Businesses are constantly confronted with the need to make decisions.

Whether strategic, organizational or purely operational decisions, all influence performance and collective dynamics.

The real difficulty often lies in the art of choosing without rushing... or getting bogged down in hesitation.

So How do you make a strategic decision? What are the key steps to make the right decision?

An update on proven decision-making processes, the key players in decision-making and the pitfalls to avoid in these key moments in the life of a company.

What is decision making?

Before going any further, it seems essential to go back to the definition of what decision-making is.

Making a decision is make a choice between several possible options, after weighing the benefits and consequences they involve in relation to a given objective.

In business, the decision-making procedures are obviously not the same as when it comes to individual decision-making.

It is not only a personal reflection, but a collective approach that involves various actors.

In this case, decision-making is essential todevelopment of a business strategy, with a direct impact on its performance, growth, and even survival.

However, not all decision-making processes have the same weight or the same scope in business. They can be grouped into three main categories:

1. Strategic decisions : they set long-term guidelines and influence the overall trajectory of the company. This type of decision concerns, for example, the launch of a new product or the acquisition of a competing company.
2. Tactical decisions : they concern the medium term and more specifically affect certain services or teams. This time, it may be a question of choosing a new technology in order to gain efficiency or a communication channel to support a marketing campaign.
3. Operational decisions : these decisions are part of everyday life and ensure good internal functioning. They may concern the organization of a team's schedule or the validation of a leave request.

Key steps in an effective decision-making process

Whether the decision is individual or collective, the decision-making process remains essentially the same.

It can be summarized in seven key steps: identifying the problem, collecting useful information to form an opinion, taking stock of possible options, analyzing them, then deciding, acting and drawing conclusions and lessons.

However, learning to structure this decision-making process brings real advantages: the people concerned gain clarity, avoid wasting time, contact the right people and, above all, improve the quality of decisions taken.

Based on the work of Peter Drucker, a key theorist in management and decision-making, let's review the key steps in the decision-making process to follow to structure each choice.

Knowing that the use of a decision-making model helps a team to make stronger and better reasoned decisions.

So let's take a step-by-step look at this process.

Step 1: Define the decision to be made

As always, it all starts with the precise formulation of the problem. Indeed, without a clear diagnosis, it is impossible to make a relevant decision. To move forward, ask yourself a few simple questions:

• What exactly is the issue or difficulty that you want to address? (an opportunity to seize, a dysfunction to overcome, a drop in performance to be stopped, a constraint to be respected...)
• What goals do you want to achieve with your decision?
• How will you know if the goal has been reached?

These questions will help you consider possible solutions.

Step 2: Gather information on the problem

To make an informed decision, it is essential to fully understand the situation. To do this, the information gathering phase is essential.

1. For this collection, start by inquiring internally :
   
   • Has anyone looked at this question before?
   • Has the company already accumulated data or feedback on this problem?
2. Don't stop there : investigating outside the department concerned or even your company can be just as valuable.

In practice, to identify the various possible choices, it is strongly recommended to:

• collect as much information as possible : data, reports, field observations, benchmarks, testimonies... The more concrete facts you have, the more you will be able to make an objective diagnosis.
• consult outsiders : an expert, an advisor or simply a fresh perspective can shed new light on a problem. This will allow you to test your intuitions and consider other perspectives.

All of this collected data helps your team consider different solutions to address the problem your business is facing.

Step 3: List the alternatives

Once the information is gathered, it is time to consider as many potential solutions as possible in order to solve the problem.

Based on the data collected, it is a question of imagining different solutions, consistent with the initial objectives, existing constraints and available resources.

It is important to offer multiple options as each stakeholder may have different needs.

• Thus, if the company must choose a new management tool, the expectations of the technical teams will not necessarily be the same as those of the marketing teams.
• Likewise, during an acquisition project, each department involved (finance, strategy, production, etc.) can defend distinct priorities.

It is therefore by offering several options that we increase the chances of finding a solution that suits the greatest number of people and really serves the company's strategy.

Step 4: Analyze the pros and cons of each option

Once all the alternatives have been identified, it is time to examine in more detail what each choice would involve.

The idea is to measure both the impacts (benefits/risks) for each stakeholder in order to compare scenarios fairly.

For this:

• List the pros and cons : the simplest method is to draw up a table that lists the strengths and weaknesses of each option. This helps to quickly visualize which one stands out.
• Evaluate the costs : the costing of the resources required to implement each option, whether financial, human, technical or logistical, can help you make your choice.
• Identify risks : by analyzing the potential obstacles presented by the various solutions (delays, internal resistances, estimation errors, etc.), it will undoubtedly be easier for you to choose between the different solutions. If necessary, you can use a tool such as a risk matrix to measure the probability and impact of each obstacle.

If you need tools to compare the various options, feel free to turn to some classical methods such as SWOT analysis or a decision matrix.

Step 5: Make your choice

After studying each option in detail, it is time to decide on the most suitable solution. To do this,

• determine the most relevant solution : the company's decision must be based on the concrete elements of the analysis, but also on experience, common sense and, sometimes, intuition.
• check that all the settings have been integrated.

note : sometimes, making the right decision is not limited to choosing a single option, but may consist of adopting a combination of several alternatives. Deciding also means knowing how to be creative and dare to come up with new solutions. Being open-minded often allows you to find the most effective solution.

