What BP, Coke and Lindsay Lohan Can Teach You about Decision-Making

Bad decisions are easy to find in the business world, we all remember the disaster called New Coke; however, most of us don’t know that M&M’s opted out of Steven Spielberg’s E.T.

More recently we shook our heads in amazement when we heard BP CEO Tony Hayward decided to take a day off and watch his 52-foot yacht "Bob" compete in a race off England’s coast in the middle of the Gulf Coast oil spill crisis.

And we laughed when we heard of train-wreck Lindsay Lohan’s recent decision to "trick" Judge Revel by saying someone "spilled" alcohol on her SCRAM bracelet which led to her heightened blood alcohol reading at the MTV Movie Awards.

Where have these bad decisions led? New Coke left Coca-Cola drinkers scrambling to find regular Coke and hoarding it, M&M’s decision almost left them outsold by "E.T.’s favorite candy," Reese’s Pieces, Tony Hayward was removed as point person for the BP oil crisis and is handing over daily operations to BP Managing Director, Bob Dudley and poor Lindsay will have to put her acting career on hold while she spends 90 days in jail.

American cartoonist Scott Adams said "Informed decision-making comes from a long tradition of guessing and then blaming others for inadequate results." While it may seem that this is a prevalent method in the corporate world, it doesn’t have to be.

Here are the top five ways to make better decisions:

1. Have all the right information

It’s hard to make a decision, and not just a guess, when you don’t have all the data you need. Make sure the information you need is at your fingertips, not sitting in a folder on someone’s desktop or in a report that takes 8 hours to generate. A proper business intelligence system will work wonders.

2. Know the whole situation

When you go to make a decision, ensure you know everything (or near everything) that will affect it and that it will in turn affect. Tony Hayward, unfortunately, didn’t realize that a "day off work" would lead to such disastrous results to BP’s already tarnished public image.

3. Gather the troops

When making a decision, it is good practice to ask for the participation of those who will be affected by it. A decision has a much better chance of being a good one if it has the input of those who you will need to support it and stand behind it.

4. Don’t mull

Yes, you should take your time when making a decision to ensure you have taken into consideration all that needs to be, however, you shouldn’t dawdle. Decisions are often time-sensitive, so if you take too much time, the situation may change, someone else might beat you to the punch or you might create bottlenecks. You also don’t want to have the reputation of not being able to make a decision.

5. Accept failure

Let’s face it; at one point or another we all make bad decisions. When this happens, let it be a learning experience. Don’t make excuses or try to ignore it. Investigate why the decision didn’t work – was it lack of, or incorrect information, the execution, outside factors beyond your control, etc. Then decide what would have worked better so you will know for next time. Reviewing your mistakes will only make you a stronger decision-maker and leader.