How You Can Stop Making those Bad Decisions


The job of a leader is to make good decisions, particularly when the economy is soft, as it is at the moment. In the franchise relationship the franchisor is the leader. While this tip is especially dedicated to senior franchisor executives, anyone facing an important decision will find it useful.

Not all decisions are equal. An important decision has three characteristics:

  • It cannot be easily reversed.
  • It will relate to boosting prosperity or keeping the business safe.
  • It is likely to significantly impact on others.

Important decisions are usually also complex which is why the following process is so useful. These steps are backed by good psychological research. Practice them and you'll immediately be a better franchisor.

Steven Strategies and One Tip

  1. Don't assume a good decision will be good for everyone. Sometimes the best decision is the "least bad" decision because the options aren't great.
  2. Gather all the facts. We all have a tendency to filter out information we don't find interesting, so be careful not to be selective in what you pay attention to. Keep asking "have we got all the facts?"
  3. Get input from relevant people. These will be people who have a significant stake in the outcome or who have relevant expertise. If you form a task force of smart people, ensure some are also emotionally intelligent.
  4. Minimise the impact of egos. Wise people change their minds in the face of new information. They appreciate that what is right is more important than who is right. For instance, one of our clients regularly reminds his team to hold strong positions loosely.
  5. Identify all options. Put everything on the table, even options that are disturbing. Remember you don't need to act on these. But in naming them you open the door to honest, frank discussion.
  6. Draw up criteria. Assess the options against these to see which get more ticks. For instance: What is the impact on franchisor profitability? What is the impact on franchisee profitability? Is it consistent with our brand and culture? How easy would it be to implement?
  7. Pressure test preferred options. Play the devil's advocate. Actively look for gaps, weaknesses and risks. Explore how readily these can be fixed or minimised.

These habits will greatly improve the quality of your decisions and your ability to intuitively identify more subtle threats and opportunities.

A final tip. Someone once said to me, "Never make a decision when you're too - too mad, too sad, too glad, too anything!" I think this is great advice because a common source of poor decision making is impatience. Just like a good wine, important decisions are sometime best allowed to sit for a time.

Until next time ...

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This sounds like a pretty good list to keep handy, wonder what Webster - the mad rational choice theorist- thinks of this list.

Michael, I would be more interested in what Webster the mad rational attorney thinks :) The truth about decisions is, in most cases, they are more influenced by emotional rather than rational factors. Cognitive neuroscience has shown this repeatedly - especially under conditions of stress.
However the more aware people are of their emotions, the more they can reduce the impact of emotions such as fear, desire or anger, on their thinking, and more readily engage the rational frontal cortex when making important decisions.


Yes, the same faculties which produce reason can also produce rationalization.

We are likely hard wired for cognitive dissonance.

But, I don't see any particular emotion which accompanies cognitive dissonance.

Nothing to be made more aware of, at the emotional level.

On a different note, Greg, have you read Cheryl Bachelder's book: Dare to Serve?

I haven't read this yet. But I am delighted that Cheryl will be serving on a panel I am moderating at the next IFA convention on the topic of "Maintaining a healthy franchising culture during periods of growth and change". This will be part of a dedicated Franchise Relations Summit where around 300 franchisor executives and franchisees will be exploring the topic together in a panel and round tables.

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