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Management Matters - How to Make Effective Decisions

Management Matters: is a New Article series dealing with the issues that arise when managing personnel and how to optimize your current staff in a company.

How to Make Effective Decisions
August 1st, 2008

As the hiring manager of your company, have you ever been on the edge about whether or not to hire a potential new employee? How do you make the right decision? When making crucial decisions it is important to look at the whole picture. It would be beneficial to know how much it costs per new hire at your company, which will help you evaluate the pros and cons of your decision. Will the new hire be worth the money it will cost to hire him or her? As the hiring manager, you need to look at what the new hire will add to the company. Also look at where your company stands as a whole. Can you afford to take a risk right now? Here are four steps to guide you in the decision making process:

  1. Evaluate the initial impact of the decision
  2. Consider the effects of the decision to a broader range
  3. Consider the cost/benefit of the decision
  4. Pay attention to your gut feeling

If you are a visual learner, then try writing a pro-con list, if you are a verbal learner, then find a confidant that you can talk it out with, if you are an internal person, then think it over for a few days.

When faced with a difficult decision to make, it is important to look at the problem form multiple points of view. Mindtools.com identifies six different hats to wear in the decision making process.

  • White Hat:
    With this thinking hat, you focus on the data available. Look at the information you have, and see what you can learn from it. Look for gaps in your knowledge and either try to fill them or take account of them.

  • Red Hat:
    'Wearing' the red hat, you look at the decision using intuition, gut reaction, and emotion. Also try to think how other people will react emotionally, and try to understand the intuitive responses of people who do not fully know your reasoning.

  • Black Hat:
    When using black hat thinking, look at things pessimistically, cautiously and defensively. Try to see why ideas and approaches might not work. This is important because it highlights the weak points in a plan or course of action. It allows you to eliminate them, alter your approach, or prepare contingency plans to counter problems that arise.

    Black Hat thinking helps to make your plans 'tougher' and more resilient. It can also help you to spot fatal flaws and risks before you embark on a course of action. Black Hat thinking is one of the real benefits of this technique, as many successful people get so used to thinking positively that often they cannot see problems in advance, leaving them under-prepared for difficulties.

  • Yellow Hat:
    The yellow hat helps you to think positively. It is the optimistic viewpoint that helps you to see all the benefits of the decision and the value in it, and spot the opportunities that arise from it. Yellow Hat thinking helps you to keep going when everything looks gloomy and difficult.

  • Green Hat:
    The Green Hat stands for creativity. This is where you can develop creative solutions to a problem. It is a freewheeling way of thinking, in which there is little criticism of ideas. A whole range of creativity tools can help you here.

  • Blue Hat:
    The Blue Hat stands for process control. This is the hat worn by people chairing meetings. When running into difficulties because ideas are running dry, they may direct activity into Green Hat thinking. When contingency plans are needed, they will ask for Black Hat thinking, and so on.


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