The difference between strategy and serendipity is small when you are prepared, explains Mark Faust, president of Echelon Management.
How can you be ready, willing and able to lead your farm into the future? Start by developing a specific decision-making process.
“Have you put off decisions that could be of great benefit to your company? Do you sometimes feel as though you agonize over decisions?” Faust asks. “Here are a few tools that have helped many leaders with whom we work deftly make more effective decisions.”
BETTER WITH PRACTICE
Most leaders aren’t using any objective criteria or tools to evaluate the options available, Faust says.
“Instead, far too many business owners spin their wheels and then make decisions based on intuition, when a much more helpful and objective approach could be applied,” he explains.
Don’t become overwhelmed by all the decisions you must make for your business, advises Jay Parsons, University of Nebraska agricultural economist. As you analyze a decision, articulate your objective, rely on good information and focus on the big picture.
“Understanding decisions that need to be made today and decisions that can be made later and linkages between the two reveals much about the decision context,” he says. “Permission to focus on objectives rather than analyzing alternatives frees up creative thought and generates possible solutions that result in more flexibility and an increase in ability to deal with the future uncertainties being revealed as outcomes.”
Of course, you have valuable instincts based on years of experience and data. Yet, Faust says, you could improve your decision-making success by using more tools to evaluate your options.
“Frequently, there is an objectifying tool we can pull out and use to help make the decision more rational and meas-ured and thus give confidence to CEOs that they are doing the best they can in making that decision,” he explains. “Also, bringing in an objective outsider, someone who is not burdened with the concerns surrounding the decision, can offer a unique wisdom that can accelerate success.”
If the decision is between alternatives, your first step is to ask the following questions. Mark Faust suggests:
MUSTS: What are the “musts,” or non-negotiables, we cannot sacrifice? These are mandatory, measurable and realistic. This will sometimes sift out options that are not appropriate.
WANTS: What are the “wants” we would like to gain? See which of the previous “must” options will likely meet the most of your wants. List the specific wants behind each relevant option.
RISKS: What are the potential risks we need to consider? At this point, many decisions should become more clear if not obvious. Look for the most rational decision, which equates to the maximum benefit within acceptable risk parameters.
GAINS: What are the potential gains that could be realized? List the benefits behind options and consider if an option delivers a solid return with a reasonable likelihood of success.
For larger and risker decisions, business coach Mark Faust says you might need to increase your analysis and thought process. He suggests putting your decision factors from above into a spreadsheet. For each option, you will want to weigh the negative potential of the risk or positive potential of the reward.
For example, he says, you could rank a reward from 1 to 5, with these parameters:
1 = Some minor enhancement that only you would know about.
2 = A nice improvement that people around you could benefit from and see.
3 = A benefit that is companywide and people are talking about on a regular basis.
4 = Customers flocking to your company.
5 = A game changer for the company, industry, or more.
After rating the reward potential, do the same with the risks, considering the following ratings:
-1 = A minor annoyance
-2 = A problem you could solve
-3 = A problem for which you would have to get help and it would be made public in the company.
-4 = A huge embarrassment
-5 = A problem so bad that it could harm your company.
To make changes, Faust says, the rewards must be a 2 or more. Otherwise, you might as well consider other potentials. If the risks are -4 or -5, then you may want to eliminate that option.
