To help you navigate the complex world of entrepreneurial decision-making, we’ve gathered insights from 15 CEOs and founders.
From being balanced and flexible to using the pros and cons framework, these leaders share their tried-and-true frameworks, techniques, and lessons on making impactful decisions in their ventures.
Be Balanced and Flexible
Thoughtful decision-making has been integral to growing our 3D visualization firm over the past decade. I took time to clearly define the specific decision and objective before weighing options. Jumping to solutions prematurely risks misguided choices.
However, endless deliberation is avoided. Analysis paralysis can also delay progress. I set a timeline for making the final call to maintain momentum.
When data is available, key metrics and projections are compiled to supplement experiential intuition. But decisions can’t always be purely data-driven.
Ultimately, I’ve learned that deciding with confidence, then relentlessly executing while remaining flexible, yields the best results. Stick to the vision while adapting to contextual factors.
As No Triangle Studio has scaled, balancing research, input, instinct, and conviction has served well through uncertain terrain. But in entrepreneurship, uncertainty is the only certainty.
Invest in People, Not Ideas
Invest in people, not ideas. An entrepreneurial spirit will discover many ideas that spark interest—but what really matters is the humans behind them. Can you see yourself problem-solving, overcoming disagreements, and aligning creatively with a potential business partner? These are the questions you need to ask.
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Guide Decisions with Mission and Values
Decision-making should always start and end with your mission, values, and principles; however, beyond that, I’m a big believer in developing anecdotal sayings and philosophies with your team as your organization evolves. The more you can have a few principles captured by catchy slogans that become an inside language for your company, the better.
These are shorthand sayings that embody the decision-making values of the team and can be the glue that holds the team together over time and reduce friction when difficult decisions are made. As an example, one I’ve used over the years is “Today is better,” which serves to create a sense of urgency among the team and create a forward momentum that helps fight against procrastination.
Take a Minimalist Approach
I truly believe that start-uppers should embrace a minimalist decision-making process.
When I started to build my job board, I made the mistake of worrying about processes that could increase our revenue by 5-10%. The problem was that we didn’t have the scale for small decisions to make a difference, so it ended up being a waste of time and energy.
Unless your annual income is in the millions, I strongly recommend that you focus on ideas that have the potential to move the needle. If an idea cannot at least 2x your income or increase your retention rate by 50%, you should ditch it.
Improve Decisions with a Feedback Pipeline
One of the best ways to improve decision-making is by creating a feedback pipeline. As a startup founder, it can be very difficult to get honest input from your team members. After all, no one likes to “rock the boat” with the boss.
That’s why a few years ago, we implemented our feedback pipeline. This involves sending out a monthly form where team members can share ideas freely and anonymously with each other.
Where the magic happens is in the next step, though.
We go through the ideas and choose the best ones to implement. Then, we publicly shout out the person who suggested the idea in our next team meeting.
This creates a positive loop that rewards people for putting their ideas out there, and it gives us an idea of what direction the team is leaning towards overall.
Combine Creativity and Perspective
I prefer to follow a creative approach in my decision-making process. Innovation is the key to thriving entrepreneurship, and I try to incorporate it while making decisions.
Whenever I have a problem, I think of new strategies as solutions. Considering different perspectives gives an overview of possible outcomes. I can have an inkling of the risk factors and success rate. After introspection, I select the one with a higher success rate and fewer risks. A creative approach to decision-making helps to improve clarity.
As a result, entrepreneurs can see what they should prioritize for the better growth of their business. It can increase business yields and fulfillment of objectives or targets.
Leverage Business Intelligence
Business Intelligence (BI) has been a cornerstone of effective decision-making in my entrepreneurial journey. The power of BI lies in its capacity to transform raw data into actionable insights.
By analyzing patterns, trends, and metrics from past and present operations, BI tools allow me to make data-driven decisions rooted in concrete evidence rather than relying solely on intuition. For example, when evaluating the efficiency of our paid advertising campaign, BI metrics can show which strategies yielded the highest ROI, guiding future marketing efforts.
The lesson for other entrepreneurs is clear: In today’s data-rich environment, leveraging Business Intelligence can give you a significant competitive advantage. It ensures that decisions are strategic, targeted, and based on evidence, reducing risk and increasing the likelihood of success.
Conduct A/B Testing
In my entrepreneurial journey, I’ve learned that effective decision-making is at the core of success. One invaluable lesson I’ve embraced is a decision-making framework inspired by A/B testing, but applied to team dynamics and innovation.
This framework evolved from my experience managing diverse team members at Shopper. The clash of these two worlds often led to disagreements that were challenging to resolve without showing favoritism.
