Six Elements Defining Decision Quality

17 October 2020 | It is truly noteworthy that “whether a decision is good or bad depends on how we make it, not on the outcome.” There are six elements that define decision quality as follows. The Decision Education Foundation provides a framework in “The Fundamentals of Making Good Decisions” booklet.

(1) Helpful Frame: Zoom in on the Decision
Framing is clarifying the decision we’re tackling. To properly frame a decision, we need to define what it is that we are deciding, what we are not deciding, what we should take as given, and what goals we wish to achieve.

A decision frame has three components: (1) Purpose—what we hope to accomplish by this decision; (2) Scope—what to include and exclude in the decision; and (3) Perspective—our point of view about this decision, consideration of other ways to approach it, how others might approach it.

Framing is like taking a picture with a zoom camera. What we include inside the picture is the scope. From where we take the picture to get the right lighting and angle is our perspective. And what kind of picture we want—for example, an action shot or portrait—is the purpose.

(2) Clear Values: What We Really Care About
Values are what we care about—wants, needs, likes, and dislikes They cause us to prefer the consequences of one alternative decision over another.

Frequently, we find decisions difficult to make because none of the alternative actions can satisfy all our values. Such decisions involve trade-offs to define which value is more important in the instance. For example, in choosing a job, we might trade off salary with how much we like the position and how it contributes to the community. Or, in buying a used car, we might trade off saving money with paying for a warranty.

Too often, people make poor decisions by overemphasizing the short term (e.g., buy it now because it’s cheap) and underemphasizing the long-term (e.g., too much credit card debt). Further, we may forget to consider a value that is really important, such as how our decision will affect those we care about. Another point to consider is that sometimes we don’t really know what we truly want. Our values may be in transition. In that case, efforts to clarifying our values are crucial to making quality decisions.

(3) Creative Alternatives: There’s Usually a Better Way
An alternative is one of the possible courses of action available. Without alternatives, we have no decision. Good alternatives are (1) under our control, (2) significantly different, (3) potentially attractive, and (4) doable.

The quality of a decision is limited by the alternatives we consider—we can’t choose an alternative we haven’t thought of! Many people assume they have few or no alternatives. Yet there usually are many more alternatives than appear at first glance. Sometimes, we don’t like the alternatives that are immediately apparent. In both cases, we need to talk to and brainstorm with friends whose experience and judgment we respect, or we need to make wish lists—anything to get our creativity stimulated so we can envision alternative ways to address our decision.

(4) Useful Information: Possible Outcomes and Their Probabilities
Useful information is anything we know, would like to know, or should know that might influence our decision making but that’s not under our control. This includes factual information from the past and judgments about current or future situations that help us anticipate the consequences of acting on our alternatives.

In choosing a car to buy, for example, we would want to know the recent sales price of other similar cars (factual information), whether the car has unknown problems (uncertain current situation), and what the resale value would be in 2 years (uncertain future situation).

The information we base our decisions on should be useful in the sense that it could influence our choice of alternatives. Useful information should come from a credible and unbiased source, be timely, and acknowledge uncertainty. Information about uncertainty, such as the value of the car in 2 years, should recognize the upside and downside risks and their associated probabilities.

Too many decisions are made based on wrong or incomplete information. Consciously considering information needs and gathering useful information before we act is essential to good decision-making.

(5) Sound Reasoning: Does It Make Sense? Can I Explain the Rationale?
Reasoning is the process of combining alternatives, information, and values to arrive at a decision. It completes the sentence, “I am choosing this alternative because…”

Choosing an alternative for an important decision just because it feels right is not enough. Sound reasoning requires an explanation or rationale. For example, we can say we are choosing an alternative because it involves less risk and is better for people we care about than the other alternatives available. To back up this choice, we can articulate the alternatives considered, information taken into account (including risks), values and trade-offs considered, and method for combining all these to arrive at the chosen alternative.

Poor reasoning leads to poor decisions. For example, people frequently assume the upside is more likely and ignore the downside, e.g., “I’ll never get into an accident. Therefore, I’ll save money by not buying car insurance.”

(6) Commitment to Follow Through: Living Decisions Makes Them Real
Commitment to follow through means we are set to execute our decision and can do so purposefully. If we are only half-hearted about our commitment, our follow-through is usually less intense and may not achieve the best results.

Committing to follow-through is like pulling an internal switch—after the switch is on, we do whatever it takes to make our decision real. When we shift from considering a decision to being in the state of commitment, we are clear and can proceed without reservation, conscious of potential consequences.

Successful follow-through requires resources such as time, effort, money, or help from others. It also requires being prepared to overcome obstacles.