Not using decision-making models, you're leaving your future to chance. Unlock the secrets of successful decision-making models today.
We make thousands of decisions every single day. We choose what to have for breakfast, what outfit to wear, and what route to take to work. Most of the time, these decisions are made unconsciously – yet, it’s always the result of our choice.
In the workplace, we often need to make serious decisions while being time-constrained and lacking context or information. No wonder that we make mistakes. However, there is a tool that can help you get better at decision-making, in a structured manner, and with limited resources. This tool is a decision-making model.
Below we will discuss five basic decision-making models you can apply to make the right choice both in your professional and private life.
A decision-making model is a structured approach or framework that helps individuals or teams make informed and rational decisions. Using a specific model allows you to analyze a problem, evaluate alternatives, and select the best course of action. The value of decision-making models lies in their clarity. You will have an idea of:
Decision-making models save the time and effort needed to find a solution. They can be used both by an individual or by a team. When applied by a team, they encourage collaboration since each person is involved in the process. This also means more commitment, because people tend to be more committed to decisions to which they made an input.
Some of the decisions we make might potentially have a huge impact, creating a domino effect. Yet, even when it comes to truly serious decisions, we often do not use any structure, just letting things happen.
Business decisions directly affect the future of a company. Yet, in organizations, decision-making is often ineffective. In a Mc Kinsey Global Survey, only 20 percent of respondents said their companies excel at decision-making.
But ineffective decision-making comes with a cost. It decreases productivity, which can be translated into profit loss. For example, respondents mentioned they spent 37 percent of their time making decisions, and more than half of this time was spent ineffectively. It means that 530,000 days and approximately $250 million were lost each year.
So why are models of decision-making important?
There are several decision-making models. The variety of frameworks lets people with different learning styles find something that works specifically for them.
Roughly speaking, all of the models are about the same thing – they let you analyze the situation and find the best solution.
Let’s take a look at some of the most popular decision-making models.
Human decision-making is complex. On our own, our tendency to yield to short-term temptations, and even to addictions, may be too strong for our rational long-term planning. – Peter Singer, an Australian phisolopher
The rational decision-making model is about applying logical steps to reach the best possible outcome. It consists in analyzing multiple alternatives through credible facts, excluding any emotions, and focusing on objectivity. This approach is logical and brings order, this way ensuring consistency and discipline.
The five-step rational decision-making model was identified by the author Nigel Taylor in his 1998 book “Urban Planning Theory since 1945”, and was initially used in urban design and planning.
After that, you’re supposed to finalize your decision. Let those whom it concerns know about your decision. Ask if they have questions. Once you’re sure the decision is the right one, take action to implement it.
Rational decision-making model can be valuable when it comes to serious choices and when you have enough time to approach your issues with some logical analysis.
Career and education choices, big business decisions (like purchasing expensive equipment), choosing a new person to hire or a city to live in.
The intuitive mind is a sacred gift and the rational mind is a faithful servant. – Albert Einstein
The intuitive decision model involves feelings, emotions, and instincts to find the best solution. It’s less rigid and structured.
Intuition, which is an unconscious way of thinking, can provide us with good answers without explaining why they’re good. It’s expressed in a form of a sensation telling us that something is true, not providing any evidence.
Basically, intuition is formed from our previous experience, accumulated in our subconscious mind. This is why intuitive decision-making is a fast and automatic process – the solution just comes to your mind.
Since intuition is the result of our emotions and personal experience, it has limitations, which should be recognized. There are several factors that might impact our intuitive decisions:
Intuition is easy to use – it’s natural, and it doesn’t require any expertise. It can be very helpful in situations when you need to make a decision immediately.
Also, intuitive decision-making works for ambiguous situations where it’s hard to say what’s right and what’s wrong.
Choosing a life partner or friends, a place to work at, immediate decisions about life safety.
Intuition is widely used by businessmen too. We can mention such names as Henry Ford, Bill Allen (the CEO of Boeing in the 1950-s), and Travis Kalanick (Uber's CEO) - these people would trust their intuition, their “gut feeling,” despite the reasoning of their logical mind.
Intuitions depend on the patterns we have acquired. Insight is about gaining new patterns. – Gary A. Klein, a research psychologist
This model, which some sources consider as a subtype of the intuition model, was developed by psychologists Gary A. Klein, Roberta Calderwood, and Anne Clinton-Cirocco. Klein described the process in his 1999 book “Sources of Power: How People Make Decisions.”
