Making good decisions is an essential skill in business, and in life.

Henry Ford attributed his success in building The Ford Motor Company to his ability to make good decisions swiftly.

Andrew Hatcher, a lecturer at The Judge Business School in Cambridge, has researched and studied the decision making process and shared the basics of how we can learn to make better decision and, crucially, how not get paralysed by procrastination.

These are the main points that Andrew covered:

We make about 170 medium sized decisions every day.

Every decision is a battle between rational factors and emotions.

Sub consciously we may give one factor more weight than the other because of pre-set biases.

What is the benefit of the decision?

Building a plane in 48 hours – logic says it won’t be safe, won’t be of much use but the benefit is the emotional impact of proving that the workforce can be productive and to raise morale.

The value of forecasting the result of the decision is not necessarily in the accuracy of whether it is a good decision but of whether the decision is publicly acceptable.

There’s no point in looking backwards on your previous decisions.

You can’t evaluate a decision based on information you didn’t have at the time you made it.

Worrying about an outcome you can’t predict can put you into paralysis. There is always an element of luck.

Planning for decision making:

You can’t make the decision until you’ve done some research

Small impact / big impact

Short term / long term

Your money / someone else’s money



Only do as much research as you need to come up with a decision (In dating make a decision from the first 37 people. No point in going on to research 100)

Pros and Cons

The easiest and therefore often discounted way to make a decision, make a list of Pros and Cons.

This should only take about 3 minutes. Get somebody else to review it for bias.

Cost benefit analysis

How much will it cost to implement the decision, what is the value of the benefits?

Tangible costs / Intangible benefits. Whenever you see an intangible benefit try and evaluate it. Better to put a value on it than ignore it.

Ford Pinto – used to catch fire. Cost $11 to upgrade each car = $137 million. Nominal costs of deaths to society $45million.

Ford used this information to decide not to upgrade the cars.

The result was $125 million in punitive damages, reputation damage etc. Rational decision was not the right one.

What is the cost of doing the calculation?

Don’t spend days and weeks on the calculation if the impact of the decision doesn’t warrant it. Keep it in proportion.

When do you decide to give up?

Would you leave a movie half way through if you didn’t like it, or stick it out?

Would you finish a bottle of expensive wine even though you don’t like it, or throw it away?

If you had to decide to give up one project out of three,  how much would you consider the time and money you’d already invested?

This can sometimes be skewed by the amount of time or money already invested instead of looking at the consequences of investing more.

Try and forget about what has already happened (the investment of time and money) and look at the benefits you will get (or not) by continuing.

Make sure you are doing the highest value work.

Work out the opportunity cost.

“By doing bookkeeping I’m losing the opportunity to do something else that is (potentially) of higher value.”

The fewer choices we have, generally, the more committed we are to the decision that we make.

Emotional decisions tend to be fast, based on experience, self evident and highly context specific.

Rational decisions tend to be slow, logical, not context specific.

If you are struggling with making a decision, stop and do something else, preferably sleep on it. When you come back to it, the subconscious mind will help to balance things up and make it easier.

Re-evaluate decisions you make on a regular basis, e.g going to the same business exhibition every year.

Share your thoughts on Andrews talk, or your experiences and questions on decision making in the comments below.