As an entrepreneur, you will need to have a quality decision-making process and a fast decision-making process if you want your business to continue to grow. Is it possible? Yes, here is what you will need.
We make personal and business decisions. Individual decisions are related to our own life and our family. Business decisions are related to our business life or our job. But, the decision has an essential part in the 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 opportunity. They never find their chance because they are busy in continually seeking new opportunities. Because of that, when they see the real opportunity, they never decide to use it.
Why You Need Fast Decision-Making Process?
You, as an entrepreneur, cannot expect forever to be 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 the successful business in most of the cases will require a fast decision-making process. Remember that there will always be competitors that can make the same decisions before you.
As the most important reasons why you, as an entrepreneur, must have in place a fast decision-making process, I would mention the following things:
1. Fast Utilization 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 fast decision-making process that will help you to grab this opportunity. Also, this decision-making process will help you to implement the 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 a fast decision-making process.
3. Fast Response to Competitor’s Activities
As you continuously accomplish different business activities, also your competitors make something to beat you on the market. Each of their steps about the business, or the market will require your response. Because of that, you must decide quickly about your answer.
Fast Decision-Making Process VS Quality Decision-Making Process
How the speed of the decision-making process affects the quality of your business decisions?
The quality of the decision indeed depends on the speed of your decision-making process. So, we can say that decision quality is a function of the decision-making speed.
Quality decision = f(speed of decision-making process); higher speed means less quality and vice versa.
This is a logical starting framework. One thing is certain here. Behind every good and quality decision is information on which we make that decision. Entrepreneurs make decisions, and the speed depends on it. How much more information an entrepreneur has, it will be harder to make fast 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);
Information and Entrepreneur as a Basis for Decision-Making Process
I will try briefly to enter this secret about information and an entrepreneur as a basis for decision-making speed.
How much extra information an entrepreneur has, will be difficult to decide. Also, it will take more time to decide. 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 in this process, he will not make the decision, which in this case is not good. This is the case because entrepreneurs will spend their time collecting the required information.
There are many different BI solutions you can use to help you in collecting and analyzing different data from different sources.
On the other hand, you should process the pieces of information in a certain form through which you can discover easily and quickly visible and hidden trends that will be useful for making a decision. 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 incomplete information. I say incomplete information because our goal is to make a fast, but quality decisions. Therefore, entrepreneurs and managers must have analytical skills. So, the quality decision in a small interval of time will be presented by the following formula:
Quality decision = f(f(optimal amount of information, the form of information), analytical skills of the entrepreneur)
Analytical Skills as a Basis for Fast Decisions
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 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.