If what gets measured gets managed, and what gets managed gets better, then it’s no wonder the decision-making process in most companies is slow, frustrating and stuck in the past.
The fact is you have to measure decision making to make it better.
Leadership and management are largely about judgment and decisiveness, so it’s no surprise a Bain & Co study found that decision making drives 95% of business performance.
The real surprise is that decision making is one of the most poorly tracked business activities. Think about it: your company’s most important business process is also the most poorly measured. This is truly remarkable in today’s data-driven world.
If what gets measured gets managed, and what gets managed gets better, then it’s no wonder the decision-making process in most companies is slow, frustrating and stuck in the past. And since decision making is much of what managers and executives do, it’s no wonder our calendars are crammed with ineffective meetings and our inboxes are flooded with burning email threads.
The fact is you have to measure decision making to make it better. Without metrics, you won’t get your decision-driven work done better and faster this year. Instead of showing good business judgment and high-performance decisiveness, you’ll spend another year cramming in more meetings and firing off more emails.
Six Simple Decision-Making Metrics
How do you measure decision making, especially if you’re starting from scratch like most companies? Keep it simple with these six metrics:
1. How many people participated in each decision?
Count everyone who attended a meeting or was part of a significant email/chat discussion related to the decision. Research shows that decision making works best with 5 to 6 people, so you can create a quick dashboard:
| Number Of Participants | Dashboard | What To Do |
| 1 to 2 | YELLOW | Involve more people who are affected by the decision. |
| 3 to 7 | GREEN | Way to go, team! |
| 8 to 12 | YELLOW | Find a better way. |
| 13 or more | RED | Seek professional help. |
2. How many alternatives were considered?
Only count alternatives that were written down somewhere – in an email, a presentation, meeting notes, a whiteboard. Research shows that doubling the number of alternatives reduces failure by 50% increases the chances of a good decision by 6 times, so you can create another little dashboard:
| Number Of Alternatives | Dashboard | What To Do |
| 1 | RED | Seriously? Hey, don’t feel bad! This happens for about 40% of business decisions. |
| 2 or 3 | YELLOW | Almost there. |
| 4 or more | GREEN | Bingo! |
3. How aligned were decisions with business goals?
Decisions are how goals get done. So start by writing down your top business goals. Then for each decision, count the number of goals that will be positively affected. Framing decisions too narrowly is one of the worst decision biases, so use goals to take a broader view. Here is a simple dashboard, based on data from the Cloverpop business decision database:
| Number Of Goals | Dashboard | What To Do |
| 0 to 1 | RED | Think more broadly about the goals of your team. |
| 2 to 4 | YELLOW | Think more broadly about the affects of the decision. |
| 5 or more | GREEN | Like a boss! |
4. How well were decisions communicated?
Decisions never happen in a vacuum. If communication doesn’t fill the vacuum, then rumors will. Score each decision with one point for each of the following:
- It was communicated in writing
- It was communicated to everyone affected
- It included the reasons why
- It included the goals affected
- It included the names of the people involved
| Communication Points | Dashboard | What To Do |
| 0 to 1 | RED | Unless you're a jedi, you're in a tough spot. |
| 2 to 3 | YELLOW | Do. Or do not. There is no try. |
| 4 to 5 | GREEN | The Force is with you! |
5. How much are people bought into decisions?
Decision making happens in teams, and decision execution does, too. Buy-in is critical for execution. To track this, either do a simple poll immediately after each decision, or do your own rating of how well people buy into the decision, on a scale from 0 to 10:
| Buy-In Rating | Dashboard | What To Do |
| 0 to 4 | RED | You may think you made a decision, but it ain’t happening. Try again. |
| 5 to 6 | YELLOW | Keep your ears open and prepare to adjust. |
| 7 to 10 | GREEN | Full steam ahead! |
6. How did decisions turn out?
Here’s the key step – checking the results of your decisions. To track this, look back at decisions after about six to eight weeks, and rate whether they missed, met or exceeded expectations. This is also a great time to write down what you learned, reinforce the decision if it’s going well or change direction if needed. Once you track ten or so decisions, you can start another dashboard:
| Results Meet/Exceed Expectations | Dashboard | What To Do |
| 0 to 49% | RED | Uh oh. Most do better than this... |
| 50 to 69% | YELLOW | Not perfect. Not bad. Figure out why. |
| 70% or higher | GREEN | Gold star! |
What Happens If You Track These Decision-Making Metrics
Managers make 40 to 50 significant business decisions each year,so you have plenty of chances to measure your decision making, learn, and make it better. Our research shows that best practices improve overall manager performance by 20%.
We’ve kept careful track of these and other more advanced decision making metrics at our company for the past year. Here are the metrics from our last 10 decisions:
| Decision-Making Metric | Dashboard | Average Score |
| Participants | GREEN | 6 people involved |
| Alternatives | GREEN | 6 alternatives considered |
| Goals | GREEN | 9 goals affected |
| Communication | GREEN | 5 points - perfect score! |
| Buy-In | GREEN | 10 out of 10 (ok, really 9.8) |
| Results | GREEN | 83% meet/exceed expectations |
That clear green dashboard does more than drive better decisions. It also drives a big benefit in terms of fewer meetings and emails, as well as better alignment and teamwork.
You might not start out all green, but you can get there. We did.
So start measuring your decision making, and work better!
Erik Larson is CEO and founder of Cloverpop. He explores how the decision revolution is changing business leadership.
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