Decision Making

Often times, we tend to see decisions as rigth or wrong decisions. However, we often tend not see them as good or bad decisions. We also tend to ignore the fact that a right decision at one point in time may transform into a wrong decision at a later point in time. This transformation or lack thereof does not necessarily make the decision a bad or a good one. We tend to ignore these other two forms of decisions and settle with “right” or “wrong” classification, especially when we are judging others.

Decision Making involves answering questions that fall into three broad buckets

1. Questions you know answers to (the Known)
2. Questions you don’t know the answers to (the Known Unknown)
3. Questions you don’t have (the Unknown Unknown – what you don’t know that you don’t know)

Broken down into these three buckets, it is not prudent to make a decision purely based on the first. This is the point where you do due diligence on the three aspects. Due diligence involves

1. Verifying items in the first bucket (the Known)
2. Get answers to the second category – the known unknown. If the decision is time-bound and you cannot get the questions answered in a timely manner, make some reasonable assumptions that would answer these questions. Then, move these items into bucket one and go thru that process.
3. The third bucket is, by far, the most risky in the decision-making process. First step in mitigating this risk is to try and move the items into the second bucket – the known unknown. Then, follow the procedure you have used to handle the items in that bucket.

This is an iterative process until you either have only bucket 1, or you have worked closely with all the stakeholders to accept the risks around the items in the other two buckets. The second part is especially important when your decision-making process is time-bound.

At the end of the due diligence process and by the time you are ready to make a decision, ideally, you should have eliminated all items from the third bucket. You should have also built and verified reasonable assumptions around each item in the second bucket. And of course, you should have verified each item in the first bucket to be accurate.

Having completed the due diligence, now you are ready to make your decision. Ensure that the decision you make takes into account all the information you have, including the assumptions you have made. The decision you make should accommodate a change of course in the actions you take, should the information you have or assumptions you made were to change.
Once all this happens, then you have made a good decision! If you have ignored any item in these three categories, depending on how critical the ignored item is, the decision becomes good or bad decision.