why problem solving and decision making skills are important

11 Reasons Why Decision-Making is Important in Management

“Truly successful decision-making relies on a balance between deliberate and instinctive thinking.” – Malcolm Gladwell

Why decision-making is important for the managers?

What are the characteristics of decision-making, how to make effective decisions tips for managers, importance of decision making faqs.

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• Rational thinking: Rational thinking is a crucial characteristic of effective decision-making. It involves analyzing data, weighing the pros and cons, and considering different options before deciding. Managers must use logical reasoning and critical thinking to make informed decisions that align with their team’s goals.
• Process: Decision-making is a process, not a one-time event. It involves gathering information, generating options, evaluating alternatives, and implementing the chosen solution. Managers must understand and follow a structured decision-making process to ensure that all relevant information is considered and that the best decision is made.
• Selective: Effective decision-makers are selective in their approach to problem-solving. They prioritize the most critical issues and allocate resources accordingly while disregarding matters that are less important or have lower priority. This helps them to focus their efforts and make the most impact.
• Purposive: Effective decision-making is purposive, meaning a clear purpose or goal guides it. Managers must understand the purpose of their decisions and ensure that their actions align with their team’s goals. This helps to ensure that decisions are made with the right objectives in mind and that the team is moving in the right direction.
• Positive: Positive decision-making is a process that involves making decisions that result in a positive outcome. Managers must focus on opportunities, seek solutions that benefit the team, and take a proactive approach to problem-solving. They can drive their team forward and achieve their goals by making positive decisions.
• Commitment: Effective decision-makers must be committed to their decisions. They must have the courage to make tough decisions, even when the outcome may be uncertain. By being dedicated, they can ensure that decisions are implemented effectively and that the team moves forward.
• Evaluations: Effective decision-making is a process that involves ongoing evaluations and assessments. Managers must continuously evaluate their decisions’ outcomes and make necessary adjustments. By regularly assessing their findings, they can ensure that they are making the right choices and that their team remains competitive and successful over the long term.
• Reframe the problem: Reframing the problem can help managers to look at it from a different perspective and consider new solutions. By reframing the problem, managers can broaden their thinking and identify more innovative solutions.
• Make evidence-based decisions: Effective decision-making is a process that involves relying on data, research, and other forms of evidence to inform your choices . Managers should gather and analyze relevant data to make informed decisions and minimize the risks associated with their choices.
• Challenge the status quo: Managers should be willing to challenge the status quo and consider new and innovative solutions. By breaking away from traditional thinking and considering new approaches, managers can find unique and practical solutions to problems.
• Get an outside perspective: Seeking the advice and views of others can help managers to broaden their thinking and consider new ideas. However, it’s also important to trust yourself and your instincts when making decisions.
• Develop an eye for risk: Good decision-makers have an eye for risk and can assess potential risks associated with different choices. They weigh each option’s potential risks and benefits before making a decision to ensure that they make choices that are in the best interests of their team.
• Let go of past mistakes: Effective decision-makers don’t dwell on past mistakes but instead learn from them and move forward. By letting go of past mistakes, they can focus on the present and make better decisions in the future.
• Be honest with yourself: Effective decision-makers are open about their strengths, weaknesses, biases, and limitations. They understand that they are not perfect and are willing to admit when they need help. By being honest with themselves, they can make decisions grounded in reality and free of self-deception.

Suprabha Sharma

Suprabha, a versatile professional who blends expertise in human resources and psychology, bridges the divide between people management and personal growth with her novel perspectives at Risely. Her experience as a human resource professional has empowered her to visualize practical solutions for frequent managerial challenges that form the pivot of her writings.

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Evidence Based Decision Making: 4 Proven Hacks For Managers

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What is problem solving and why is it important

By Wayne Stottler , Kepner-Tregoe

• Problem Solving & Decision Making Over time, developing and refining problem solving skills provides the ability to solve increasingly complex problems Learn More

For over 60 years, Kepner-Tregoe has been helping companies across industries and geographies to develop and mature their problem-solving capabilities through KT’s industry leading approach to training and the implementation of best practice processes. Considering that problem solving is a part of almost every person’s daily life (both at home and in the workplace), it is surprising how often we are asked to explain what problem solving is and why it is important.

Problem solving is at the core of human evolution. It is the methods we use to understand what is happening in our environment, identify things we want to change and then figure out the things that need to be done to create the desired outcome. Problem solving is the source of all new inventions, social and cultural evolution, and the basis for market based economies. It is the basis for continuous improvement, communication and learning.

If this problem-solving thing is so important to daily life, what is it?

Problem-solving is the process of observing what is going on in your environment; identifying things that could be changed or improved; diagnosing why the current state is the way it is and the factors and forces that influence it; developing approaches and alternatives to influence change; making decisions about which alternative to select; taking action to implement the changes; and observing impact of those actions in the environment.

Each step in the problem-solving process employs skills and methods that contribute to the overall effectiveness of influencing change and determine the level of problem complexity that can be addressed. Humans learn how to solve simple problems from a very early age (learning to eat, make coordinated movements and communicate) – and as a person goes through life problem-solving skills are refined, matured and become more sophisticated (enabling them to solve more difficult problems).

Problem-solving is important both to individuals and organizations because it enables us to exert control over our environment.

