American Banking Executive and Author, Herbert Prochnow, used to say that economists wouldn’t have to make decisions if better business decisions were made from the start.
Ultimately, what he meant was that every business owner has the ability to create the market they need and want, assuming they can take the best informed and the most relevant decisions for their growth. Otherwise, it is the role of the economist to dissect the financial data and overrule traditional decision makers to maintain the company.
The main problem with Prochnow’s view is that, unfortunately, not all companies can rely on a qualified economist for their survival. If you run a small business and take one wrong decision, you can be sure that nobody will help you repair the damages. That’s precisely why it’s indispensable for small entrepreneurs to understand how to make the best possible decision for their businesses.
Don’t lie to yourself or others
The worst decisions are made when entrepreneurs refuse to see the reality for what it is. Unfortunately, if you want to grow and sustain your business, being stubborn by lying to yourself is the very last thing you want to do. There’s a big difference between ideas that need time to develop and reach the market and ideas that are just not working for you. If you can listen to your collaborators or even accept external help on your projects, then you can avoid costly mistakes. There’s a fine line between self-confidence and lack of realism. That’s precisely why being stubborn and too convinced that you’re right can be extremely damaging to your business. If you want to avoid poor decisions, make sure that you know when to stop believing in a bad idea.
Get the best information you can get
As an entrepreneur, you need to know that you can’t take any decision without a solid knowledge of the situation. In the business world, this is called data collection. Your business needs to rely on integrated marketing tools and an embedded BI solution to monitor, collect and analyze data related to your products, customers, processes, and market. Informed decisions, or data-driven decisions as they are called, are designed to take account of your current opportunities, weaknesses, and behavior so that you can find the most effective growth strategy for your company. Here’s a hint: The closer the information is to your company, the better your decision will be.
Don’t decide on your own
More and more start-ups are beginning to understand that they need to work with their peers to create the market disruption they need to exist. Even within your business, collaborative thinking and analysis need to be a process that is shared with senior managers. Indeed, the idea that two heads are better than one is not new. In a professional environment, it’s through the ability of a team to brainstorm freely and openly that the best ideas happen. In short, your business strategy is the result of the ideas, visions, perceptions, and inspirations of a team, not the work of one individual.
In conclusion, the best way to avoid bad decisions when you don’t have a professional economist to rely on is to be open to external input. From accepting that you might be wrong and that others might have better insights, to using data collecting tools, your business’s growth is a collaborative process.