How to Prevent Bad Decisions

The job of a leader is to make good decisions, particularly when the economy is soft, as it is at the moment. In the franchise relationship the franchisor is the leader. While this tip is especially dedicated to senior franchisor executives, anyone facing an important decision will find it useful.

Not all decisions are equal. An important decision has three characteristics:

It cannot be easily reversed.

It will relate to boosting prosperity or keeping the business safe.

It is likely to significantly impact on others.

Important decisions are usually also complex which is why the following process is so useful. These steps are backed by good psychological research. Practice them and you’ll immediately be a better franchisor.

Seven strategies and one tip

1. Don’t assume a good decision will be good for everyone. Sometimes the best decision is the “least bad” decision because the options aren't great.
2. Gather all the facts. We all have a tendency to filter out information we don’t find interesting, so be careful not to be selective in what you pay attention to. Keep asking “have we got all the facts?”
3. Get input from relevant people. These will be people who have a significant stake in the outcome or who have relevant expertise. If you form a task force of smart people, ensure some are also emotionally intelligent.
4. Minimise the impact of egos. Wise people change their minds in the face of new information. They appreciate that what is right is more important than who is right. For instance, one of our clients regularly reminds his team to hold strong positions loosely.
5. Identify all options. Put everything on the table, even options that are disturbing. Remember you don’t need to act on these. But in naming them you open the door to honest, frank discussion.
6. Draw up criteria. Assess the options against these to see which get more ticks. For instance: What is the impact on franchisor profitability? What is the impact on franchisee profitability? Is it consistent with our brand and culture? How easy would it be to implement?
7. Pressure test preferred options. Play the devils advocate. Actively look for gaps, weaknesses and risks. Explore how readily these can be fixed or minimised.

These habits will greatly improve the quality of your decisions and your ability to intuitively identify more subtle threats and opportunities.

A final tip. Someone once said to me, “Never make a decision when you’re too - too mad, too sad, too glad, too anything!” I think this is great advice because a common source of poor decision making is impatience. Just like a good wine, important decisions are sometime best allowed to sit for a time.

Until next time,

Greg Nathan

P.S. Last week our CEO, Karli Furmage, sent a Bulletin with a link to our Franchisee Crisis Kit. Thanks for your feedback on this. Our thoughts remain with those who have been affected by floods or fires.