Does that seem like a contradiction to you? Not to me. Read on to find out why.
It’s good to listen to your gut, isn’t it? Or is it?
It depends. I like to use a simple rule of thumb, both personally and professionally: the more expensive the decision or its consequences, the more rational it should be. I don’t go through a complicated decision-making process when buying a wall calendar, but I certainly do when purchasing software that will place a significant strain on my budget and affect the way many employees work.
Completely disregarding gut instinct does not solve the problem. Our intuition is a wonderful tool provided by nature that helps us navigate complex situations quickly. So how do I reach a decision? By taking a holistic view of objective data, figures and facts, combined with subjective impressions, which together form the basis for decision-making.
It’s often difficult to come up with such criteria in the first place. There’s a little trick that helps me: I imagine having to explain this decision to my successor, who isn’t yet familiar with the business or the situation.
And this is how I go about it. Whether it involves purchasing software, restructuring an organisational unit or developing a new product. As we’ve all done this at least once in our personal lives, I’ll outline the process using the example of the software selection process.
First of all, I’ll look for hard facts. The new system, including maintenance and support, will cost X€ per year. I expect the introduction of this system to increase the level of automation by 10%, which will save me Y€ annually. To achieve this, I need to have a clear understanding of my own process costs and monitor them closely. However, that’s a topic for a separate article.
In addition, there are one-off costs for implementation and training.
Once I have a clear picture of the costs, it’s time to consider the qualitative aspects, because at the end of the day, what we’re looking for is the best value for money, not simply the cheapest product on the market. These aspects include the extent to which my requirements are met, as well as entirely subjective criteria such as the supplier’s reputation, overall impression, capacity for innovation, and so on. The assessment of qualitative characteristics is always subjective and comes down to gut feeling.
How do I streamline this? The answer is obvious. Just as in figure skating, I let several judges – in my case, affected and involved staff members – give their subjective opinions and calculate an average. This way, a single assessment emerges from many gut decisions. A much more objective one.
We’re now almost at the end: a score is calculated from the criteria assessments, which reflects the overall ranking and thus determines the order of our alternatives.
To further strengthen the soundness of the decision, I would like to note how important I consider one criterion to be in comparison with others; for example, the provider’s reputation versus its capacity for innovation. How serious is it if a technical requirement is not met?
So I assign a weighting to each criterion based on its priority and calculate a weighted average that reflects both hard facts AND the gut feelings of several people, thereby enabling a rational and transparent decision to be made.