There has always been a mystique around confident decision makers. It’s a coveted skill and one that’s mentioned in nearly every job description for a leader. The fictional ideal of strong decision makers is someone who makes smart, key decisions based on gut instinct.
Great decision makers, though, rely on more than their intuition. In fact, it’s a much more nuanced set of skills than someone who shoots from the hip. Great decision-makers understand that the process of choosing the best path is both an art and a science.
Although it requires an artistic and creative skill set, choosing the right path in business is a process that can be learned, and there are tools available that will guide you and inform those decisions, leaving you more confident in how you choose to proceed.
Probably one of the more complicated components to decision making is removing personal feelings. Being objective and making choices without over-laying your own feelings is difficult, but it’s easier when you have the right kind of information to guide you.
Data-driven decision making (DDDM) is the term used to describe using hard data to help choose the right path. Once the provenance of large enterprises, DDDM has become available to small-to-medium sized companies thanks to the accessibility of the cloud, Big Data, and business intelligence.
Much of the critical data needed for decision making converges in the office of finance. Because the finance team is the hub of the business through which most department capabilities flow, it makes sense that they should be valuable partners to decision makers within the organization, providing insights into a company’s data and financials.
Combining data with knowledge is where art and science meet. Using hard data provided in reports, decision makers are then able to marry their business experience with a rich array of information to mitigate risks and make informed choices.
Understand the Outcome
Just like taking a trip, knowing where you want to end up makes choosing the path to your destination a little clearer. Understanding your goal is only part of the equation, however.
As you contemplate a decision, it’s easy to focus solely on the outcome that you’re hoping for. Business decisions, however, don’t exist in a vacuum. While a decision may be an effective means of meeting one goal, it could derail others.
This is another way in which both elements – art and science – combine, and where the finance team with the right tools can help focus the business. Modeling the decision-related data and offering visualizations to stakeholders with dashboards, the office of finance can help limit unintended side effects of a decision.
Ask Open-Ended Questions
Mitigating risk is an important part of the decision-making process. It can take some creativity to understand what all of the potentials of a decision may be.
The art of decision making requires asking some open-ended questions as to the impact of the choice. These “what-if” questions open up thinking about the problem and the goals of the decision. They can also bring creative answers that you might not have otherwise thought of.
Contemplating difference scenarios is another step to good decision making. Using data to understand the financial impact of the different scenarios will set you up to make well-informed decisions. Financial tools can model different “what-if” scenarios to show different potentials. This can help clarify the financial outcomes of different scenarios to focus leaders on the right path forward.
Good decision making requires combining experience, knowledge of the business, and a desire to reach an organizational goal. Better decision making combines those traits with the appropriate business data. As the hub of a company’s data and with the right tools, the office of finance can be a key partner in leading companies to improved outcomes than those driven by intuition alone.
Small to mid-market organizations rely on Centage Corporation’s Maestro Suite, which includes Budget Maestro™ to help them keep track of and manage their cash flow. Budget Maestro improves the efficiency and effectiveness of business budgeting and planning, financial forecasting, financial consolidation and reporting processes. For more information, take a tour of Budget Maestro, contact Centage, or call 800-366-5111 now.