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Hannah Taylor

How to Establish an Effective Decision Making Process in Your Team

Making decisions in a team can be a flashpoint of tension and conflict - but it doesn't have to be that way. By establishing an effective decision making process, you can help your team make confident, sound decisions.

Did you know humans make around 35,000 decisions every day? These can be as inconsequential as selecting what outfit to wear or as life-altering as deciding whether to accept a new job offer.

While little thought needs to be put into the vast majority of your smaller choices, those with the power to impact your team’s success at work must be given more consideration.

So, how can you ensure your team consistently makes good decisions that deliver successful project outcomes? Today, we’re exploring the importance of creating an effective decision making process and how you can optimize the way your team makes decisions.

What is a decision making process?

A decision making process is the series of steps you take when making a decision, starting when you identify that a choice must be made and ending when you’ve found a suitable solution.

While most of the thousands of choices you make every day are small, you’ll still follow a decision making process. If you’re unsure whether to wear a jacket or not, you may check the weather forecast and make a choice based on that: this is a rational decision making process. Alternatively, you may look out of the window and make a decision informed by your previous experiences: this is known as an intuitive decision making process.

In the context of work, these processes are more formalized, following a set series of steps designed to help teams make the most effective decisions while minimizing the risk of error. Whether your team is responsible for developing new products or launching marketing campaigns, they will benefit from a repeatable and scalable process that helps them answer the challenging decisions they face each day.

The importance of effective decision making

So, why is effective decision making at work so important? Simply, effective decision making ensures teams don’t procrastinate in making choices, helps them consistently reach the most valuable outcomes, and leads to improved operational efficiency in the long term. Teams well-versed in efficient decision making will experience better resource utilization, develop stronger collaborative skills, and build positive team dynamics.

In fact, ineffective decision making is known to significantly impact company productivity and profitability. A report by McKinsey revealed that workers spend 37% of their time making decisions — though they believe more than half of this time is used ‘ineffectively.’ This wasted time and resource is estimated to cost large businesses around $250m in wasted labor costs each year.

What’s more, only 37% of respondents said their organizations’ decisions are both high in quality and velocity. Analysis of 10,000 agile projects revealed that velocity in decision making is an important factor in project success. Teams that take under one hour to make decisions saw a 68% project success rate, whereas teams that take over five hours to make decisions experienced a much lower success rate, at just 18%. 

What types of decisions do teams make?

To put everything we’ve discussed into context, let’s break down the three types of decisions made in businesses.

Strategic decisions

Strategic decisions are typically made by senior managers and will guide the direction of the business. These decisions have long-term impacts and may include:

  • Setting long-term company goals
  • Entering new lines of business or markets
  • Acquiring companies and assets

Tactical decisions

Tactical decisions are most often made by team leaders. They involve existing lines of business and feed into pre-established company-wide goals:

  • Creating marketing or project plans
  • Establishing departmental budgets
  • Hiring and firing
  • Responding to market activities

Operational decisions

Operational decisions influence the short-term, day-to-day activities of a business; to ensure effective project management in your team, it’s important to make sure you’ve got a process for making operational decisions, such as:

  • Managing customer or client requests
  • Overseeing project management
  • Pricing projects, assigning resources, and choosing third-party vendors

What are the steps of an effective decision making process?

One of the most popular approaches to decision making - called the rational decision making model - encourages efficiency by boiling the process down to six key steps. By asking teams to consider multiple perspectives and make use of their problem-solving skills, this approach helps guarantee you’ll make more well-informed decisions.

1. Identify the decision to be made

There are a multitude of different ways you may identify decisions you and your team need to make. In an ideal world, you can foresee upcoming decisions and plan accordingly; for example, by scheduling resource planning meetings, regularly reviewing project plans, or observing changes in the market and acting accordingly. This proactive approach seeks to anticipate and prevent potential conflicts, reducing stress and increasing operational efficiency.

However, sometimes a complex problem will arise unexpectedly. A client may submit a last-minute request, or an unplanned absence may require you to adjust resources to keep a project moving forward. Regardless of whether the situation you’re managing has been identified proactively or requires a reactive approach, having an effective system in place is critical.

2. Ask questions

Once you’ve identified that a decision must be made, asking yourself and your team these key questions will help you frame the business situation and provide parameters to guide your decision making process:

  • What is the desired outcome or goal?
  • What roadblocks are in your way?
  • Are there any other individuals or stakeholders you need to involve because you require their input or because the decision you make will impact their work?
  • How will you measure the success of your decision?

3. Gather data

According to a report by PwC, ‘highly data-driven organizations are three times more likely to report significant improvements in decision making compared to those who rely less on data.’ Gathering the relevant information to support your team as they identify and review potential solutions will increase their chances of making a choice that delivers positive outcomes. You will want to gather relevant information from both internal sources and external sources, such as:

  • Historical data relating to the issue
  • Experiences from members of the team that have solved similar problems before
  • Market research
  • Advice from a consultant

4. Weigh up the evidence

Once you have gathered your data, you will want to reflect on what you have found. You might look for trends or patterns (or, indeed, anomalies) in the information you have gathered, in order to help evaluate what is most relevant to the decisions you will be making.