Fixing things that are broken

Some things wear out and break over time, others are flawed from day-1. Personal and business environments are full of things, activities, interactions and processes that are broken or not operating in the way they are desired to work. Problem-solving gives us a mechanism for identifying these things, figuring out why they are broken and determining a course of action to fix them.

Addressing risk

Humans have learned to identify trends and developed an awareness of cause-and-effect relationships in their environment. These skills not only enable us to fix things when they break but also anticipate what may happen in the future (based on past-experience and current events). Problem-solving can be applied to the anticipated future events and used to enable action in the present to influence the likelihood of the event occurring and/or alter the impact if the event does occur.

Improving performance

Individuals and organizations do not exist in isolation in the environment. There is a complex and ever-changing web of relationships that exist and as a result, the actions of one person will often have either a direct impact on others or an indirect impact by changing the environment dynamics. These interdependencies enable humans to work together to solve more complex problems but they also create a force that requires everyone to continuously improve performance to adapt to improvements by others. Problem-solving helps us understand relationships and implement the changes and improvements needed to compete and survive in a continually changing environment.

Seizing opportunity

Problem solving isn’t just about responding to (and fixing) the environment that exists today. It is also about innovating, creating new things and changing the environment to be more desirable. Problem-solving enables us to identify and exploit opportunities in the environment and exert (some level of) control over the future.

Problem solving skills and the problem-solving process are a critical part of daily life both as individuals and organizations. Developing and refining these skills through training, practice and learning can provide the ability to solve problems more effectively and over time address problems with a greater degree of complexity and difficulty. View KT’s Problem Solving workshop known to be the gold standard for over 60 years.

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Why are problem solving skills in the workplace so important? Subskills, benefits, scenarios

Test your candidates' problem-solving skills with testgorilla.

The importance of problem-solving skills in the workplace can’t be overstated. Every business and job role has its problems. From entry-level hires to senior staffers, every one of your employees will face challenges that don’t can’t be answered by doing a quick Google search – or asking ChatGPT to come up with solutions.

That’s why employers must hire people with excellent problem-solving skills, especially for roles that require dealing with complex business challenges, tight deadlines, and changing variables – for example, when recruiting leaders .

But what are problem-solving skills? What role do they play in the workplace? 

And, most importantly, how can you evaluate candidates’ skills before you hire them?

Table of contents

What are problem solving skills, the benefits of problem solving skills: why are problem solving skills important , examples of problems at the workplace – and how problem solving skills can help, how to assess problem solving skills, evaluate problem solving skills and hire candidates who can think for themselves.

To fully understand the importance of problem-solving skills in the workplace, it’s important first to understand the broad skill set that we commonly refer to as “problem solving skills”. 

Generally, problem-solving refers to a person’s ability to successfully manage and find solutions for complex and unexpected situations. 

Candidates with great problem-solving skills have a combination of analytical and creative thinking. They’re comfortable with making decisions and confident enough to rise to challenges in the workplace.

These candidates possess a combination of analytical, creative, and critical-thinking skills – and a high level of attention to detail . As a result, they will quickly identify problems when they arise and identify the most effective solutions. 

They’ll also identify the factors and forces that might have caused the problem and instigate changes to mitigate future challenges.

There are six key problem-solving skills that you should look for when assessing job candidates: 

1. Listening skills

Active listeners are generally great problem solvers. 

They can listen to those around them to gather the information needed to solve the problem at hand. They also recognize the importance of valuing others’ opinions and experiences to help understand why the problem occurred and define the best course of action to remedy it. 

2. Analytical thinking skills 

Analytical thinkers can identify the logical reasons why a problem occurred, what the long-term effects of the issue could be, and identify how effective different solutions might be to select the most practical one. 

That’s why it’s essential to assess analytical thinking skills during recruitment.

3. Creative thinking skills

Creative thinkers can balance their analytical skills with creative approaches to challenges. Creative thinking skills enable individuals to uncover innovative and progressive solutions to problems. 

In this way, they’re able to provide new perspectives and provide imaginative and experimental solutions to all kinds of problems. 

4. Communication skills 

Problem solvers should also possess great communication skills . The ability to effectively relay complex information thoroughly yet succinctly is a huge benefit for employers working in fast-paced environments. 

5. Decision-making skills 

Those with problem-solving skills will also possess the ability to make decisions and be confident in them. This is important, because most problem-solving involves making firm decisions to reach a successful outcome. 

6. Teamwork

Although problem-solvers need to be independent thinkers, it’s also vital for them to work well as part of a team . 

Determining the best solution often requires collaboration, so it’s important that candidates can demonstrate how they can motivate others to come up with the best solutions and work with them to help develop and implement solutions. 

Problem-solving skills enable you to find candidates who are cognitively equipped to handle anything their jobs throw at them.

Problem solvers can observe, judge, and act quickly when difficulties arise when they inevitably do. Moreover, they are not afraid of the unknown, which is invaluable to employers who rely on their employees to identify and solve problems. 

There are several important benefits of problem-solving skills in the workplace. Below, we’ll go through five of the most significant ones that all problem solvers can bring to their roles and workplaces: 

1. Ability to organize their time intelligently 

Time management skills can often be underlooked as one of the benefits of problem-solving skills in the workplace. 

However, those with problem-solving abilities also typically possess stellar time-management skills. The ability to manage their time wisely and laser-focus on what’s important to the business will lead to better decision-making and business impact. 

