March 21, 2019
The art of making successful decisions as a small business owner
A guide to finding the sweet spot between applying your own entrepreneurial intuition and taking advice when making decisions
Being a small business owner calls for endless decision-making – both big and small. Often you have a little voice saying, go with your intuition and apply instinctive gut-feel, be entrepreneurial and just do it.
But often there is another voice saying, be cautious, don’t be too hasty. Sometimes it pays to follow the herd – others might just know what they are doing.
In this piece, we provide a tip on how to hit the sweet spot between relying on the power of your own intuition that brought you into the small business world in the first place and knowing when to listen to advice.
The intuitive voice in your head – telling you to do it your way
Intuition – what Richard Branson has described that tingle – is strongly associated with successful entrepreneurial decision-making. We know that intuition is not a flimsy, spur-of-the-moment thing. It is something that is grounded in the entrepreneur’s past experience. It allows the business owner to look at the shapes and patterns – the heuristics – that have worked in the past and apply these to the current situation. Intuitive first reflex thinking provides a shortcut to successful decision-making. It is what the psychologist’s call, System 1 thinking. It is decision-making based on powerful emotion. It gives entrepreneurs the confidence to put aside overly cautious bureaucratic-style advice that stifles creativity and action.
But decision-making is complicated. There are many examples of where the do it my way spirit wins the day. But there are other example of where this can end in disaster. For example, there are numerous stories of mountaineers so determined to reach the summit of Everest that they totally ignore the professional advice of the experienced Sherpas and end up perishing near the summit. They are warned that they may be able to reach the summit but will not succeed in getting down safely before bad weather arrives.
So, when it comes to decision-making we know there are a lot of cognitive biases in play. These tell us that intuitive decision-making is not a straightforward slam dunk way of always making successful decisions. It may be the first reflex of entrepreneurs, but it often needs tempering with advice from others.
The voice in your head that says listen to advice – follow the herd
This leads us to the voice in the head that is telling you that you should listen to advice and take account of information and the facts. This takes us to what psychologists call System 2 thinking – the power of more rational thinking, where we engage our brains with the hard evidence.
However, to complicate matters further, there are illustrations where going against the facts and technical advice has been the right thing to do. For example, Sullenberger, the pilot of the plane that successfully ditched in the Hudson River without any loss of life, decided to ignore the technical, informed, professional advice coming from air traffic controllers. Had he followed their advice he would not have successfully landed the plane. So, hitting the sweet spot between intuition (doing it my way) and taking advice is complicated. How do you know what to do?
How to arrive at the point of Informed Intuition
Given the often two contradictory voices in the head of many small business owners, how do you arrive at what you might call the point of informed intuition? On the one hand you are listening to your entrepreneurial gut instincts, but on the other hand you are sensible enough to take in expert advice. Here are three ideas:
One: Change your angle and perspective on the decision
One route to informed intuitive decision-making is to step back and look back in at the problem from the third corner. A lot of poor decision-making results from inside-out thinking – where the decision is made from within your own processes and systems. Instead, take the outside-in perspective. Look back in at the issue from the perspective of an outsider and let this inform your decision. A lot of poor decisions are due to getting locked into a binary win/lose perspective. They do not step back and take the ternary perspective – looking at the issues in terms of the bigger concepts and principles in play. Remember the saying, however thin you slice it there are always two sides. In sum, change your angle of thinking.
Two: Make an appointment with yourself to arrive at key decisions
Another route to informed intuitive thinking is to buy yourself the time to hit the sweet spot between intuitive System 1 and more rational System 2 thinking. One way of avoiding rushing headlong into an overly emotional decision, or equally a torturous long winded overly rational decision, is to set an appointment with yourself to make this decision. Set aside a period of time, when you will be free from interruptions and distractions, to review the pros and cons of making a particular decision. You might want to enhance this process by seeking out a critical friend to act as a sounding board and take them through your thinking.
Three: Take the emotion out of the decision by opting for a choice moment
Another route to hitting the sweet spot between following the intuitive voice in your head and tempering this with advice from others is to find a choice moment in key decision scenarios. Let’s explain how this process works: buying that few seconds of extra time can help you improve your decision-making.
When faced with a decision it is important to create time and space between the stimulus (cause) and your reaction (the effect) of that stimulus. If you react immediately or over emotionally, it could have a negative counter-productive effect. This leads us to the concept of there being a Choice Moment – a time out period – in which you can avoid overreaction. Let us break down the sequence of events in a typical scenario:
- There is the initial cause or stimulus.
- At this point you could make a hasty emotional response leading to unhelpful outcomes.
- The alternative is to seize a moment to review the possible reactions and options open to you.
- This leads to your Choice Moment where you need to decide what action will provide you with the best outcomes.
Thus, a good piece of advice is to think ‘Choice Moment’ before you react to what you may perceive to be an unhelpful or negative intervention. Use this pause to reflect on the options open to you with your next response or action. Pick a response – make a decision – that will help you best achieve your business goals.
We hope you have found this blog on decision-making as a small business owner helpful. At Excellence Tools we are dedicated to helping small businesses make the right marketing decisions.
If you would like more information about DVL Smith’s Excellence Tools Programme – A Success Blueprint – Seven Excellence Tools for Small Businesses – visit the Excellence Tools Programme page.
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