Making the right businesses decisions can be the difference between profit and loss, and good business decisions are more than just intuition and assumption.
As a company director or a business leader, you make many decisions every working day. Most decisions are made in-the-moment with information available to you at that given time, or you may choose to rely on intuition or business acumen when making these decisions.
But when it comes to complex decisions which potentially have a major effect on your company’s ability to operate and generate revenue, you may take longer than a quick snap to decide. This is because you know that any wrong move could result in losses or something more sinister.
At Blackhawk Intelligence, our corporate intelligence experts like to quote from a client who says that “Successful business leaders owe their success to having the right information to make a judgement.” Do you agree with the statement? Do you think you are well-informed before you make a business decision? In this article, let us discuss the effects of good and bad business decisions and what you can do to make better business decisions.
The impact of business decision-making
Rightly or wrongly, companies of all sizes expect their directors and business leaders to be excellent decision-makers. In reality, business leaders are humans who may have acted impulsively, or who may have missed essential steps that would ensure better decision-making. It is also common for some leaders to get stuck in uncertainties associated with decision-making or fail to recognise alternatives.
Additionally, poor business intelligence – provided from either internal or external sources – can completely hamper the decision-making process. If decisions are based on skewed or erroneous information, it is likely to spell disaster for a business. And even if your business does survive poor decision-making, reputational damage (as well as the perception of weak leadership) can lead to key figures being ousted and the company having to make even more fractured decisions that could have dire consequences. In short, business-critical decision making requires business leaders to examine all facts and consider alternatives before deciding on the best route to take.
The road to better decision-making
If you were to ask a group of businesspeople ‘How to make better decisions?’, you are likely to hear conflicting information – some claim that relying on gut instinct is not a bad way, while others would argue that one needs to take a structured and analytical approach to make decisions. Generally speaking, a structured decision-making process involves these seven steps:
- Identify the issue and decision criteria
- Gather information
- Consider and rate the alternatives
- Weigh the evidence
- Test the decision
- Take action
- Review your decision
In our line of work, we have also come across business leaders who believe that making decisions is easy – just get a simple yes or no answer – as some would say. For example, you may ask yourself, “Will this investment help the business to be more profitable?” If the answer is yes, you will just do it. But things are seldom that clear cut in a corporate environment. In the event that you do not know how and when to make it happen and what the risks involved are, having a simple ‘yes’ will not get you very far.
One way to approach good decision-making, we argue, is not just based on human ability but based on context and intelligence. Without context and a set of relevant data, the decision-maker is less likely to make an assured decision. Combining context and information – gathered either internally or externally – is key to achieving better decision-making, and here are some ways by which this information can be obtained:
Due diligence is an investigative process that is vital in determining whether or not the claims of another party – often someone who is going to sign a contract with you, form a partnership, or invest in your company – are identifiable and verifiable. Performing due diligence in such situations is essential and allows companies to identify hidden business risks and discrepancies before it is too late.
Due diligence can take a number of forms, including financial due diligence, legal due diligence, HR due diligence, intellectual due diligence, among others. Follow the link to the article “Due diligence isn’t just an option, it’s essential” to read more if you like. Increasingly, we also see companies wanting to fulfil their environmental responsibility by using the process of due diligence to ensure ethical practices are taking place. You can read more about “Environment ethics due diligence” by following the link.
What due diligence aims to do is to give you insights which will help you to make sound business decisions.
Risk is an inherent part of making business decisions, therefore being able to identify and mitigate risks is an important part of good decision-making.
A standard risk analysis involves five steps: identifying risks, establishing the likelihood and consequences, evaluating the impact, ranking and treating the risks, and finally tracking the risks. Once risks have been identified, you can then decide whether these risks should be avoided, mitigated, transferred or accepted. If you would like to know more about risk management, follow the link to the article “What do you need to know about business risks?”
Business leaders are often surrounded by a team of colleagues in the process of decision-making. These people may help you to uncover facts, support you, or play devil’s advocate to challenge you in good faith. But they may also harbour a grudge or have the intention to achieve personal gain by defrauding you and the company.
To make sure that you are surrounded by genuine people, consider using the background check service by Blackhawk Intelligence where our team helps you to screen candidates for a range of background details not easily accessible, including bankruptcy and insolvency, court judgements, criminal records, employment check, education check, qualification check and regulatory or profession verification. You can read more about employment background check by following the link to the articles “Employment background check – sensible pre-employment due diligence” and “Why are corporate background checks important?”.
Background checks can also be extended to include external parties like your partners and customers, both domestically and internationally. These business background checks are particularly useful when you are dealing with individuals who seem too good to be true.
Needless to say, all of the information gained from background checks can be crucial in paving the way to a business decision.
How Blackhawk helps businesses make better decisions
Good decision-making is essential in business. With companies performing many different functions and interactions with other businesses – such as suppliers, distributors and sales – it is vital that any decisions relating to these matters are made with an accurate understanding of the situation at hand.
As the foundations of good decision-making are based on having the right information and situational context, corporate intelligence specialists such as the team at Blackhawk Intelligence can supply businesses with the right information to make such decisions.
At Blackhawk, we focus on arming our clients with all of the relevant information to maximise the possibility of reaching successful outcomes in any business decision. Our services include:
- Due diligence (pre-transactional and post-transactional)
- Risk management
- Pre-employment screenings
- Business background checks
With a truly global reach, thanks to the availability of trusted teams all around the world, Blackhawk helps businesses across the globe with national and overseas intelligence. Our goal is to ensure that our clients feel confident in their business decisions.
For more information on the services that we provide our clients, you can reach Blackhawk’s London office on +44 (0)20 8108 9317 or contact us via our online form.
This post is intended to provide information of general interest about current business issues. It should not replace professional advice tailored to your specific circumstances.