2. Ability to prioritize, plan, and execute strategies

Problem solvers have no issue with carefully assessing customer and business needs and deciding how to prioritize, plan, and execute strategies to meet them. They can manage all moving parts and strategize to meet multiple unique demands.

3. Ability to think outside the box

Problem solvers can often identify hidden opportunities in problems. Thinking outside of the box is an important problem-solving skill in the workplace, because it can often lead to better outcomes than the originally expected ones. 

4. Ability to work under pressure

This is often one of the most important benefits of problem-solving skills in the workplace. Problem solvers often work well under pressure, for example when dealing with short deadlines and changing project requirements.

Depending on your workplace culture, you might prefer someone who can deliver quick solutions or someone who takes their time to identify the next steps. Both are valid and important problem solving qualities. 

5. Ability to address risk

Planning is an important problem-solving skill. Problem solvers are not just equipped to deal with the problem at hand but are also able to anticipate problems that will arise in the future based on trends, patterns, experience, and current events.

Let’s now look at some specific examples of problems that could arise at the workplace – at any workplace, really – and how employees’ problem solving skills can help address each issue. 

Below, you’ll find five typical scenarios where problem solving skills are essential.

Conflict between team members

Poor team dynamics or lack of a collaborative spirit might result in frequent workplace conflicts – especially within larger teams.

For example, members of cross-functional teams might disagree on the way they should address a particular issue or even on the priority they should give to it. 

How problem solving skills can help: 

Teamwork is essential when solving conflict – and a cornerstone of effective cross-functional team leadership .

For this, coworkers need to share a common understanding of the team’s goals and also be willing to work towards achieving them, even when they disagree on the specific approaches to each goal.  The ability to understand others’ perspectives, analyze information critically, and come up with a few different solutions is key to finding a common ground and making progress on the team’s objectives.

Inefficient processes

Outdated, inefficient processes can reduce productivity and frustrate employees.

Multi-step approval processes are a typical example of this. Having multiple layers of approval for routine decisions can significantly slow down team progress and lead to missed opportunities.

Analytical thinking skills are key in identifying inefficiencies and building better procedures. Employees or team leads can build flowcharts that speed up decision making without having to ask a supervisor’s permission at every step of the process. 

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Poor communication can lead to misunderstandings and lack of clarity and direction – which, in turn, can be detrimental to team performance. 

For example, if you’re a remote-first company, maintaining clear and effective remote communication can be challenging. 

The over-reliance on emails and messaging apps might make it feel like teams are communicating effectively and are always connected. However, the lack of non-verbal cues and face-to-face interactions might make it more difficult to build rapport and a positive workplace culture .

Listening skills are essential to solving communication issues – and good listeners are often excellent at solving problems by recognizing, understanding, and acknowledging others’ points of view. 

One-on-one meetings enable people to communicate more freely and effectively and solve challenges together, so consider encouraging team members to hop on a call each time they encounter a difficult challenge.

Additionally, you can help employees bond with each other with some remote team building activities to improve team cohesion. Plus, problem solving challenges can be excellent team building exercises.

Technological disruptions 

New technologies often disrupt the usual ways of doing things – and sometimes, this can be disruptive for entire teams’ work. 

For example, generative AI and automation technologies have revolutionized numerous types of work, including data analysis, marketing, customer service, and even content creation.

Creative thinking and cognitive flexibility are among the top 10 most important skills of the future , according to the World Economic Forum. Both are essential for adopting new technologies successfully – and finding ways to make the most out of each new tool to improve productivity. 

Insufficient onboarding resources 

Team members may struggle to do their best work if they haven't received proper training or resources.

For example, start-ups that experience rapid growth might hire a few employees at once – or even entire teams. 

If they fail to allocate sufficient time and resources to onboarding new hires, this might lead to lost productivity, a lacking sense of belonging, or increased turnover. That’s true not only for junior employees but also for newly hired senior leaders , as the Harvard Business Review points out.

Your leadership team’s analytical and decision-making skills are crucial in enabling them to distribute limited resources in a way that would give their teams the best chances of success. 

To build a solid onboarding process , you need leaders who are able to take ownership of it – and who have the right problem-solving skills.

Many organizations use problem-solving interview questions to identify the right candidates for their job openings. However, the most effective way to assess problem-solving skills is with pre-employment skills assessments . 

That’s because skills tests provide an objective way to quantify a candidate’s problem-solving skills in a way that isn’t possible during an interview.

How problem solving skills tests work

Tests like TestGorilla’s problem-solving skills test assist organizations in finding candidates who are able to quickly identify the key elements of the problem and work through the problem at speed without making mistakes. 

By presenting candidates with a wide range of questions related to typical problem-solving scenarios, hiring teams can rank their candidates based on an intensive assessment of each candidate’s skill level.

The test specifically evaluates whether a candidate can perform problem-solving tasks like:

Creating and adjust schedules

Prioritizing items based on a given set of rules

Interpreting data and applying logic to make decisions

Analyzing textual and numerical information to draw conclusions

As you can see, even the best interviewer would have trouble assessing each of these skill areas while still covering all the other questions that they need to ask. 

If you’re convinced of the importance of problem-solving skills in the workplace and want to build a team of employees that can think independently and solve their own problems without constant supervision, assess problem-solving skills during the hiring process. 

Problem-solving skills tests like ours are an excellent way to achieve this – especially if you combine them with other skills tests. Check out our extensive test library for other tests you can use in your talent assessment process to hire the best talent. 

