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  • BLOG - Intuitive or Rational? Which Decision-making Process is Best?

    14 August at 15:18 from atlas

    Just the other day I was working at a client's office and one of the team had received a proposal for a new product which could be offered to its members.  We got talking about the merits of the proposal and it became clear that the team member had become fixated on this one solution.  I then asked one question which had quite a dramatic impact.  The question was: "What is the business problem you're aiming to address (or opportunity you actually want to take)?"  From the response it became clear that this proposal was to be considered through an intuitive decision-making lens, yet a rational step-by-step process was probably required.

    In organisations, people are faced with making decisions every day.   Sometimes, executives have accumulated sufficient experience of situations that, in the absence of some facts, reliable information, or lots of time, they can apply their intuition to grasp the situation and make a decision which proves good enough.  Intuitive decision-making is one way to approach problem-solving and do this without reasoning.

    But more often, some gathering of facts and analysis using a step-by-step process is preferable.  A rational decision-making process might take longer because it follows a sequence of steps, but usually it will lead to the best solution.  Going back to the scenario presented earlier of a team member having received a proposal for a new product which could be offered to its members, what might a rational decision-making process look like?

    1.  Define the Problem - State the problem clearly in business terms.

    2.  Know the Strategic Direction - Understand how the business problem aligns with the strategic direction of the organisation.

    3.  Identify the Desired Outcome - Know exactly what result you want to achieve.

    4.  Establish the Solution Scope - The solution scope establishes the context and approach for which alternative solutions can be considered. 

    5.  Identify Alternative Solutions - Brainstorm ideas and consider all ideas that might work within the solution scope.  Refrain from implementation thinking.  Identify a minimum of three possible solutions for the problem.

    6.  Establish the Evaluation Criteria - Become clear on what is important by creating a list of criteria for evaluating the alternative solutions, possibly even weight the criteria where some have greater importance to the organisation's direction.

    7.  Select the Best Solution - Assess each solution against these and ensure that the best-fit solution is identified.

    A clear, step-by-step, rational decision-making process such as this one increases the probability of making better business decisions.  It can also prevent an organisation from becoming fixated on one solution before it's identified as the best-fit solution.  Both of these outcomes are valuable to any organisation.