision-making – is to ask, “How often does this happen?” If you’re considering funding a start-up, you might ask, “What percentage of startups fail (or what percentage succeed)?” If your company is considering an acquisition, you should start by asking how often acquisitions enhance the value of the company or further its goals.
This rule, known as the base rate, comes up a lot in forecasting research, but it could also be useful for the judgment side of decision making. If you think outcome B is preferable to outcome C, you might ask, “How often has this happened in history?”
For example, if you’re thinking about launching a business and are weighing whether to spend years at an unsuccessful company versus staying at your current job, you might ask yourself, “How often do entrepreneurs who fail end up wishing they hadn’t?” stayed at your previous job?
The idea of both prediction and judgment is to move away from the “inside view,” where the details of the decision overwhelm your analysis. Instead, use the “outside view,” where you begin to analyze similar cases before considering the details of your individual case.
Learn about probability
The first two rules can be implemented immediately while the latter requires a bit of time, but it’s worth it. Research has shown that even relatively basic probability training makes people more accurate in forecasting and helps them avoid certain cognitive biases.
- If you’re not comfortable with statistics, there’s no better investment in improving your decision-making than spending 30 minutes to an hour learning about it. You can start with Khan Academy’s introduction to heads or tails.
- Improving your ability to think probabilistically will help you with the first two rules. You will be better able to express your uncertainty and think statistically about how often it usually happens. All three rules together are more powerful than any one of them alone.
Although you can start implementing these rules relatively quickly, mastering them takes practice. In fact, after using them for a while, you can be confident in your ability to make decisions. Great decision makers not only follow these rules when faced with a particularly difficult choice, they refer to them all the time. They recognize that even seemingly easy decisions can be difficult and that they probably know less than they think.
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How to plan them to be a success
Set the goals
Objectives refer to exactly what knowledge or skills attendees should have acquired by the end of the training.
Set the duration and budget
Estimate the amount of time that will be required to achieve the stated objectives. It can vary from a few hours for simple topics, to months for complex training, in which case the schedule of the sessions will have to be drawn up.
Consider in the budget the purchase and transfer of materials, space rental, coffee break and any other necessary item.
Design the training program
Will slides be used? Will it be multiple trainers? Will it be a practical workshop or a presentation? At this point you must structure the training session from start to finish, determining how long each activity will last, the times of entry, exit and snack. Do not be too permissive with lateness, you would be discouraging those who do comply.
Secure a space for the training session
Will own facilities be used or will a place be rented? In the second case, there are some points to keep in mind:
- Accessibility: The ease of entering and leaving the area, as well as the proximity of public transport and parking lots.
- Lighting and ventilation: If the training takes place during the day, it is highly advisable that the space has some natural light. On the other hand, good ventilation is essential. A fresh air break will oxygenate body and mind to keep your audience motivated
- Equipment: The room must have a projector, screen or TV, laptop, sound equipment, electrical and internet connections, as well as comfortable chairs and tables.
- Tech Support: You never know when a laptop might go down, a network cable might be disconnected, or something else unforeseen. Ideally, there should be technical assistance personnel on site to help install the equipment and be aware of any contingencies.
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