Sign up for our free plan to start building your first assessment – or schedule a demo with one of our experts to see how to evaluate applicants’ problem solving skills quickly, efficiently, and without bias. 

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• INTERPERSONAL SKILLS
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The SkillsYouNeed Guide to Interpersonal Skills

Making decisions and solving problems are two key areas in life, whether you are at home or at work. Whatever you’re doing, and wherever you are, you are faced with countless decisions and problems, both small and large, every day.

Many decisions and problems are so small that we may not even notice them. Even small decisions, however, can be overwhelming to some people. They may come to a halt as they consider their dilemma and try to decide what to do.

Small and Large Decisions

In your day-to-day life you're likely to encounter numerous 'small decisions', including, for example:

Tea or coffee?

What shall I have in my sandwich? Or should I have a salad instead today?

What shall I wear today?

Larger decisions may occur less frequently but may include:

Should we repaint the kitchen? If so, what colour?

Should we relocate?

Should I propose to my partner? Do I really want to spend the rest of my life with him/her?

These decisions, and others like them, may take considerable time and effort to make.

The relationship between decision-making and problem-solving is complex. Decision-making is perhaps best thought of as a key part of problem-solving: one part of the overall process.

Our approach at Skills You Need is to set out a framework to help guide you through the decision-making process. You won’t always need to use the whole framework, or even use it at all, but you may find it useful if you are a bit ‘stuck’ and need something to help you make a difficult decision.

Decision Making

Effective Decision-Making

This page provides information about ways of making a decision, including basing it on logic or emotion (‘gut feeling’). It also explains what can stop you making an effective decision, including too much or too little information, and not really caring about the outcome.

A Decision-Making Framework

This page sets out one possible framework for decision-making.

The framework described is quite extensive, and may seem quite formal. But it is also a helpful process to run through in a briefer form, for smaller problems, as it will help you to make sure that you really do have all the information that you need.

Problem Solving

Introduction to Problem-Solving

This page provides a general introduction to the idea of problem-solving. It explores the idea of goals (things that you want to achieve) and barriers (things that may prevent you from achieving your goals), and explains the problem-solving process at a broad level.

The first stage in solving any problem is to identify it, and then break it down into its component parts. Even the biggest, most intractable-seeming problems, can become much more manageable if they are broken down into smaller parts. This page provides some advice about techniques you can use to do so.

Sometimes, the possible options to address your problem are obvious. At other times, you may need to involve others, or think more laterally to find alternatives. This page explains some principles, and some tools and techniques to help you do so.

Having generated solutions, you need to decide which one to take, which is where decision-making meets problem-solving. But once decided, there is another step: to deliver on your decision, and then see if your chosen solution works. This page helps you through this process.

‘Social’ problems are those that we encounter in everyday life, including money trouble, problems with other people, health problems and crime. These problems, like any others, are best solved using a framework to identify the problem, work out the options for addressing it, and then deciding which option to use.

This page provides more information about the key skills needed for practical problem-solving in real life.

Further Reading from Skills You Need

The Skills You Need Guide to Interpersonal Skills eBooks.

Develop your interpersonal skills with our series of eBooks. Learn about and improve your communication skills, tackle conflict resolution, mediate in difficult situations, and develop your emotional intelligence.

Guiding you through the key skills needed in life

As always at Skills You Need, our approach to these key skills is to provide practical ways to manage the process, and to develop your skills.

Neither problem-solving nor decision-making is an intrinsically difficult process and we hope you will find our pages useful in developing your skills.

Start with: Decision Making Problem Solving

See also: Improving Communication Interpersonal Communication Skills Building Confidence

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How to Make Great Decisions, Quickly

• Martin G. Moore

It’s a skill that will set you apart.

As a new leader, learning to make good decisions without hesitation and procrastination is a capability that can set you apart from your peers. While others vacillate on tricky choices, your team could be hitting deadlines and producing the type of results that deliver true value. That’s something that will get you — and them — noticed. Here are a few of a great decision:

• Great decisions are shaped by consideration of many different viewpoints. This doesn’t mean you should seek out everyone’s opinion. The right people with the relevant expertise need to clearly articulate their views to help you broaden your perspective and make the best choice.
• Great decisions are made as close as possible to the action. Remember that the most powerful people at your company are rarely on the ground doing the hands-on work. Seek input and guidance from team members who are closest to the action.
• Great decisions address the root cause, not just the symptoms. Although you may need to urgently address the symptoms, once this is done you should always develop a plan to fix the root cause, or else the problem is likely to repeat itself.
• Great decisions balance short-term and long-term value. Finding the right balance between short-term and long-term risks and considerations is key to unlocking true value.
• Great decisions are timely. If you consider all of the elements listed above, then it’s simply a matter of addressing each one with a heightened sense of urgency.

Where your work meets your life. See more from Ascend here .

Like many young leaders, early in my career, I thought a great decision was one that attracted widespread approval. When my colleagues smiled and nodded their collective heads, it reinforced (in my mind, at least) that I was an excellent decision maker.

• MM Martin G. Moore is the founder of Your CEO Mentor and author of No Bullsh!t Leadership and host of the No Bullsh!t Leadership podcast. His purpose is to improve the quality of leaders globally through practical, real world leadership content. For more information, please visit, www.martingmoore.com.

