How to Make SMARTER Decisions

Even with the best business ideas, the success or failure of your company will depend on the decisions that you make. It is important to have a system and process in place to help you make SMARTER decisions.

As your business grows it becomes increasingly difficult to make good decisions without real-time data and analytics. Research shows that we are our own worst enemies when it comes to decision-making. Here four steps to help you make SMARTER decisions.


1. SMART Mentality

We are often our biggest enemy and obstacle to making good decisions. We have cognitive biases that impact our judgment and the decisions we make. Our brains developed these biases as mental shortcuts. They help to better process and interpret what is going on in the world. Cognitive biases, however, lead to judgment and decision-making that deviate from rational objectivity.

These biases, although helpful in simplifying information, become systematic patterns that often lead to irrationality. It is impossible to get rid of these biases, but being aware of them is important. You need a system in place that helps prevent these biases from impacting your decisions.

For example, one of the most common biases is confirmation bias, which is the tendency to search for or interpret information to justify your existing beliefs. Our brains love proof of how smart we are. To help prevent you from confirmation bias, actively seek opinions that contradict your own. Seek the smartest person who disagrees with you. Then try to find out the full reasoning behind the contrary opinion.

Another common cognitive bias is embodied cognition. This is a tendency to have selectivity in your perception, attention, and decision-making based on the biological state of the body. Our body is connected to our thought processes.

To prevent this, before making any decision, be aware of your biological state. Don’t make decisions if you are tired, hungry, or under the influence. It will impact your judgment. Eat properly, reduce your alcohol intake, and get enough rest before making important decisions.


2. SMART Data

Data is a key component for making SMART decisions. Reliable data will help you gain an in-depth view of your company’s operation, understanding your client demographics, and help improve your processes. Ultimately the right data is the base to make smarter decisions.

Technology has leveraged the playing field between large and small companies. You don’t need a lot of resources to get the same data a large company has. There are software programs, outsourced companies, and online tools to help you collect and analyze the data you need. See more to see how this can benefit your company.

SMART data can help you analyze and decide the best marketing channels to reach your customers. You can also use analytics to select client segments, determine client purchasing criteria, client preferences, etc. The data can help you see which marketing campaigns are producing better results than others. You can then decide which efforts to expand, terminate or modify.

Data is also important to accurately measure your company’s performance. By tracking and analyzing the data associated with a particular plan or course of action, you can better understand what went well, where breakdowns occurred, and what steps are needed to get back on track.

Because resources are limited, you want to focus on eliminating any waste. Research shows that inefficiencies can cost your company anywhere from 20-30% of your revenue every year! Data can help you eliminate these inefficiencies, increasing your profit margins by making some changes.

Don’t forget to get data from your employees and clients. Consult them before making any decisions, they can offer valuable insights. They possess a view of your business that you don’t; while you’ll see things one way, they’ll see things another way. It could be that the decision you’re about to make will lead to problems that you have not foreseen. You won’t know about these issues until you communicate with your staff, though.


3. Feedback Loops – Refine and Repeat

How do you know if the decision is the right one? Build-in feedback loops so you get immediate feedback. This way you can make adjustments as needed. The last thing you want to do is make an expensive decision and wait until it is too late before realizing it was a mistake.

Try to create shorter feedback loops, loops that take less time between the moment you implement a decision and the moment you learn the results. This will allow you to fix or make improvements more quickly. For example, if you are running in the wrong direction, you want a feedback loop at the 100-meter mark, not the 1-mile mark.

The reason it’s called a “decision-making process” is because it is a process of learning and growing. The feedback will help you incorporate the experience and information into future goals and decisions, honing the process as you go. This will help you make and continue to make smarter decisions

Examples of feedback loops are:


The Deming Cycle / The Shewhart Cycle / also known as PDCA

  • Plan – Do – Check/Study – Act

PDCA / PDSA is an iterative, four-stage approach for continually improving processes, products or services, and for resolving problems. It involves systematically testing possible solutions, assessing the results, and implementing the ones that are shown to work.

The four phases are:

  • Plan: identify and analyze the problem or opportunity, develop hypotheses about what the issues may be, and decide which one to test.
  • Do: test the potential solution, ideally on a small scale, and measure the results.
  • Check/Study: study the result, measure effectiveness, and decide whether the hypothesis is supported or not.
  • Act: if the solution was successful, implement it.

Six Sigma DMAIC

Image result for six sigma feedback loop dmaic
  • Define – Measure – Analyze – Improve – Control

DMAIC is a data-driven quality strategy used to improve processes. It is an integral part of a Six Sigma initiative but can be implemented as a standalone quality improvement procedure or as part of other process improvement initiatives such as lean.

  1. Define the problem, improvement activity, opportunity for improvement, the project goals, and customer (internal and external) requirements.
  2. Measure process performance.
  3. Analyze the process to determine the root causes of variation and poor performance (defects).
  4. Improve process performance by addressing and eliminating the root causes.
  5. Control the improved process and future process performance.

The Lean Startup

  • Build – Measure – Learn

In the Lean Startup methodology, startups test an idea with the potential users and quickly using it to come up with a product. They then obtain feedback on the product from users and adjust the product accordingly, depending on the response or feedback obtained.

This method is best embodied in the cycle known as “Build Measure Learn”.

  • Build or develop its MVP – “minimum viable product” that can be built for the purpose of testing a number of assumptions, or the hypothesis formulated – as quickly as possible.
  • Measure – the startup must then determine whether real progress is being made or not, and this involves measuring the results obtained from the experiment performed during the BUILD phase.
  • Learn – This is where the startup will make a decision based on the measurements accumulated: should it “persevere”, or should it “pivot”? Persevere, in this context, means carrying on with the same goals, while pivot entails changing or shifting some, or all, of the aspects of the product strategy.

4. Create Contingency Plans

Helmuth von Moltke, a Prussian field marshall recognized that “No plan survives contact with the enemy.” Moltke’s main thesis was that military strategy was basically a system of options since it was only possible to plan the beginning of a military operation. The main task of military leaders was to prepare for all possible outcomes.

There is a high probability that your decision will fail or miss the target. If that’s the case, you want to have back-up plans ready to be implemented. When developing courses of action, you want to prepare for any outcome. You can never account for all of the problems and obstacles you will face.

The purpose of creating contingency plans is to minimize disruptions and implement an alternative for action if expected results fail to materialize. You want to evolve beyond deterministic plans in favor of resilient strategies that you can adapt to real situations as they occur.

By creating an adaptive organization, you accomplish your purpose through self-learning and iterative processes. The result is a decision that is best suited to the unique situation you are in. It is important to communicate your overall goals so everyone is on the same page. This coherence will give you flexibility in achieving the right decisions.


When going through the decision-making process take into account these four SMART tips to help you make the right decision. Trusting your gut is not enough to make SMARTER decisions. It requires recognizing your biases, collecting the right data, implementing feedback loops, and make sure you have contingency plans in place.

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