Have you ever made what you thought was a good decision, but ended up getting a bad result?
A team we worked with in the past was expanding, so they needed to choose a location for an office in a new city. They developed their Musts & Wants and evaluated several alternatives. After comparing four locations, an option located in a new industrial park was the clear winner.
So the team made the choice and went for it.
I saw the team leader several months later and asked how things were going.
“Terrible” she replied.
“We didn’t know a huge semiconductor plant was being planned just a few miles away. Traffic has been unbearable. Our associates gripe about it constantly and it has really affected morale. We need to bail and find a better location. It’s going to blow up our budget.”
What went wrong?
Exactly that. The team should have asked “What could go wrong?” before making their decision. Chances are they would have discovered the issue and avoided a disastrous result.
Which leads us to our final letter in our Decision Making Series:
R – Risk
Secret: Prepare to be wrong
In their book Decisive, authors Chip and Dan Heath describe several “villains” when it comes to making smart decisions. One of the top villains is assuming we know more than we actually do, thinking we can accurately predict the future. This results in ignoring key risks which could destroy the successful outcome of a decision.
To counteract this threat, we must ask “What can go wrong?”
Seems like an easy thing to do, but in reality we rarely do it as often as we should. Why not?
A few reasons actually - we don’t want to be viewed as being negative, we’re sometimes too confident, we may not have the time, or we don’t want to be perceived as weak by discussing potential problems.
Have you or your team ignored key risks because of any of these factors? Although it may seem hard, discussing risks is a very important part of the decision-making process that should not be ignored.
So before finalizing your next decision, here are four easy questions to ask:
Step 1: “What can go wrong with this course of action?”
Step 2: “What is the probability this will happen? Is it high, medium or low?”
Step 3: “What is the seriousness (severity) if this happens? Is it high, medium or low?”
Step 4: “What can we do to reduce the probability or seriousness of the key risks?”
Discussing risks will help not only help you avoid disaster, but you’ll be able to save time, money, and your sanity.
Next time you face an important decision, use the CAR approach and level up your team’s decision-making power!
C - Establishing good decision Criteria
A - Seek multiple options by forming Alternatives
R – Manage Risks as best you can
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