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The Importance and Development of Decision-making and Problem-solving Skills

• | February 23, 2020
• | Life Skliis

Last Updated on October 18, 2023

Decision making and problem solving are vital skills in both personal and professional life. This article explores the relationship between problem solving vs decision making, the types of decision makers, and why honing these skills is essential. We’ll also examine the importance of problem-solving skills and how to maintain effective decision making .

Problem Solving vs Decision Making: Understanding the Distinction

Problem solving vs decision making is a critical comparison to make, as it helps us differentiate these two essential skills.

Problem Solving: A Systematic Approach

Problem solving is a structured, methodical process aimed at identifying possible answers or solutions to a given situation. To effectively solve a problem, it’s essential to distinguish between causes and symptoms. For instance, when dealing with an issue like a malfunctioning AC, ensure that the actual problem, like dead batteries or incorrect settings, is identified before rushing to a solution. This systematic approach not only saves time but also prevents missteps. Effective problem-solving skills are crucial in daily life, whether you’re an individual or part of a larger organization. Leaders and managers, especially, rely on these skills to address complex issues.

Decision Making: The Culmination of Problem Solving

The relationship between problem solving vs decision making is such that decision making is the action that arises from insights collected during the problem-solving process. To make sound decisions, you need to consider multiple options, evaluate their impact on the organization, weigh the ethical considerations, and assess the effect on all involved parties. Decisions need to be made in a timely manner, with a list of priorities to guide you when facing multiple issues. Successful decision making is especially vital for leaders and managers, as their choices significantly influence the people under their care.

Two Types of Decision Makers

Understanding the two predominant types of decision makers can provide valuable insights into effective decision making.

Methodical Decision Makers

This type adopts a rational and methodical approach in the problem solving vs decision making dilemma. They gather information, consult others, and meticulously analyze the available options. Their decisions are well-reasoned and data-driven, making them suitable for complex, critical choices. This approach is common among professionals and leaders who need to ensure that decisions are thoroughly evaluated.

Instinctive Decision Makers

Instinctive decision makers rely on their emotions and intuition in the problem solving vs decision making process. While their decisions can be creative, they may struggle to explain the reasoning behind their choices. This approach is often driven by spontaneity and may work well for less complex, day-to-day decisions. However, it’s crucial to strike a balance between intuition and reason, as gut feelings alone may not suffice in complex situations.

The Importance of Problem Solving vs Decision Making Skills

The significance of problem-solving vs decision-making skills cannot be overstated.

Leaders and Managers’ Role

Leaders and managers play a critical role in driving the decision-making process, making them central figures in the problem solving vs decision making debate. Their decisions shape the course of their organizations and the lives of those they lead. Developing effective decision-making skills is an ongoing process for them.

Enhancing the Decision-Making Process

Once a decision is made in the problem solving vs decision making context, it must be implemented and evaluated. This step provides valuable insights into the decision-making process and the effectiveness of the chosen solution. The gathered information can help improve future decision making.

Why List Possible Solutions?

Listing possible solutions is a fundamental aspect of the decision-making process in the problem solving vs decision making challenge. It allows you to explore alternatives and ensure that the most suitable option is chosen. It also helps you consider the broader impact of your decision, including cost, ethics, and how it affects all parties involved.

In conclusion, the comparison of problem solving vs decision making is crucial for understanding their respective roles. Methodical and instinctive decision-making approaches each have their place, and leaders and managers must strike a balance between them. Effective decision making and problem-solving skills are crucial in navigating the complex challenges of the modern world. By understanding the relationship between these two processes and constantly refining these skills, individuals and organizations can make more informed and impactful choices.

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Importance Of Problem-Solving Skills In The Workplace

November 10, 2022

Oxford Languages defines problem-solving as the process of finding solutions that help resolve complicated issues. Problems needing solutions vary from fundamental personal issues of "how do I turn on this laptop?" to more complex topics in academics and business.

What are problem-solving skills?

Problem-solving skills help us solve issues quickly and effectively and hold much importance in our personal and professional lives.

As humans, we all deal with problems. Even if we do not know how to fix the problem, we can process it and understand why it happened in the first place.

Then, we can apply logic to find some solutions to resolve it—no wonder most employers seek problem-solving skills in candidates. Solving problems is beneficial in almost every job role and can help support competency management .

What do problem-solving skills in the workplace look like?

At the core of business development, problem-solving skills enable employees to leverage the available resources to arrive at a solution productively that syncs with the company's integrity. Some examples of problem-solving in the workplace include:

• Handling and resolving a conflict with a coworker
• Troubleshooting and eliminating technical issues in a work laptop
• Solving any problems related to accounting, taxation, and customer billing
• Taking the initiative when a team member missed or overlooked something important
• Extracting a new piece of data that can guide a company's strategy in a specific area

In a nutshell, problem-solving is a part of everyone's work - whether they are a manager with years of experience or starting their first job. It may test your critical-thinking skills or involve the use of mathematical operations.

Why are problem-solving skills important in the workplace?

When prospective employers talk about problem-solving, their goal is to measure how candidates support the decision-making process in the company's everyday functioning by applying this skill. Here are four reasons why problem-solving is an important skill to have in the workplace:

1. Strategy prioritization, planning, and execution

Efficient problem-solvers can carefully assess customer requirements and put together a plan that helps them provide a brilliant service to their intended audience. Their forte lies in streamlining processes by removing bottlenecks.

