Decision making is all about employing one’s mental processes to come up with a final choice after careful consideration of several options or alternatives. The outcome of your decision could significantly affect your work, your business, and even your life. This is why in entrepreneurship, making intelligent decisions is regarded as very important because it could mean the difference between success and failure of your endeavor.

Components of Decision-Making

In order to make intelligent decisions, you need to identify the four components that are instrumental to making the right choices. 1. Context. This involves the environment where the decision should be made on. You should get all the relevant information, the facts, the data, and everything else you need to help you make a decision. 2. Objectives. It is important to have a clear understanding of what you hope to achieve after making a decision because this will serve as a guide in the process of deciding. Your objectives should make the whole process logical, easy, and a lot less stressful. 3. Alternatives. Know all the available alternatives before making a decision. Analyze everything carefully and do not limit your options to a very small number. Gather as many options as possible before making a decision and find out the risks involved. 4. Criteria. If you have knowledge of your objectives and you have all the information you need, coming up with a criteria should not be difficult. This could be hard or soft criteria; hard includes budget and time allocation whereas soft includes employee satisfaction and organizational disruption. Assess your criteria fully before making a decision.

The Six Thinking Hats

The six thinking hats, otherwise referred to as the de Bono Hats System, comprise six thinking styles created by Edward de Bono, a physician and consultant, to help you make intelligent decisions. These are: white hat, red hat, black hat, yellow hat, blue hat, and green hat. Before deciding on anything, you must utilize all six hats to come up with a rational, effective, positive, and feasible decision.

White Hat

This thinking hat requires you to focus on the available data and find out what learning you can get from it. You are to remain very objective while under this hat and make sure you analyze the data you have carefully and comprehensively.

Red Hat

This thinking hat requires you to listen to your intuitions, to your gut reaction, and feelings. You would also consider how others will react to your decision, especially those who are not very familiar with you and the way you make decisions.

Black Hat

This thinking hat looks at the negative side of things. You would need to be cautious and defensive when under this hat and find out what would happen if the ideas or the decisions you make do not work. This helps you prepare for contingency plans and be proactive should things go wrong in the process.

Yellow Hat

This thinking hat looks at the positive side of things. You would need to examine the benefits of a certain idea or decision and pinpoint possible opportunities. This helps to motivate you to keep going even when faced with adverse reactions from others.

Blue Hat

This thinking hat is used primarily for process control wherein people gather for meetings and brainstorm on contingency measures and new ideas. This also employs the aid of the Black Hat and must be used alongside it, should there be a need to do so.

Green Hat

This thinking hat utilizes creativity. It requires you to think out of the box and be resourceful when addressing an idea, an issue, or a concern. The green hat strives to find more options and solutions when problems come your way.

Decision-Making in Entrepreneurship

Entrepreneurship involves managing, building, and molding of ideas, endeavors, businesses, and ventures. A large part of it relies on making intelligent decisions in order to come up with positive outcomes. In small businesses for example, you will be faced everyday with problems revolving around your people, your products and services, your finances, and your customers. If you do not know how to make effective decisions, you could risk a lot of things, including the lack of support from your people, driving customers away, and ultimately, losing your business. For this reason, decision-making is rendered essential in entrepreneurship because although you may have the drive and the most remarkable ideas in your head, if you cannot make sound decisions, all these will be put to waste