Michael Manners Associates, a consultancy focusing on performance improvement in the SME market, management development, psychometric assessments, recruitment processes and sales training discusses aspects to consider in respect to making the right decisions to run a successful ATF.
It is a fact of life that we all have to make decisions. However, managers making decisions takes on a whole new dimension because they will be judged by the quality – not the quantity – of their decisions. Hindsight is a marvellous faculty that no one possesses so we have to use foresight in the process of decision making. Judgement is a major factor in decision making. Hard decisions about people, money, materials, resources and time are a constant theme.
Take purely as an example an ATF that offers self-service to its customers so they remove parts because the price is lower rather than buying them off the shelf. This is how the business started and it is deeply ingrained in the very DNA of the organisation. However, a rational investigation has shown that:
- The space occupied could be used more profitably
- Management time in selecting vehicles and movements by forklift drivers would be freed
- It does not contribute sufficient to net profit to make the process viable
- It attracts an undesirable element to the site
- These customers damage other parts when removing their part
- Parts could be removed by your own expert mechanics reducing unnecessary damage
- Turnover and profit per square metre rises through better use of the site
- A better way to service these customers and not lose them is for them to buy parts from stock. You then form a ‘club’ of professionals who pay an annual subscription and receive a substantial discount from the list price paid by the general public – two-tier pricing.
What would your decision be if faced with the above because this is an area where experience and instinct may well mislead? The risk is that a wrong decision will be taken if hard facts are ignored and tradition prevails.
Effective managers make:
- The minimum of decisions
- Decisions at the right time
- Decisions based on the best available information
They strive to overcome preconceived notions and prejudice and dispassionately review evidence from all quarters even though such evidence may conflict with their preferred outcomes.
Ploughing on with a course of action in the face of contradictory facts and tailoring or ignoring such facts to fit their pet project is known by psychologists as ‘confirmation bias’ – a temptation to be resisted.
The qualities managers need to make correct and shrewd decisions include:
- Critical thinking – reasoning
- Creating new ideas
- A willingness to take calculated risks
- Encouraging experimentation and creativity
Managers need buy-in from their teams and so must ensure that they:
- Avoid making impulsive decisions
- Gauge their team’s response through informal discussions before going firm on a decision
- Do not ignore their instincts but use hard data to test them
- Freely discuss with a more experienced manager whilst retaining responsibility for the final decision once taken
- Resist the temptation to make premature or unnecessary decisions
- Allow decision making at the lowest viable level to encourage members of their team to take responsibility. This will stimulate their development and free the managers’ time to concentrate on strategic issues
- Do not delegate key issues of a strategic nature that are the proper domain of the head of department. Passing the buck is not the way to engender respect.
- Retain responsibility for recruitment, induction, pay structures, promotion and discipline
- Ensure that their department is properly structured to achieve its objectives
- Make certain that the organisation has the resources to implement decisions including cash, trained personnel, time and the will to do so – it must be within their capability
There are no firm rules to decision making so a flexible and changing approach is highly recommended. This will include a blend of experience and instinct, training and insight, independence of thought and team expertise, hard data and blue sky thinking. Furthermore, there will be times when managers are forced to choose between two options neither of which is satisfactory. This is just too bad and they have to make the decision and move on but keep the impact of the decision under constant review. Do not be put off by the media constantly braying about ‘U’ turns. It is essential to alter course the minute there is a fact that was not available a minute earlier that impacts on a decision already taken. Just make it clear that new and contradictory facts have now come to light. Stubbornness and a blind adherence to an outdated decision can only lead to grief.
Peter Drucker, the renowned American business guru put together a sequence to decision making as follows:
Classify the problem: if it is generic, it is probably one of those everyday problems that have to be solved by adapting the appropriate generic rule, policy or principle. If it is extraordinary, the problem must be dealt with on its individual merits.
Define the problem: state precisely the nature of the problem and check your definition against all the observable facts. Beware the plausible but incomplete definition that does not embrace all the known facts.
Specify the conditions: clarify exactly what the decisions must accomplish. These are the so-called boundary conditions or specifications that must be satisfied by the solution to the problem.
Decide the right action: decide first of all what is right to do rather than what is acceptable in the circumstances. Make the ideal decision which satisfies all the specifications.
Compromise the decision: in reality, there always has to be a compromise, so make the best decision possible by adapting it to the circumstances.
Implement the decision: assign the responsibility of carrying out the decision to those people capable of doing so. Make sure everyone who needs to know about the decision is informed.
Review the effectiveness of the decision: build feedback and monitoring into the implementation process. Receive reports on how the results of decisions measure up to their expectations. Incorporate any positive facts into the classifying, defining and specifying the process of making decisions.
Decision making is a balancing act that requires the exercise of judgement
- Put personal prejudice and bias behind you – be open-minded
- Seek hard facts from as many sources as possible
- Analyse and evaluate those facts
- Use your reasoning skills
- Discuss with a more experienced manager
- Discuss with your team before implementation
- Aim for quality decisions, not quantity
- Take account of your instincts but use hard data to test them
- Change your mind if new data arises that contradict a decision already made
- Ensure that the organisation has the resources needed to implement the decision
- Take full responsibility for the decisions you have taken
To contact Michael for further advice, please email him at email@example.com or call him on 07710-056-354.