2. Out-of-the-box thinking

Problem-solving and creative thinking go hand-in-hand. It is not a matter of putting a bandaid over an issue but finding a way to fix it dynamically and creatively. This attitude helps the business stay ahead of the curve and improves the workforce's capability over time.

3. Better time management

When a problem arises, it needs to be fixed at the earliest. Employees with excellent problem-solving skills are laser-focused on what is vital to the business and can roll with the punches and tight deadlines to deliver when it matters.

4. Risk management

Planning effectively is an essential problem-solving skill to have. Problem-solvers can react quickly to short-term situations without losing sight of the future. Their positive attitude towards learning agility helps them anticipate problems that may arise in the future based on past experiences, industry trends and patterns, and current events.

What are the four stages of problem-solving in the workplace?

Understanding the critical components involved in problem-solving will help you better demonstrate your expertise to your managers. Businesses rely on people who can assess different types of situations and calmly identify solutions. Strong problem-solvers are a valuable addition to any team. Here are the four stages of problem-solving that you must know about:

1. Understand the problem

First, analyze the situation carefully to learn more about the problem. Many employees jump to providing solutions before determining the cause of the problem. Try anticipating the behavior and response of the people affected by it.

Based on your preliminary observation, undertake the following activities to pinpoint the problem more accurately:

• Separate facts from opinions.
• Analyze company policies and procedures.
• Determine the process where the problem exists.
• Discuss with team members involved to gather more information.

When defining a problem, please stay focused on it rather than define it in terms of a solution at this stage. For instance, if the sales numbers need to be consistent in the next quarter, simply say the sales numbers are inconsistent.

A quick way to verify whether you understand what you are dealing with is to explain it to a fellow team member. This ties into your communication skills. If you can talk about the issue clearly with others, it means you understand the case in your hands.

Depending on the complexity of the problem, you may want to use flowcharts or cause-and-effect graphs to define the problem and its root causes.

2. List all possible solutions

Workplace solutions are either strategic or tactical. A strategic solution is a long-term fix for an issue. This requires you to take a series of steps to process the entire architecture of the problem.

On the other hand, a tactical solution is more of a short-term fix. It could be as simple as reusing a piece of code from your last development project to eliminate the irritating error message in your new one.

Brainstorm all possible ways to solve the existing problem. Problem-solving delivers better results with cognitive diversity . Therefore, make sure you get the team members affected by it and those who may have more experience with the type of challenge you are facing to brainstorm potential solutions. Conduct discussions face-to-face or virtually and use surveys.

Spot and remove every aspect that slows down your problem-solving. Ensure the ideas and suggestions put forward to align with the relevant goals and objectives. Create a list of 5-8 long-term and short-term solutions.

3. Evaluate the solutions

Assess the pros and cons of each solution and identify the resources required for their implementation, including personnel, time allocation, budget constraints, and data requirements. Ask yourself the following questions:

• Is the solution practical and easy to implement?
• Is it acceptable to everyone involved?
• Does it solve the problem smoothly without creating another problem?
• Does it fit within the company's procedures and policies?

The ability to promptly evaluate solutions ties into your management skills. Train yourself to identify as many parameters as possible, such as duration, efficiency, cost-effectiveness, and practicality, so you can come up with the most effective solution in a shorter period.

4. Implement and monitor the progress of the chosen solution

Create an action plan to implement the solution. Define its objectives and divide them into measurable targets for monitoring the implementation. Set timelines for implementation. Communicate the plan to everyone involved.

After that, continuously monitor the progress to ensure your solution works. Gather feedback from others and data to check whether the solution helps resolve the problem. You may need to adjust the resolution if anything unexpected arises, so please be prepared for that.

What are the critical problem-solving skills in the workplace?

Problem-solving skills enable you to seek and engage candidates who are cognitively equipped to handle anything their jobs throw at them. Problem solvers can observe, judge, and act quickly when the situation demands it- without negatively impacting the business. Here are the top problem-solving skills in the workplace:

1. Decision-making prowess

Decision-making skills are an essential part of problem-solving. That is because you can only solve it if you wholly understand the problem and decide to do something about it. Decision-making skills help professionals quickly choose between two or more alternatives after evaluating the pros and cons of each.

2. Communication

Successfully communicating the problem and recommending solutions for it verbally and in writing is an art in itself. Proper communication ensures solutions are carried out effectively, and everyone involved in the conflict is on the same page.

3. Open-mindedness

Open-mindedness is essentially the willingness to look at things from a different perspective and consider new ideas. When you have a problem in front of you, review its various aspects to come up with the best solution possible. Being curious and aware helps one be a better problem-solver.

4. Analytics skills

Nearly all problem-solving cases require some form of analysis - forecasting, critical thinking, or troubleshooting. Analytical skills empower you to understand the problem better and develop practical solutions based on facts and evidence.

5. Teamwork

Collaboration is the key to ensuring communication lines are always open, problems are addressed cooperatively, and the team's objectives precede personal goals.

Team dynamics are critical to problem-solving as it helps you work well with others towards a common goal. Necessary collaboration skills include conflict resolution, emotional intelligence, empathy, sensitivity, and respect.

Over to you

In hiring, pre-employment aptitude tests assess qualities critical to most jobs, such as critical thinking, abstract reasoning, attention to detail, and so on. Problem-solving, specifically, is also a significant predictor of job performance .

