How to Prevent Bad Decisions
The job of a leader is to make good decisions, particularly when
the economy is soft, as it is at the moment. In the franchise relationship
the franchisor is the leader. While this tip is especially dedicated to
senior franchisor executives, anyone facing an important decision will find
Not all decisions are equal. An important decision has three characteristics: It cannot be easily reversed. It will be related to boosting
prosperity or keeping the business safe. It is likely to significantly impact on others, e.g. franchisees, customers, suppliers.Important decisions are usually also complex which is why the following process is so useful. These steps are backed by good psychological research. Practice them and you’ll immediately be a better franchisor and or franchisee.
Seven strategies and one tip
1. Don’t assume a good decision will be good for everyone.
Sometimes the best decision is the “least bad” decision because the options
2. Gather all the facts. We all have a tendency to filter out
information we don’t find interesting, so be careful not to be selective in
what you pay attention to. Keep asking “have we got all the facts?”
3. Get input from relevant people. These will be people who have
a significant stake in the outcome or who have relevant expertise. If you
form a task force of smart people, ensure some are also emotionally
4. Minimise the impact of egos. Wise people change their minds
in the face of new information. They appreciate that what is right is more
important than who is right. For instance, one of our clients regularly
reminds his team to hold strong positions loosely.
5. Identify all options. Put everything on the table, even
options that are disturbing. Remember you don’t need to act on these. But in
naming them you open the door to honest, frank discussion.
6. Draw up criteria. Assess the options against these to see
which get more ticks. For instance: What is the impact on franchisor
profitability? What is the impact on franchisee profitability? Is it
consistent with our brand and culture? How easy would it be to implement?
7. Pressure test preferred options. Play the devils advocate.
Actively look for gaps, weaknesses and risks. Explore how readily these can
be fixed or minimised.
These habits will greatly improve the quality of your decisions and your ability to intuitively identify more subtle threats and opportunities. A final tip. Someone once said to me, “Never make a decision when you’re too - too mad, too sad, too glad, too anything!” I think this is great advice because a common source of poor decision making is impatience. Just like a good wine, important decisions are sometime best allowed to sit for a time.