7 Steps to Improve Your Decision-Making Skills

The success of a company president, leader or manager is determined by the number of good decisions they make. Making the right decision is a powerful tool that inspires confidence in the people who follow you.

But when you make almost every decision—large and small—for your managers, supervisions or employees, it also dilutes their respect for you and reduces their desire to work diligently and achieve their goals.

Knowing how to make good, timely decisions, like which projects to bid, what markup will help you win a contract, or which superintendent should run jobs, are keys to building a successful construction business. And being confident in making those decisions yourself or choosing to delegate them to the right person in a timely manner will increase the odds that your company will hit its revenue goals, profit margins and project goals more regularly.

Everyone can take steps to become better decision-makers and delegators. To avoid fretting about when to make decisions, consider the seven tips below to make better decisions and learn when it’s a good idea to delegate instead.

1. Define the Problem

Before you can make a decision or decide to delegate it, you must define, identify and understand the problem, scenario or situation. Make sure you completely comprehend and have investigated the problem or situation from all angles. What’s the problem and what are the options for solving it?

2. Determine the Desired Outcome

Clarify and define the best possible outcome for the situation or issue. Start by defining the goal and what a desired result would be. Determine what you’re trying to accomplish and, if you’re working with a team, build a consensus around that.

3. Decide Who Makes the Final Decision

Delegation is a cornerstone of effective leadership. The more decisions you make for your team, the more decisions they will bring to you. Micromanagement is everywhere in our industry. These micromanagers think they are the only ones smart enough to make decisions.

When you make most of the decisions for your people, you’ve subsequently trained them to rely on you. This reduces your effectiveness as a manager and eliminates their responsibility for performing or achieving results. People responsible for results should be the ones responsible for deciding how to produce the results.

Start with a clear understanding of everyone’s job description and level of authority, which defines who is accountable and responsible to make decisions and produce outcomes. Delegation is a win-win proposition when the leader transfers roles and trusts responsibilities to his subordinates, allowing the leader to dedicate more time to building strategic initiatives.

As a result, people who add more accountability to their role boost performance as they become empowered by contributing to the success of the company. Delegating successfully requires outlining an action plan to accomplish the task or how to make the right decision.

The manager must be ready to accept different ideas and new ways of accomplishing tasks. Also, make sure you have dedicated enough resources required to accomplish the tasks you delegate to others. See the box on page 10 to better understand the four levels of delegation.

4. Identify Solutions

Investigate, explore and identify the best possible solutions or alternatives for each situation. The wider the options considered, the better your final decision will likely be. Considering different solutions will help you look at choices from every angle.

There’s always more than one way to solve a problem. After you’ve exhausted the multiple alternatives, evaluate the risks and implications of each one, and then choose your final solution.

5. Weigh the Risk

Analyze and evaluate the potential risks and the odds of achieving a good outcome from your decision. Every decision has specific odds that your choice will produce a good outcome and successful result.

It’s just like playing blackjack in a casino— do you hit a 16 when the dealer has a 5 showing? You know the odds and make the best decision you can. But you’re never guaranteed of winning.

Decisions are bets that the desired outcome or result happens. You can’t guarantee that you will win. Therefore, you’re betting your decision will produce the result you want with a certain level of certainty.

Consider the odds if your decision is worth betting money on it. Are there any other factors you haven’t considered? Are your odds good that you’ll make the right decision? What happens if you make the wrong one? And what happens if you postpone or don’t make the decision in a timely manner?

Remember, postponing or not making a decision is not a solution—the problem will continue to exist. Delaying or postponing important decisions is the same as deciding “no” and hoping the decision and problem goes away without you having to deal with it. Plus, you lose respect as a weak leader who can’t make decisions.

6. Make the Decision

Decide the best solution and then make a decision, even if the odds are not 100%. Any decision is better than a perfect decision never made. Once you’ve evaluated the alternatives, the next step is to make your decision. If one particular alternative is clearly better than the rest, your choice will be obvious. However, if you still have several competing options and opinions, use your best judgement and don’t always seek perfection.

Listen to your gut and remember that making the right decision often relies more on intuition than analysis. Deciding between subcontractors, for instance, requires examining inclusions, exclusions, references, potential issues, professionalism, trust and prices. But the tipping point often rests with your gut. Which choice feels like the right choice, and who do you want to do long-term business with?

Don’t be afraid to make decisions. Weigh the pros and cons and the potential problems. Let your core values be your guide. If you are all about fairness and integrity, don’t make decisions that go against your values just to improve the bottom line.

If you promise full value to your customers, don’t be tempted to charge a little extra when you can get away with it. And don’t let peer pressure affect your ability to make tough decisions that might not be popular. You are not trying to make friends. Results are what matter. Also, don’t let a false sense of urgency push you to make decisions before you need to. Often, the best decision is made after you take a night to sleep on it.

7. Live With It

In a recent mastermind group meeting, we discussed some of the common issues contractors face, such as:

• Should I replace a longtime manager who has a good attitude, but is not producing results?
• Should I replace a longtime field foreman who continually does excellent work, but has a bad attitude, isn’t a team player, and won’t learn how to use the latest technology?

The temptation is to ignore making these tough decisions, rather than do what you know is right. One of the group members said, “Every decision you face has many pros and cons. And no decision is a sure thing. Nor will you make a 100% perfect decision every time. So, just make the decision based on all the information and options you have. And then live with it—don’t look back and don’t second guess your decision.”