However, this skill is as varied as the issues it is applied to. The best problem solvers use the same basic approach to identify and solve problems and incorporate all the skills and steps discussed in the blog post for successful results.

Adaface's aptitude tests help evaluate a candidate's ability to understand instruction, analyze the information at hand, and respond to complicated situations or problems.

The questions are designed to fetch insights into the candidates' problem-solving and coachability. Check them out!

• Problem-solving test
• Logical reasoning test
• Critical thinking test

Asavari is an EiR at Adaface. She has made it her mission to help recruiters deploy candidate-friendly skill tests instead of trick-question based tests. When taking a break, she obsesses over art.

Spending too much time screening candidates?

We make it easy for you to find the best candidates in your pipeline- with a 40 min skills test.

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What is decision making?

Decisions, decisions. When was the last time you struggled with a choice? Maybe it was this morning, when you decided to hit the snooze button—again. Perhaps it was at a restaurant, with a miles-long menu and the server standing over you. Or maybe it was when you left your closet in a shambles after trying on seven different outfits before a big presentation. Often, making a decision—even a seemingly simple one—can be difficult. And people will go to great lengths—and pay serious sums of money—to avoid having to make a choice. The expensive tasting menu at the restaurant, for example. Or limiting your closet choices to black turtlenecks, à la Steve Jobs.

Get to know and directly engage with senior McKinsey experts on decision making

Aaron De Smet is a senior partner in McKinsey’s New Jersey office, Eileen Kelly Rinaudo  is McKinsey’s global director of advancing women executives and is based in the New York office, Frithjof Lund is a senior partner in the Oslo office, and Leigh Weiss is a senior adviser in the Boston office.

If you’ve ever wrestled with a decision at work, you’re definitely not alone. According to McKinsey research, executives spend a significant portion of their time— nearly 40 percent , on average—making decisions. Worse, they believe most of that time is poorly used. People struggle with decisions so much so that we actually get exhausted from having to decide too much, a phenomenon called decision fatigue.

But decision fatigue isn’t the only cost of ineffective decision making. According to a McKinsey survey of more than 1,200 global business leaders, inefficient decision making costs a typical Fortune 500 company 530,000 days  of managers’ time each year, equivalent to about $250 million in annual wages. That’s a lot of turtlenecks.

How can business leaders ease the burden of decision making and put this time and money to better use? Read on to learn the ins and outs of smart decision making—and how to put it to work.

Learn more about our People & Organizational Performance Practice .

How can organizations untangle ineffective decision-making processes?

McKinsey research has shown that agile is the ultimate solution for many organizations looking to streamline their decision making . Agile organizations are more likely to put decision making in the right hands, are faster at reacting to (or anticipating) shifts in the business environment, and often attract top talent who prefer working at companies with greater empowerment and fewer layers of management.

For organizations looking to become more agile, it’s possible to quickly boost decision-making efficiency by categorizing the type of decision to be made and adjusting the approach accordingly. In the next section, we review three types of decision making and how to optimize the process for each.

What are three keys to faster, better decisions?

Business leaders today have access to more sophisticated data than ever before. But it hasn’t necessarily made decision making any easier. For one thing, organizational dynamics—such as unclear roles, overreliance on consensus, and death by committee—can get in the way of straightforward decision making. And more data often means more decisions to be taken, which can become too much for one person, team, or department. This can make it more difficult for leaders to cleanly delegate, which in turn can lead to a decline in productivity.

Leaders are growing increasingly frustrated with broken decision-making processes, slow deliberations, and uneven decision-making outcomes. Fewer than half  of the 1,200 respondents of a McKinsey survey report that decisions are timely, and 61 percent say that at least half the time they spend making decisions is ineffective.

What’s the solution? According to McKinsey research, effective solutions center around categorizing decision types and organizing different processes to support each type. Further, each decision category should be assigned its own practice—stimulating debate, for example, or empowering employees—to yield improvements in effectiveness.

Here are the three decision categories  that matter most to senior leaders, and the standout practice that makes the biggest difference for each type of decision.

• Big-bet decisions are infrequent but high risk, such as acquisitions. These decisions carry the potential to shape the future of the company, and as a result are generally made by top leaders and the board. Spurring productive debate by assigning someone to argue the case for and against a potential decision can improve big-bet decision making.
• Cross-cutting decisions, such as pricing, can be frequent and high risk. These are usually made by business unit heads, in cross-functional forums as part of a collaborative process. These types of decisions can be improved by doubling down on process refinement. The ideal process should be one that helps clarify objectives, measures, and targets.
• Delegated decisions are frequent but low risk and are handled by an individual or working team with some input from others. Delegated decision making can be improved by ensuring that the responsibility for the decision is firmly in the hands of those closest to the work. This approach also enhances engagement and accountability.

In addition, business leaders can take the following four actions to help sustain rapid decision making :

• Focus on the game-changing decisions, ones that will help an organization create value and serve its purpose.
• Convene only necessary meetings, and eliminate lengthy reports. Turn unnecessary meetings into emails, and watch productivity bloom. For necessary meetings, provide short, well-prepared prereads to aid in decision making.
• Clarify the roles of decision makers and other voices. Who has a vote, and who has a voice?
• Push decision-making authority to the front line—and tolerate mistakes.

Introducing McKinsey Explainers : Direct answers to complex questions

How can business leaders effectively delegate decision making.

