The competitive advantage of quick decision-making: 5 tips for growth companies

It's not the 'big eat the slow'. It's 'the fast eat the slow', a principle that also applies to business. The decision-making process can either hold back or advance a company's ability to respond to market changes. As a company grows, the distances between employees and sources of information increase in both time and space. The decision-making process can become fragmented, overloaded, or bureaucratic. Don't let your company get stuck when you can speed up decisions without compromising their outcomes.

But where in the decision-making process and how can you make quick decisions? This article offers fresh perspectives and tips for optimizing the decision-making process, especially for growing companies.

The steps of the decision-making process can be defined as follows:

1. Identifying the need for a decision
2. Gathering information
3. Recognizing alternatives
4. Weighing options
5. Monitoring the decision-making process

1. Identifying the Need for a Decision

The first pitfall in fast decision-making is the vague identification of the problem at hand. It’s essential to start by recognizing the need for a decision as a clear solution to a specific problem. Companies may be tempted to make decisions without fully considering the entire issue, which often leads to treating symptoms instead of addressing the root cause. For instance, a visit to the car dealership might involve asking, "Which car should I choose?" when a better question would be, "How should I best arrange my daily commute?" Without a clear understanding of the problem, the decision-making process may slow down or even result in incorrect decisions. Mistakes lead to setbacks or delays in subsequent decisions. Understanding and precisely defining the problem is itself a form of strategic decision-making. It lays the foundation upon which faster processes can be confidently built.

Tip 1: Take the time to clearly define the problem.

2. Gathering Information

More information often brings more confusion—at least beyond a certain point. Where can information be gathered from? What information is useful for this decision? What information is reliable? How much information is sufficient? Information helps to solve problems, but there can be too much or too little of it. Excessive data gathering can slow down the process. Therefore, it’s crucial to define what information is essential and what is not. Planning for data collection and management in advance ensures that helpful data is available when needed.

Furthermore, data may not be in a readily accessible form when it’s needed. As companies grow, there’s a risk that information within the organization becomes fragmented. This is why technology plays an increasingly vital role in data collection today. For example, thanks to AI-driven B2B tools like Woorat, competitor analysis has become increasingly accessible to even smaller businesses and startups. Tools can automatically gather and prioritize essential information, which significantly speeds up the process. Data analytics and automation ensure that the right information is available at the right time.

Tip 2: The information gathered through tools is not meant to overwhelm the decision-making process but to support it.

3. Recognizing Alternatives

The information gathered should be used to narrow down options to those that are realistically capable of solving the identified problem. Sometimes there are only a few alternatives, but often the decision-making process is complicated by nuances. For instance, when considering suppliers, one might reflect on the alignment of company values, prices, and the importance of post-inquiry offers and potential counteroffers. It’s important to identify key alternatives to avoid juggling all possible solutions.

You can, for example, choose specific criteria that alternatives must meet. Criteria might include cost, schedule, or risk management. This helps narrow down the alternatives to those most likely to solve the problem and makes it easier to compare the remaining options. If you add criteria as you go, you may end up in a vicious cycle that keeps generating more and more alternatives.

Tip 3: Including multiple predefined criteria simplifies the comparison of alternatives.

4. Weighing Options

Cut the unnecessary, meaning remove irrelevant factors when comparing alternatives. Criteria aligned with your goals help to pinpoint the key features of each option. Sometimes, criteria might conflict, in which case certain factors must be prioritized over others. This can be challenging, as the weight of criteria is not always quantifiable. In such cases, it’s important to revisit the definition of the original problem. Additionally, you can use tools like SWOT analysis, cost-benefit analysis, and other decision-making tools to lay out the key issues before the decision-makers.

It’s important to bring in as much relevant information as possible for the evaluation, but the final decision is always subjective. Decision-making tools act as “glasses” for decision-makers, and with AI, these glasses can now offer analyses and even recommendations. However, in all but low-risk routine decisions, it’s crucial to avoid over-reliance on tools like AI for recommendations or analyses. When weighing complex issues, the decision-maker's experience, intuition, and an overall understanding of the company are irreplaceable. The advantage of making a sound decision is that it reduces the need to spend time correcting past mistakes.

Tip 4: Tools and analyses provide lenses through which to view the issue, but trust your own judgment when making the final decision.

5. Monitoring the Decision-Making Process

Two irons are already in the fire, but the third must be placed in the forge. Decisions are made for today’s problems and next year’s surprises, but the decision-making process itself also needs to be developed. However, it’s impossible to learn from mistakes and improve if evaluation is the exception rather than the rule. By evaluating regularly, you can identify bottlenecks in the decision-making process and ensure it doesn’t slow down due to unnecessary friction.

Monitoring can be done for the entire process or for each phase of decision-making. Financial results, such as sales figures and cost efficiency, measure the direct impact on the business. Soft metrics can include employee motivation, collaboration between teams, and the clarity of the decision-making process. Additionally, it’s worth assessing how well decisions align with company values and strategic goals. Under pressure, there may be a temptation to make compromises, but the company must remain true to its values to ensure long-term success.

Tip 5: Feedback discussions and evaluations should measure not only numbers but also the alignment of decisions with long-term goals.