The Elements of Decision-Making

The last and perhaps the most impactful aspect of an effective executive is making effective decisions.

Effective executives know that effective decision-making should lead to rational actions, but how do you do that?

Can decision-making be molded into a system, doing the right steps in the right sequence, which leads to taking the right action?

While there is no one perfect system that everyone should follow, Peter Drucker did suggest the following five decision-making elements in his book.

  1. Determine whether the problem was a generic situation or an exception that requires special handling.
  2. Determine the clear specifications as to what the decision must accomplish. Drucker called them the “boundary conditions.”
  3. The thinking through of what is “right” and what is “acceptable.”
  4. Building actions into the decision.
  5. Building the “feedback” into the decision for testing the validity and effectiveness of the decision.

Ultimately, Drucker felt that effective decision-making requires both procedure and analysis, but its essence is an ethics of action.

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