Decide quickly and correctly: A brief overview of skills and techniques for managers

What it’s all about

Making quick and correct decisions is an essential skill for managers. The following skills and techniques support managers in this.

Basic skills

Situational awareness

This term describes the ability to understand the environment, events and dynamics in their entirety and interaction and to anticipate how they might develop. To do this, managers must continuously gather up-to-date information by using real-time data and current reports to get a clear picture of the current situation. Analysing trends is also very important in this context, as observing patterns and developments can help to predict future events. Furthermore, experienced managers develop an intuitive ability to grasp situations quickly, but this should always be underpinned by data and facts to ensure well-founded decisions.

Prioritising

Another important technique is prioritisation. Managers must be able to prioritise tasks and decisions according to their urgency and importance. This helps to focus on the most important and urgent tasks and prevents less important tasks from taking up unnecessary time and resources. The Eisenhower matrix is a helpful tool for sorting tasks according to these criteria.

Communication

Effective communication also plays a crucial role. Leaders must be able to communicate clearly and concisely to ensure that everyone involved understands the decisions made and can act accordingly. This includes communicating the decision itself as well as the reasons and expected outcomes.

Delegation

Delegation is another important technique that helps managers make faster decisions. By delegating tasks and responsibilities to competent employees, managers reduce their own workload and focus on more strategic decisions. Trust in the team and the ability to delegate tasks effectively are crucial here.

Technology utilisation

The use of data analysis tools and other technological aids speeds up the decision-making process considerably. These systems provide fast and accurate information that enables managers to make informed decisions in less time.

Risk assessment

Another aspect is risk assessment. Managers need to be able to quickly identify and assess potential risks in order to minimise their impact on the organisation. A structured risk management strategy helps to recognise risks at an early stage and take appropriate measures.

Further training

Finally, continuous training also plays a key role. Managers should always endeavour to further develop their knowledge and skills in order to meet the constantly changing requirements. Regular training and education, dialogue with other managers and the study of current research and best practices help to improve decision-making skills.

Decision-making techniques

SWOT analysis: recognising strengths and weaknesses

The SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is one of the most basic and widely used decision-making techniques. It helps managers to identify internal strengths and weaknesses as well as external opportunities and threats that are relevant for decision-making. This holistic view enables managers to make well-founded strategic decisions based on the actual circumstances.

Application of the SWOT analysis:

Strengths: What is working well? What resources and competences are available?
Weaknesses: Where is there potential for improvement? What internal challenges need to be overcome?
Opportunities: Which external factors can be utilised positively? Are there new opportunities for action or technological developments?
Threats: What external dangers could jeopardise success? How can you react to them?

Decision tree: visualisation of options

A decision tree is a graphical tool that visualises different decision paths and their possible consequences. This method helps to visualise and systematically evaluate the possible outcomes of different courses of action. Decision trees are particularly useful for structuring complex decisions with multiple stages and uncertainties.The creation of a decision tree:

Nodes: Represent decision points or events.
Branches: Represent the different options or paths emanating from a node.
Sheets: Show the end results or consequences of each option.

Cost-benefit analysis: Evaluating economic efficiency

Cost-benefit analysis is a quantitative method for evaluating the financial impact of different decisions. By comparing the estimated costs and expected benefits of each option, managers can make an informed economic decision.

The steps of cost-benefit analysis:

Identify the costs and benefits: Identify all relevant costs (e.g., capital expenditures, operating costs) and benefits (e.g., revenue increases, cost savings).
Quantification: Express the benefits in monetary units.
Comparison and evaluation: Compare the costs and benefits to determine the most economically advantageous option.

Benefit analysis: Qualitative evaluation of alternatives

Utility analysis is a technique for evaluating different alternatives based on a set of criteria that are weighted according to their importance. Each alternative is then evaluated against these criteria to determine the best option. This method is particularly useful when decisions are not based solely on financial considerations.

How to carry out a utility analysis:

Determine criteria: Determine relevant decision criteria (e.g. quality, flexibility, time required).
Weighting the criteria: Assign weightings to the criteria according to their importance.
Evaluation of the alternatives: Evaluate each alternative on the basis of the criteria and total the weighted evaluations.

Delphi method: utilising expert knowledge

The Delphi method is an iterative survey technique in which expert opinions are collected and consolidated in order to make an informed decision. This method is particularly useful for complex and uncertain topics where expert knowledge is crucial.

The steps of the Delphi method

Rounds of questioning: Several rounds of questioning in which experts give their opinions and assessments anonymously.
Consolidation: The results of each round are summarised and fed back to the experts to allow for re-evaluation.
Consensus building: This process is repeated until a consensus is reached.