Step 6: Take action

The decision validated by you or by the person responsible, comes the time to implement it. This step requires developing a precise implementation plan that will serve as a guide for the entire team. This plan should list:

• The tasks to be completed
• How to execute them
• and the responsibilities of each person.

It should answer the following questions: Who does what? Or more precisely: Who decides? Who executes? Who follows up and reports?

Clarifying these points avoids misunderstandings and allows all stakeholders to move in the same direction.

Once the action plan is established, then start the project and accompany it with a follow-up schedule.

This will allow you to regularly check whether the execution of your decision meets the objective set.

Step 7: Track and Evaluate

Once the decision has been implemented, it must also be managed over time.

The idea is to quickly detect discrepancies, adapt the plan if necessary, and ensure that the decision produces the expected effects.

Once the action is complete, take the necessary step back to assess the results.

Compare these to the initial goals, learn from what worked well, and note what could be improved for future decisions.

Based on this feedback, you will be able to make progress for your next choices.

The different decision-making methodologies in business

Decision-making methodologies are constantly evolving, in particular thanks to the emergence of new technologies. Each method has its own advantages, but also its limitations. Here is an overview of the most common approaches:

1. The autocratic decision : here, the CEO decides alone, without consultation with his team. This method is especially necessary when it is necessary to act quickly.
2. The intuitive decision : sometimes, the experience and the feelings of the CEO guide the choice, without necessarily going through a rational analysis.
3. The consultative decision : the CEO collects the opinion of his collaborators or experts, but keeps the last word.
4. Participatory or democratic decision-making : the team is directly involved, exchanges are open, and the decision is often validated by a vote or a collective agreement.
5. Decision by consensus : everyone has their say and all parties must reach a unanimous decision. It's a long process, but it guarantees everyone's buy-in.
6. The delegative decision : the leader entrusts decision-making to a person or group, while maintaining final responsibility.
7. Data-based decision : here, choices are guided by the analysis of data and measurable facts. This approach reduces bias and subjectivity. Nowadays, this mode of decision-making can be complemented by the use of AI. This technology makes it possible, in fact, to process impressive volumes of data in record time, which makes it possible to refine the consideration of internal or external information. This advantage is all the more important as many data governance platforms allow information to be shared with several stakeholders: teams, executives, management committee (CODIR), members of the board of directors. Such tools therefore make it possible to make ever more informed and relevant decisions.
8. Scenario-based decision : several options are considered and the decision is made by evaluating the risks and benefits of each.
9. Decision-based experimentation : before making a commitment, the company carries out tests to verify the viability and the usefulness of a solution.
10. The conditional decision : a decision is planned in advance, but it only applies if certain conditions are met.

In practice, no method is universal. Each has its advantages and disadvantages.

The choice depends on the context, the urgency, the culture of the organization and the management style of the CEO.

The actors of decision making in business

But while the decision-making method is important, so are the actors involved.

Indeed, in a company, strategic decision-making can be carried out in a way centralized, that is to say by a small group of people who decide for the whole organization, or on the contrary in a way decentralized.

In this case, lThe responsibility for the decision is shared between several hierarchical levels or teams.

The decision-making method used often depends on the size of the company, its activity, its organization and its culture.

The main decision-making bodies are generally:

• The general meeting of shareholders : this group brings together the owners of shares or shares in the company and validates major decisions.
• The board of directors : composed of directors appointed by shareholders, staff representatives and sometimes employee representatives, it is responsible for approving major strategic guidelines.
• The management committee : A key body of corporate governance, this meeting brings together the actors who take strategic decisions. In fact, the objective of this council is to ensure the strategic alignment of all members of management, to promote informed decision-making and to strengthen the cohesion and commitment of leaders to the decisions taken.
• The leaders (president, director, managing director): reference figures, they bear the final responsibility for the decisions taken.

To note : the actors and decision-making bodies may vary according to the legal status of the company (SARL, SAS, SA, etc.).

Common pitfalls to avoid in decision making

Making decisions in business is a complex exercise.

Even with solid and well-established methods, many obstacles complicate this mission.

One of the most common is the information overload.

Indeed, thanks to new technologies and big data, companies now have access to a phenomenal quantity of data.

But this volume makes it difficult to identify what really matters.

Executives often find themselves drowned in numbers and reports. It is then difficult for them to identify the relevant elements to respond to their problem.

In addition, there are cognitive biases.

More clearly, it's about the prejudices and preconceived ideas that influence our choices, often unconsciously.

Even the most experienced decision-makers can find themselves confronted with such a situation and lose the objectivity that is essential for informed decision-making.

The Time factor turns out to be another trap. In a professional context where everything is accelerating, decisions often have to be made quickly.

However, deciding under pressure sometimes leads to hasty judgments that reduce the quality of decisions made.

Finally, the conflicts of interest complicate the process even more.

Each stakeholder pursues their own goals, and finding a balance between sometimes opposing expectations is never easy.

In short, whether decision-making is solitary or based on the choice of an assembly, deciding does not only consist in selecting one option among others: it is a permanent balancing exercise that requires lucidity, perspective and agility in the face of multiple constraints and influences.

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