No matter how small or insignificant a matter might seem, your decisions will impact your business’s outcomes. The right decisions made at the right time can give way to positive transformations and success, while the wrong decisions at the wrong time can result in dire consequences. Learn about strategic decision making and the benefits of them in this blog.
What is strategic decision making in business?
Strategic decisions are the decisions concerned with the whole environment in which the business operates, as well as the people who form the company and the connection between the two. It is a plan of action based on a vision and long-term goals for the business. By clearly defining your company’s big picture aims, you’ll have the opportunity to align your short-term plans with this deeper, broader mission, giving your operations clarity and consistency.
Benefits of strategic decision making
They lead and communicate, managers make the decisions that directly influence the business. Through their ability to inspire and encourage, they can influence outcomes. Benefits of strategic decision making include:
Helps achieve goals – Every company has a list of goals they hope to achieve, short and long-term. Strategic decision-making helps towards successfully achieving all of these goals.
Revenue generation – New and innovative ideas, when implemented strategically, assist with long-term benefits in terms of revenue. It helps attract new investors and maintain good relationships with existing ones.
Progress measurement – It helps a company set clear objectives and measure success.
Working proactively – Strategic decision-making is extremely beneficial when these decisions translate into action and improve your business’s efficiency.
Develop competitive strategies – Strategic decision-making improves your understanding of your competitor’s strengths and weaknesses, which helps you develop your strategy accordingly.
5 steps for making strategic decisions
1. Define the problem:
What is the problem? Can it be solved? Does it need immediate attention or can it wait? What is my objective? What‘s to be accomplished by the decision?
2. Gather information on how and why the problem occurred:
Talk to individuals or groups affected by the problem and ask yourself: What am I not seeing? What have I missed?
3. Develop and evaluate options:
Weigh the advantages and disadvantages of every decision. Consider the effect it’ll have on the business, if there’s time to implement the change, and how practical the change is.
4. Select the option that best meets an objective:
Consider the facts as well as your intuition as a leader when making a decision.
5. Develop a plan to monitor the progress of the final decision:
The plan should include a step-by-step process or actions to solve the problem, communications strategy for informing stakeholders, a timeline for implementation, as well as measurements to monitor progress.
To remain competitive, companies must make decisions that minimise long-term risks and maximise short-term results.