Decisions are part of our daily life. Farmers are continuously confronted by matters that need a decision to be taken. Decision-making refers to making choices between alternative courses of action, which may even include inaction.
From a business point of view decision-making is one of the management tasks which enforces the management functions of planning, organising, implementing and control. Everyone wants to make a sustainable profit and our actions have an influence on the success of our business. Therefore, all decisions will ultimately have an influence on the profit of our business.
STEP BY STEP
Using a step-by-step approach can assist you with your decision-making process. This approach can be applied to the simplest or most comprehensive decisions. It increases the chances that you will make the most constructive decision.
Identify the problem/challenge/opportunity and formulate or describe it properly. A problem clearly stated, is a problem half solved. Get all the facts related to the issue to be resolved correctly. It is important to distinguish between ‘small’ and ‘big’ problems. Many times, too much time and energy is spent on trying to solve minor problems that do not really have a great influence on the goals of the farming business.
Gather information. Collect as much relevant data, information, opinions and observations as possible to be able to resolve the problem. The more information you have, the better you are equipped to make the right decision.
Develop alternative solutions. Use the relevant information to develop various alternative solutions to the problem. Be open-minded and do not limit yourself to certain standard practices. Give free reign to your imagination even if it seems as though an idea is impractical, or even unacceptable to you. Do not discard an idea without thorough investigation. Many managers have come up with brilliant solutions to problems because they have not been stopped by what seemed impossible at the time. Another important point is to discuss alternative actions with other people to obtain their opinions. A practical tip: Always attempt to develop at least three alternative solutions.
Weigh the alternatives. Consider the pros and cons of every alternative carefully – and always keep your budget in mind.
Make the decision. This is a deliberate choice between the alternatives. In most cases this is the most difficult step in the decision-making process because the choice of the best action to be taken is not always easily seen. Furthermore, most decisions have an impact on the future, thereby implying that it carries risks.
Implement or act on the decision. The choice of the best alternative will not have the desired result if the choice is not implemented by mobilizing the required human and other physical resources. You have used time and energy to decide, why not do it?
Evaluate the implementation. Was it successful? Could it have been done differently? The implementation must be analysed both during its implementation phase and after the action has been completed. Managers often pay insufficient attention to this important final step. Do it and evaluate the implementation of your decision – the only way to gain experience. Evaluate your action to know whether you have made a good decision or a bad one. If this is not done, valuable opportunities are lost to make timely adjustments or to learn from the success and errors of the past.
Decision-making is influenced by your experience, your skills, your qualification/training, your attitude towards risks, your finances and your budget, time to address a problem, available resources, and availability and reliability of data. These factors can and will force you to use your imagination to come up with a decision.
These steps are applicable to any decision-making regardless of the scope or magnitude of the problem/challenge and even the urgency there-of. Be assured that each and every decision you make, regardless of its size will have an influence on your business, especially on your finances. Remember: A successful business requires good decisions to be taken as many times as possible.