Instead of making a unilateral decision, we decided to test both theories and let the data be the judge. This practice not only diffused tension but also empowered each team member to push their ideas forward independently. It encouraged continuous learning and innovation.
For instance, when faced with changing our homepage design, the development team wanted one approach, while the marketing team opposed it. Instead of choosing sides, we implemented a lightweight A/B test.
The results were accessible to the entire team, fostering a collaborative spirit.
Apply the OODA Loop Framework
In my entrepreneurial journey, I’ve always valued data-driven decision-making. My go-to framework is the “OODA Loop:” Observe, Orient, Decide, Act.
First, I gather relevant data (Observe). Then, I analyze and contextualize this information in relation to my venture’s goals (Orient). Based on this understanding, I make a decision (Decide) and swiftly implement it (Act). This iterative process ensures I’m responsive to changing circumstances and allows for continuous refinement based on real-world feedback. It’s about being informed, agile, and adaptive.
Adopt a Structured, Data-Driven Approach
In my journey with 5D Vision, I’ve learned the vital importance of data-driven decision-making. To streamline the process, I’ve developed a structured approach:
I start by collecting all relevant data, from market research to financials, to inform my choices. Then, I analyze this data thoroughly, identifying patterns and prioritizing factors that will significantly impact the venture. We set clear goals, ensuring a vision of success. Exploring various alternatives is important, evaluating their pros, cons, and associated risks. Seeking input from my team and advisors provides valuable perspectives that can’t be overlooked.
With this data-driven foundation, I make informed decisions, trusting the process and my research. After implementation, continuous monitoring allows for adjustments based on real-world results.
Look into After Action Reviews
We use a process borrowed from the military—the After Action Review. We call them “roundtables” at our agency, but the principles are the same.
Essentially, this is a meeting triggered by the end of a project or by an event during the project where something has gone exceptionally wrong, or exceptionally well. All relevant stakeholders within the business gather to communicate their perspective, with no blame or judgment, just the facts. Then, we analyze what lessons we’ve learned and how to apply them to decisions going forward.
Employ a SWOT Analysis
For the success of our entrepreneurial endeavors, decision-making is crucial. We employ both strategic reasoning and a data-driven framework in our approach.
The “SWOT analysis” is a key technique we employ to evaluate the enterprise’s strengths, weaknesses, opportunities, and threats. This structured analysis enables us to identify the potential hazards and benefits of each decision.
In addition, we frequently utilize a “decision matrix.” We designate weights to various decision criteria and evaluate options based on these criteria, which enables us to make more objective decisions.
We have learned the importance of balancing risk and reward as an essential lesson. It is essential to be willing to take calculated risks while contemplating their potential impact on our business objectives.
Ultimately, we value teamwork. We welcome various ideas and open dialogue to make well-informed, entrepreneurial decisions. It has helped us navigate the changing landscape of our businesses.
Try the P.I.C.K. Method
Decision-making can be a tough business, whether in a work scenario or in your personal life. But good decision-making is empowering, motivational, and feels good!
Approaching decision-making with a structured and thoughtful approach helps you make more informed choices, minimize risks, and increase the likelihood of achieving your goals.
When making a decision, consider using the “P.I.C.K.” Method:
P – Prioritize: List your criteria and prioritize them by importance.
I – Identify: Generate alternatives and options.
C – Compare: Evaluate each alternative against the criteria.
K – Kudos: Choose the option with the highest score.
Remember that decision-making is a skill that can be honed and improved with practice and experience. Trust your judgment, but be willing to adapt if new information arises.
Focus on Risk-Tolerance
Approach with a risk-tolerance-based mindset. Every action or venture comes with matching risks that decision-makers should consider thoroughly. You cannot grow your enterprise without taking risks, but at the same time, you need foresight on the risks accompanying these decisions and if you’re willing to stomach them once they materialize.
Growth comes with the right mindset and planning. As an entrepreneur, it is your responsibility to create decisions that will ultimately upscale your revenue because the business world won’t be forgiving to those who don’t do their homework.
Use the Pros and Cons Framework
In my entrepreneurial ventures, I like to use Pros and Cons. When faced with a decision, I make a list of all the pros (the good stuff) and cons (the not-so-good stuff) for each option I’m considering. This helps me see the big picture and weigh the advantages and disadvantages. I also try to think about the long-term impact of my decision and whether it aligns with my goals and values.
Sometimes, I even talk it out with a trusted friend or mentor to get different perspectives. Remember, it’s okay to take your time when making important decisions, and don’t be afraid to go with your gut feeling if all the pros and cons point in one direction—trust your instincts!