The decision making is a unique process that means you will take required actions. This process in all aspects of our lives.
We make personal and business decisions. Personal decisions are related to our personal life and our family. The business decisions are related to our business life or our job. But, the decision had an important part in executions and success of the executions – the time frame of each decision.
In the previous post related to entrepreneur visionary and opportunist, I write something about why entrepreneurs opportunists never find their real opportunities. They never find their chance because they are busy in constant seeking new chance. Because of that when they see the real chance they never made a decision to use it.
Why are Quick Decisions Important?
You as an entrepreneur cannot expect to be forever in the process of decision making. The end of the process or the results of this process is a decision. The life of an entrepreneur and activities to manage successful business need the quick decision. Remember that there will always be competitors that can make the same decisions before you.
As most important reasons why you as an entrepreneur must make quick decisions I would mention following:
1. Quick Use of Opportunities
If you see an opportunity, it will not have value for you or your business if you’re not using it. Because of that, you need a decision quickly on how to use this opportunity and who will implement required actions related to this opportunity.
2. Quick Response to Customers Needs
You as an entrepreneur need to remember that you and your business exist because of your customers and their needs. If you discover shifts in your customer’s needs, you cannot lose a tremendous amount of time to decide how you can satisfy their new requirements. Your small business is not alone on the market, it is surrounded by competitors that will wait for your indifference. Because of that, you will need quick decisions.
3. Quick Response on Competitors Activities
As you continuously accomplish different business activities, also your competitors didn’t sleep. Each of their steps about the business, or the market will need your response. Because of that, you must decide quickly about your answer.
Speed in Decision Making Versus Quality of the Decision-Making Process
How the speed of decision-making process affects the quality of your business decision?
The quality of the decision indeed depends on the speed of deciding. So, we can say that the decision quality is a function of the decision-making speed.
Quality decision = f(speed); higher speed means less quality and vice versa.
This is logical. One thing is certain here. Behind every good and quality decision is information on which we make that decision. Decisions are made by entrepreneurs, and the speed depends on it. How much more information entrepreneur has, it will be harder to make quick decisions. This is because the speed of decision making is a function of available information and an entrepreneur. So, the previous equation will be:
Quality decision = f(available information, entrepreneur);
I will try briefly to enter in this secret about information and an entrepreneur as a basis for decision-making speed.
How much extra information entrepreneur have, it will be difficult to decide, it will take more time. Sometimes it will never have enough information to make a decision, and the speed of this process will be very slow. In such a case the time required to make a decision can go to infinity. Sometimes the process will to not decide, which in this case is not good. This is the case because entrepreneurs will spend their time on collecting required information. On the other hand, pieces of information should be processed in a certain form through which entrepreneurs can discover easily and quickly some trends and some hidden trends that will be useful for deciding. So, for quality decisions, entrepreneurs should have an optimal amount of information in a form that allows good estimations. With this in mind our formula from above now looks like this:
Quality decision = f(f(optimal amount of information, form of information), entrepreneur)
If they want to draw some quality conclusions from the information presented in an appropriate form they will need to have a certain ability to recognize trends in such an incomplete information. I say incomplete information because our goal is to make a quick and quality decision. Therefore, it is necessary entrepreneurs and managers to have analytical skills. So, the quality decision in a small interval of time will be represented by the following formula:
Quality decision = f(f(optimal amount of information, form of information), analytical skills of the entrepreneur)
Analytical Skills as a Basis for Quick Decision Making
As you can see an analytical skill is the ability of an entrepreneur based on incomplete information to draw conclusions and make quality decisions. It is believed that successful entrepreneurs make a quick decision and their own thinking for the accuracy of the decision is 70%.
The characteristic of analytical people is to look into a group of information where they will find something interesting that other average persons cannot see anything. Knowledge is a requirement for an entrepreneur to be analytical.