Engaging in thorough discussions with the team will help generate a variety of perspectives on the evidence at hand, giving a more holistic view. Likewise, integrating both qualitative and quantitative insights can lead to a more comprehensive understanding of the situation.

5. Consider the possible solutions

It can be tempting to agree to the first viable solution for the sake of efficiency; this will only save you time in the short term. Identifying and reviewing as many alternative solutions as possible will ensure long-term operational success and efficiency.

This means reviewing the identified solutions against your predefined goals, evaluating the pros and cons, assessing feasibility, and discussing your choices with different stakeholders to make sure you’re meeting the needs of everyone the decision impacts.

Once you’re ready to decide, consider the long-term implications of the choice you’ve selected before giving it the green light.

6. Take action

Finally, it’s time to put your plan into action. Exactly what course of action you follow will depend on your situation and decision. At this stage, it’s important to consider your approach to communication as the team leader. Flawless execution requires you to overcommunicate efficiently, making it abundantly clear what the next steps are and who is responsible for what actions.

7. Review your decision

Reviewing the impact of your decisions will help your team make more effective decisions in the future. This final step involves assessing whether or not the outcome of this process was successful. Did it achieve the desired outcome and meet your goals? Were there any unforeseen complications? Did your team feel supported?

If the outcome was positive, make a note of what factors secured you that result. Not every decision will be a winner, but the more you reflect and learn from your shortcomings, the stronger your team’s informed decision making will become.

How to establish an effective decision making process

Now that you understand what an effective decision making process involves, it’s time to look at how to establish such a process in your team. 

Explore decision making models

While the rational decision making model we explored will be a great fit for many teams, there are many different ways to approach problem-solving at work. Let’s explore some of your other options:

  • Bounded rationality model: This model acknowledges that people are not rational one hundred percent of the time due to limitations caused by short timeframes, missing information, and cognitive capabilities. Rather than seeking the perfect solution, teams aim for a satisfactory solution.
  • Incremental decision making model: As the name suggests, this model doesn’t aim to rewrite the whole playbook; instead, workers make thoughtful decisions based on minor changes from previous decisions. When you’re forced to make decisions with limited information and are uncertain of the outcome, this model helps minimize risk.
  • Intuitive decision making model: While it’s generally advisable to avoid making decisions based on gut instinct, there are some scenarios when intuitive decision making can be beneficial. When there is little time available to consider your options or a lack of data to inform decision making, relying on an experienced colleague with a track record of success in the area to guide the way can be helpful. McKinsey revealed that inefficiency decreases with seniority, suggesting experience enables individuals to make better decisions faster.
  • Prospective decision making model: Also known as the scenario model, this methodology involves envisioning different future scenarios based on the decision made.

Remember, there is no one model that will be perfect for every situation. You may need to switch between models depending on the decision you’re making or use a combination of decision making methodologies.

Understand the potential challenges

Understanding the challenges your team may face when implementing new decision making processes will help you prepare for potential bumps in the road.

  • Failing to identify the situation: Misidentifying the problem or misunderstanding its impact can lead to irrelevant or ineffective decisions.
  • Too much or too little information: Having limited information to base your decision making around can introduce new challenges. On the other end of the spectrum, having too much information can cause overwhelm.
  • Overconfidence: It can be tempting to latch onto a promising solution early, but doing so can cause you to overlook better alternatives or potential risks.
  • Impulsiveness: Yes, there is a correlation between slow decision making and project failure, but this does not mean you should rush the process. Try to avoid letting emotions and stress inform your decisions, as this can lead to short-sighted and misaligned thinking.

Establish roles

It’s important to assign roles and responsibilities to individual team members as early as possible. This ensures everyone understands their expected contribution to the decision making process and who is the final decision maker. However, these roles may differ from situation to situation.

So, how do you determine whether a decision requires:

  • an autocratic approach when the leader makes the final decision
  • a consultative approach where the leader makes the final decision but with input from the group
  • or a group approach, where the team must reach a consensus?

With another decision making model, of course! The Vroom-Yetton-Jago Decision Model is designed to help leaders identify which decision making approach is appropriate to their situation. If you lead a midsize or growing team, this model can help you decide how much involvement they should have in the process, depending on the potential for conflict, the importance of the outcome, and other factors.

Encourage discussion

When making group decisions, don’t shy away from debate. While it’s important to find consensus before making a final decision, those assigned a key role in the decision making process should be encouraged to bring their own ideas and perspectives to the table. This can support more critical evaluation and make sure risks are properly addressed.

Evaluate and optimize

Finally, it’s time to put your plan into action. Reviewing your successes and failures will allow you to optimize accordingly, and you can use a resource management tool to understand the impact of your decisions on your team’s efficiency and utilization and relevant project factors.


You and your team make decisions at every second of every minute of every day. While there’s no formula for making perfect decisions every time, establishing an effective process in your team will go a long way to helping you consistently make informed decisions that drive efficiency, deliver positive outcomes and support the business’s success.

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