The researchers aimed to analyze how people make decisions under pressure. For this reason, they studied the decision-making process of firefighters, nuclear technicians, and medics – in other words, people who make serious life-or-death decisions on a daily basis.
This model is based on “pattern recognition” – on remembering similar experiences that happened in the past. In high-pressure situations, we use those patterns as examples and let them influence our decisions.
All in all, the recognition-primed model can boil down to just three main steps:
This is a simple recognition-primed decision-making process. There are also two more scenarios, developed by Gary Klein and David Klinger:
Intermediate recognition-primed model (used when the level of situation complexity is higher:)
Complex recognition-primed model (for complex situations:)
The recognition-primed decision-making model is used when time is limited, information is incomplete, and goals are not clearly defined.
RPD is used by trauma nurses, firefighters, chess players, stock brokers, and other people whose job requires routinely making serious decisions.
Organizations with decision-making speed and imagination will thrive as nobody can claim to have a monopoly over creativity. – N.R. Narayana Murthy, a cofounder and a retired chairman of a tech giant Infosys
Creative decision-making is about finding unique ways of solving problems. Applying this model, you look for different perspectives to discover something new.
The creative decision-making model stimulates your curiosity, encouraging you to generate ideas. This way, it promotes progress and innovation, changing your perspective from seeing a problem as a difficulty to viewing it as an opportunity for growth.
In his 1926 book “The Art of Thought,” a social psychologist Graham Wallace outlined 5 stages of the creative process, which are still considered valuable. These are as follows:
With this information in mind, let’s see what the steps of the creative decision-making model are.
This method will be useful in any situations that require you to think out of the box.
Besides, you can use a creative decision-making model for situations that are new to you, like projects you have never worked on. Without any previous experience that might affect your decisions, it will be easier for you to look at things from a fresh perspective.
Creating new products and services (or updating existing ones,) improving the look of your office building, or developing uniforms that would be both comfortable and reflect the mood of the company.
Leadership depends on the situation. Few social scientists would dispute the validity of this statement (Victor Vroom, Arthur G. Yago)
This model is named after Victor Vroom and Philip Yetton, who originally developed it in their 1973 book “Leadership and Decision-Making.” Basically, it is a leadership theory suggesting that the choice of leadership style depends on the situation, reflecting the requirements of an organization.
Different scenarios will need different decision-making processes. The Vroom-Yetton framework gives you a number of options to pick from, letting you choose the one that would direct you to the best outcome in your situation.
The Vroom-Yetton decision-making model requires you to consider three factors before using it. These are:
In the Vroom-Yetton decision-making model, there are five basic processes:
To determine which model you should use, you are supposed to answer some questions. By saying yes or no, you will go down the tree diagram, which will eventually lead you to the perfect process.
The questions are as follows:
In 1988, the model was enhanced by Vroom and Arthur Jago and described in their book “The New Leadership.” The newer model includes more questions that cover other constraints, such as geographical location.
It’s flexible. You can pick a specific model for any situation.
The questions used in the model may not help pick the ideal solution. Besides, the model doesn’t take into account such factors as emotions and team dynamics.
When you need to find the best decision-making approach, or when you, as a leader, want to choose the right leadership style based on organizational requirements.
Autocratic (1) – If your decisions require speed and decisiveness, you will use an autocratic process. This model is popular among many entrepreneurs.
In particular, Steve Jobs was considered as an authoritarian leader, even a dictator. This model worked for him since Jobs was an unusually talented and creative person – yet, not very likable.
Autocratic (2) – One of the representatives of this decision-making mindset was Bill Gates. He would collect information and facts during his meetings, analyze them, and then make a decision by himself.
Consultative (C2) – An example could be Jim Lentz, the Chief Executive Officer of Toyota Motor North America.
Consultative (C2) – Mary Kay Ash, the founder of Mary Kay Cosmetics, would care for the need of her employees.
Collaborative (G2) – during the first years of the Disney empire, this was the model Walt Disney followed. He would give his people creative freedom and develop a healthy collaborative environment.
Some people may say that following decision-making models would take too much time and require too much preparation and resources. However, when applied appropriately, they can bring brilliant results. So pick the model that you find the most comfortable, use the structure it offers, and notice the difference between this new experience and what you typically go through while making a decision.
Your team members will all have different coaching needs, so how do you tell what approach to take? The Skill Will Matrix is one way to see what might work best for each person.
A team that knows how to dig deep and persevere is more likely to succeed. But this vital team resilience is a skill that has to be developed over time.