Pareto analysis: setting priorities

Pareto analysis is based on the Pareto principle (80/20 rule) and helps to identify the most important factors that have the greatest impact on a problem. This method is often used to prioritise and focus resources on the most important tasks.

The application of Pareto analysis

Data collection: Collect relevant data (e.g. sources of error, customer complaints).
Sorting: Sort the data according to its frequency or influence.
Identification of key areas: Identify the few factors that have the greatest influence.

Decision matrix: Systematic evaluation

A decision matrix, also known as an evaluation matrix, is a grid that compares alternatives and decision criteria. This method enables a systematic evaluation of the advantages and disadvantages of each option.

The creation of a decision matrix:

List alternatives and criteria: Determine the alternatives to be evaluated and the decision criteria.
Evaluation and weighting: Evaluate each alternative against the criteria and weight the evaluations according to their importance.
Totalling: Add up the weighted ratings to identify the best alternative.

Scenario analysis: future-oriented planning

Scenario analysis creates and analyses different future scenarios to better understand the potential impact of different decisions and to prepare for different developments. This method is particularly useful for strategic planning in uncertain environments.

The steps of scenario analysis:

Identify key factors: Identify the most important factors and uncertainties that could influence the future.
Developing scenarios: Develop various plausible future scenarios that reflect these factors and uncertainties.
Analyse the scenarios: Evaluate the impact of the different scenarios on decisions and develop strategic options.

Six Thinking Hats: Change of perspective

The Six Thinking Hats method, developed by Edward de Bono, is a technique in which different thinking styles are systematically applied to obtain a comprehensive perspective on a decision. Each “hat” represents a specific thinking style (e.g. emotional, optimistic, critical).

The application of the Six Thinking Hats:

White hat: Focus on objective data and facts.
Red hat: Inclusion of feelings and intuition.
Black hat: Critical assessment of risks and problems.
Yellow hat: Optimistic view of opportunities and benefits.
Green hat: Creative thinking and generation of new ideas.
Blue hat: Process control and meta-thinking.

Brainstorming and mind mapping: promoting creativity

Brainstorming and mind mapping are creative techniques for collecting and organising ideas that can then be incorporated into the decision-making process. These methods promote collaboration and the generation of innovative solutions.

Implementation of brainstorming and mind mapping:

Brainstorming sessions: Groups of people generate a variety of ideas in a short period of time, without immediate judgement or criticism.
Mind mapping: Visualising ideas in order to recognise and further develop connections and structures.

The OODA loop

The OODA loop, developed by Colonel John Boyd, is a dynamic decision-making model that was originally designed for military purposes but is now used in many areas of leadership and business management. OODA stands for Observe, Orient, Decide and Act. This model provides a flexible framework that helps managers to react quickly and effectively to changing circumstances.

The application of the OODA Loop:

Observe (Observe): Gather information about the current situation. This includes both internal and external data sources.
Orientate: Analyse and process the information gathered to gain a clear understanding of the situation. This step involves assessing your own position as well as environmental influences.
Decide: Making a decision based on analysing and evaluating the information.
Act: Implement the decision made and then monitor the results to repeat the cycle.

PDCA cycle

The PDCA cycle (Plan-Do-Check-Act), also known as the Deming circle or Shewhart cycle, is a proven model for continuous improvement and quality management. Developed by Dr W. Edwards Deming, this iterative approach is used in many industries to optimise processes and improve decisions.

The application of the PDCA cycle:

Plan: In the planning phase, managers identify a problem or improvement opportunity and develop a detailed plan to address it. This phase includes setting goals, analysing the current situation, identifying problems and developing hypotheses to solve these problems.
Do (execute): In the execution phase, the plan is put into action. This includes the implementation of the developed measures and processes on a small scale or as a pilot project to test their effectiveness.
Check: In the check phase, the results of the implementation are analysed and evaluated. This includes collecting data, reviewing performance against set targets and identifying deviations or unexpected problems.
Act: In the act phase, necessary adjustments are made based on the results of the review phase. If the plan was successful, the measures are scaled and extended to other areas of the organisation. If problems are identified, the plan is adjusted and the cycle is repeated.

Conclusion

By combining basic techniques and using structured methods such as the SWOT analysis, the decision tree or the cost-benefit analysis, managers can better analyse complex situations and implement strategic decisions in a targeted manner. Each technique has its specific strengths and areas of application, and a combination of different methods is often the most effective. Ultimately, these techniques help to improve the quality of decision-making and ensure the long-term success of the organisation.