5 Elements of an Effective Decision Making Process
You can make more effective decisions when you know what the key elements are. When you make important decisions, there’s a few key factors to keep in mind. For example, you should rationalize and understand the problem itself. You need to know the problem you’re solving. You should also set boundary conditions for the solution. Success is often a spectrum so you should set boundaries so that you don’t limit yourself to something that’s impractical or something that’s impossible. Your decisions should be action-oriented. If you can’t act on your decisions, then it’s a waste of time. You should also be able to respond to feedback once you implement your decision. What looks good on paper or sounds good, may not work when you actually test it.
In The Essential Drucker: The Best of Sixty Years of Peter Drucker’s Essential Writings on Management (Collins Business Essentials)
5 Elements of an Effective Decision Making Process
According to Drucker these are the 5 elements of an effective decision making process:
- Element 1. Problem rationalization.
- Element 2. Boundary conditions.
- Element 3. The right thing to do.
- Element 4. Action.
- Element 5. Feedback.
5 Elements Explained
Here’s a quick explanation of the 5 elements of effective decision making:
- Element 1. Problem rationalization. The clear rationalization that the problem was generic and could only be solved through a decision that establishes a rule or a principle. Know the problem your solving. See Opinions Over Facts for Effective Decision Making, 4 Types of Problems, and What is Relevant Decision Making Criteria.
- Element 2. Boundary conditions. The definition of the specifications that the answer to the problem has to satisfy, that is, of the “boundary conditions.” Know your range of options that will still count as success. See Boundary Conditions for Effective Decisions and Half a Loaf Over Half a Baby.
- Element 3. The right thing to do. This is the thinking through what is “right,” that is, the solution that will fully satisfy the specifications before attention is given to the compromises, adaptations, and concessions needed to make the decision acceptable. First know what the right thing to do is whether or not you can do it. First Know What’s Right for Effective Decision Making, Develop Disagreement Rather Than Consensus, and Satisficing to Get Things Done.
- Element 4. Actions. The building into the decision of the action to carry it out. Turn your decision into action. See Action Forcing Events and Action Commitments.
- Element 5. Feedback. The “feedback” that tests the validity and effectiveness of the decision against the actual course of events. Bounce your decisions against reality and see what comes back. See Test Your Decisions Against Reality and Objectives are Like Flight Plans.
My Related Posts
- 4 Decision Making Methods
- Consult-and-Decide and Build-Consensus for Making Decisions
- How Experts Make Decisions
- Balance Your Intuition and Reason
- Cooperative Controversy Over Competitive Controversy
- 8 Rules of Business Think
- Precision Questions and Precision Answers
- Quantification
- Testing for Expert Judgement
- Pattern-Based Leadership vs. Fact-Based Management
- Refuse the Sucker’s Choice
- Framing Compelling Arguments
Sounds like the ideal follow-up to the leadership post. You probably can’t have one with out the other to work at top-notch effectiveness. As in, if the boss loses his cool how can he be expected to make the best decisions?
Hi J.D.
I like how you break everything down to just 5 elements. For me Action is the one the speaks to me the most, because I believe that is the major show stopper for most. I enjoyed this post very much.
Giovanna Garcia
Imperfect Action is better than No Aciton
@ Jannie
There’s a lot to be said for cool-headed cats. I forget where I saw it, but somebody asked what all leaders have in common … and it’s that they keep their heads under pressure. It makes a lot of sense.
@ Giovanna
I’m a fan of action. I think really what it is though, is the feedback. It’s testing ideas against reality. I think speeding up feedback loops is a key to success.
Hi JD
A big post. I need to read through this carefully and look at the links. First glance – looks very beneficial. Thank you.
I seem to have a pattern of relating things back to life “outside of work”. Do you think this method applies there too? Or a slight modification thereof?
Juliet
@ Juliet
Great question. I originally wondered if it was too business oriented, but then I noticed the principles themselves hold true outside of work too.
For exaple, some decisions just aren’t worth over-engineering. For any decision worth spending time on, it’s important to know the boundaries (and who’s boundaries or who needs to buy in). I think it’s also key to know the right thing to do, even if you’ll have to make compromises (at least know what the ideal is before you hack it up). The actionable part and the feedback are also very relevant.
I think the biggest distinction is the decision criteria. For example, decisions at work may be more about a business case or data, whereas at home they’ll be more about values.
Ironically, outside work can benefit from more “business sense” and work can benefit more from some more life and personal values.
Hi JD
Thanks for the added insights. I especially smile at your last sentence.
Juliet
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