The right business decision

As a small business owner, you are faced with a multitude of decisions every day.
If it’s just you managing your business, all decisions, risks, challenges and work rest
completely on your shoulders. There’s no one else to share the burden with, bounce
ideas off or sense-check whether a key decision is the most appropriate one for the
future of your business.
Multitude of decisions
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Although this feels exciting at times, it can also become overwhelming, as developing
and running your business on your own might eventually lead you to start doubting
your own judgement. Wrong decisions can damage your business, and they can
sometimes be traced back to how they were made. The fault, however, may lie in the
way the mind works, rather than in the decision-making process.
In other words, how the mind works can sabotage your decisions.
Multitude of decisions
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If you’re pondering an important decision, be aware of the disproportionate weight that
the mind gives to the first information it receives. If this information includes details
such as initial impressions, key words or data, these will sway your judgements.
Assume that you are budgeting for next year and have no knowledge of branding costs.
How do you answer the first and then the second question?
.
- Is the cost of rebranding a business greater than £2,000?
- What is your best estimate for rebranding your business?
The swaying detail
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Most possibly, your answer to the second question was an amount greater than £2,000.
This is because the terms ‘greater’ and ‘£2,000’ established points of reference in your
mind which influenced your thinking, thus directing you to a higher figure.
This approach can be used in subtle and elaborate ways to influence complex
decisions, as explained by Daniel Kahneman in his book ‘Thinking, fast and slow’.
The swaying detail
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Prior to making important business decisions, always view a problem or scenario from
different perspectives, using alternative starting points and approaches, rather than
going with the first thought or line of information.
Since the way a problem or opportunity is posed can influence how you think about it,
reframe it in various different ways and consider how your thinking changes for each
version. Also, do analyse and consider the problem or opportunity on your own before
consulting others so as not to be influenced by their ideas from the outset.
So, what can you do?
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Then, keep an open mind and seek opinions from a variety of people. When consulting
them, do not include your initial thoughts and considerations so as not to influence
their thinking. This will enable you to gain real fresh perspectives.
If your decision is linked to a business negotiation, think through your position before
you read the other party’s proposal so as not to take a starting position which has
already been influenced by their intended outcomes.
So, what can you do?
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In business, as in life, loss aversion leads our minds to favour minimal or no change to
our status quo. This links to the desire to protect our ego from damage, which, in turn,
further strengthens our attraction to the status quo.
Detaching from the status quo means taking action, and when we take action we take
responsibility, while also opening ourselves to criticism and regret. We may thus look
(even subconsciously) for reasons to do nothing, which is a safer and more comfortable
course.
The status quo attraction
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When making key decisions for your business, choose the status quo only if it’s indeed
the best choice. Maintaining it just because it’s comfortable or safe may not necessarily
enable you to avoid losses.
If you think that your decision may be being biased by your (unconscious) preference
for the status quo, refer back to your business objectives and assess how they would be
served by the current situation. Are there any aspects of the status quo that are acting
as a barrier to your objectives?
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So, what can you do?

Furthermore, ask yourself if you’re unconsciously exaggerating the costs and risks of
changing from the status quo. Question whether you would actually choose the current
situation if it was simply another option. Also, examine the status quo alongside all
alternatives in terms of their present and future outcomes.
Finally, if you sense that your indecision is being fuelled by too much analysis, thus
encouraging you to default to the status quo, be brave and go for the decision that your
business needs in order to grow and succeed.
So, what can you do?
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As a business owner, you cannot avoid making decisions, and the mind cannot avoid
being biased by the wide range of information that it considers. This means that it may,
at times, hinder you rather than help you reach the right decision.
Being aware of this is important in addition to being clear about your objectives, while
also defining all possible alternatives, accurately weighing their costs and benefits and
keeping an objective stance during the decision-making process.
This will enhance your competence and confidence in the decisions you take.
The right business decision
www.angelabelotti.com

www.angelabelotti.com
The right business decision