How to make decisions

Every day, business leaders make dozens of decisions. While some obstacles are easy to overcome, others are more challenging. Some decisions go unnoticed, slipping through the cracks of our busy schedules, while others occupy our minds, lingering long after the workday is done. At times, a particularly tough choice might even steal your sleep, robbing you of peace of mind.

In extreme cases, even when a decision seems “solved,” your mind might still churn, replaying the scenario over and over again, questioning what you could have done differently. Perhaps you’ve experienced this when facing a significant financial investment, contemplating the next step in your career, or, as I have, agonizing over how to develop your company. The difficulty lies not only in making a choice but also in the gnawing uncertainty of whether it was the right one.

Last year, I found an approach that gave me back my sleep and became my compass for decision-making. This process, which I use to navigate complex decisions, involves three key steps:

Decision categorization: Determine the importance of the task or decision at hand.
Tool selection: Choose the best approach for each category of decisions.
Goal setting: It’s not enough to make a decision; understanding whether the desired result is achieved is crucial.

Decision Categorization

I often think of our brain like a car engine: making decisions consumes energy, just as an engine consumes fuel. If you spend too much of that fuel on choosing breakfast, deciding on an outfit, or planning your evening, you might find yourself running on empty when it’s time to make a critical decision for your future or your company’s growth strategy. Before diving into any decision, it’s vital to assess its impact.

I divide decisions into three groups to better manage my mental resources:

Routines: These include basic tasks like food choices or meeting times. Automating or minimizing these decisions can save valuable energy.
Tactics: More significant decisions that can be adjusted easily, such as planning a vacation, choosing appliances, or selecting tools to test a hypothesis. These decisions require more thought but are still manageable.
Strategy: High-impact decisions where the results are difficult to assess quickly, such as determining the number of floors in your future house or deciding whether to open a new business line. These require the most mental energy and careful consideration.

Note: Understanding which category a decision falls into makes the decision-making process more straightforward and helps prioritize where to focus your energy.

Tool Selection

Once you’ve categorized a decision, the next step is to select the right tool for the job. In my experience, many leaders search for a universal tool—a “silver bullet” to solve all their problems. But in reality, different decisions require different approaches.

Here are some tools I find useful:

Don’t make a decision at all. When the cost of the decision is low and the options are similar, sometimes it’s best to avoid overthinking. For example, if you can’t decide between two t-shirts, you might just buy both, sparing yourself the mental energy of a meticulous analysis.
Automate the process. For routine decisions, consider setting up a system you can follow consistently. For instance, you might plan your meals for the week, so every Monday you have eggs for breakfast, Tuesday oatmeal, and so on. This way, you conserve energy for more important decisions.
Delegate. Even if you know your company inside and out, making every decision yourself is a quick way to burn out. Trust your team to handle their responsibilities, freeing up your energy for higher-level thinking.
Evaluate the potential of alternatives. Focus on the potential outcomes of each option. While actual results may vary, understanding the potential helps you make informed comparisons.

Let’s combine these tools with the decision categories:

Routines: Use tools that require minimal energy, like automating or skipping unnecessary decisions.
Tactics: Consider delegating these decisions to others.
Strategy: Devote maximum energy here, evaluating potential outcomes and, if needed, delegating specific tasks to specialists.

Determining Goals and Assessing Progress

Once you’ve made a decision, it’s crucial not to waste energy on the “What ifs?” To avoid this, I focus on identifying my goals and setting clear points of control. When planning strategic initiatives for my business, for example, I first pinpoint the areas with the greatest uncertainty and estimate how long it will take to assess them. Knowing the timeline for each stage of the decision helps me avoid unnecessary worry about whether things are on track.

These control points also help monitor progress toward the goal and manage resources effectively. By setting these checkpoints at the moment of making a decision, you can better assess whether you’re moving in the right direction without getting bogged down by doubts.

Conclusion

The challenge of decision-making can be illustrated by an old story about a donkey: The donkey stood between two bales of hay, but starved because it couldn’t decide which one to eat.

As a leader, remember that sometimes it’s better to make a wrong decision and learn from it than to be paralyzed by indecision. In the end, the key to effective decision-making isn’t just about choosing wisely but about conserving your mental energy for what truly matters.

Apply these strategies, and you might find that decisions become less daunting and more empowering.