Business is more complex and dynamic than ever, meaning business leaders are faced with needing to make more decisions in less time. Decision making takes up an inordinate amount of management’s time—up to 70 percent for some executives—which leads to inefficiencies and opportunity costs.

As discussed above, organizations should treat different types of decisions differently . Decisions should be classified  according to their frequency, risk, and importance. Delegated decisions are the most mysterious for many organizations: they are the most frequent, and yet the least understood. Only about a quarter of survey respondents  report that their organizations make high-quality and speedy delegated decisions. And yet delegated decisions, because they happen so often, can have a big impact on organizational culture.

The key to better delegated decisions is to empower employees by giving them the authority and confidence to act. That means not simply telling employees which decisions they can or can’t make; it means giving employees the tools they need to make high-quality decisions and the right level of guidance as they do so.

Here’s how to support delegation and employee empowerment:

• Ensure that your organization has a well-defined, universally understood strategy. When the strategic intent of an organization is clear, empowerment is much easier because it allows teams to pull in the same direction.
• Clearly define roles and responsibilities. At the foundation of all empowerment efforts is a clear understanding of who is responsible for what, including who has input and who doesn’t.
• Invest in capability building (and coaching) up front. To help managers spend meaningful coaching time, organizations should also invest in managers’ leadership skills.
• Build an empowerment-oriented culture. Leaders should role model mindsets that promote empowerment, and managers should build the coaching skills they want to see. Managers and employees, in particular, will need to get comfortable with failure as a necessary step to success.
• Decide when to get involved. Managers should spend effort up front to decide what is worth their focused attention. They should know when it’s appropriate to provide close guidance and when not to.

How can you guard against bias in decision making?

Cognitive bias is real. We all fall prey, no matter how we try to guard ourselves against it. And cognitive and organizational bias undermines good decision making, whether you’re choosing what to have for lunch or whether to put in a bid to acquire another company.

Here are some of the most common cognitive biases and strategies for how to avoid them:

• Confirmation bias. Often, when we already believe something, our minds seek out information to support that belief—whether or not it is actually true. Confirmation bias  involves overweighting evidence that supports our belief, underweighting evidence against our belief, or even failing to search impartially for evidence in the first place. Confirmation bias is one of the most common traps organizational decision makers fall into. One famous—and painful—example of confirmation bias is when Blockbuster passed up the opportunity  to buy a fledgling Netflix for $50 million in 2000. (Actually, that’s putting it politely. Netflix executives remember being “laughed out” of Blockbuster’s offices.) Fresh off the dot-com bubble burst of 2000, Blockbuster executives likely concluded that Netflix had approached them out of desperation—not that Netflix actually had a baby unicorn on its hands.
• Herd mentality. First observed by Charles Mackay in his 1841 study of crowd psychology, herd mentality happens when information that’s available to the group is determined to be more useful than privately held knowledge. Individuals buy into this bias because there’s safety in the herd. But ignoring competing viewpoints might ultimately be costly. To counter this, try a teardown exercise , wherein two teams use scenarios, advanced analytics, and role-playing to identify how a herd might react to a decision, and to ensure they can refute public perceptions.
• Sunk-cost fallacy. Executives frequently hold onto underperforming business units or projects because of emotional or legacy attachment . Equally, business leaders hate shutting projects down . This, researchers say, is due to the ingrained belief that if everyone works hard enough, anything can be turned into gold. McKinsey research indicates two techniques for understanding when to hold on and when to let go. First, change the burden of proof from why an asset should be cut to why it should be retained. Next, categorize business investments according to whether they should be grown, maintained, or disposed of—and follow clearly differentiated investment rules  for each group.
• Ignoring unpleasant information. Researchers call this the “ostrich effect”—when people figuratively bury their heads in the sand , ignoring information that will make their lives more difficult. One study, for example, found that investors were more likely to check the value of their portfolios when the markets overall were rising, and less likely to do so when the markets were flat or falling. One way to help get around this is to engage in a readout process, where individuals or teams summarize discussions as they happen. This increases the likelihood that everyone leaves a meeting with the same understanding of what was said.
• Halo effect. Important personal and professional choices are frequently affected by people’s tendency to make specific judgments based on general impressions . Humans are tempted to use simple mental frames to understand complicated ideas, which means we frequently draw conclusions faster than we should. The halo effect is particularly common in hiring decisions. To avoid this bias, structured interviews can help mitigate the essentializing tendency. When candidates are measured against indicators, intuition is less likely to play a role.

For more common biases and how to beat them, check out McKinsey’s Bias Busters Collection .

Learn more about Strategy & Corporate Finance consulting  at McKinsey—and check out job opportunities related to decision making if you’re interested in working at McKinsey.

Articles referenced include:

• “ Bias busters: When the crowd isn’t necessarily wise ,” McKinsey Quarterly , May 23, 2022, Eileen Kelly Rinaudo , Tim Koller , and Derek Schatz
• “ Boards and decision making ,” April 8, 2021, Aaron De Smet , Frithjof Lund , Suzanne Nimocks, and Leigh Weiss
• “ To unlock better decision making, plan better meetings ,” November 9, 2020, Aaron De Smet , Simon London, and Leigh Weiss
• “ Reimagine decision making to improve speed and quality ,” September 14, 2020, Julie Hughes , J. R. Maxwell , and Leigh Weiss
• “ For smarter decisions, empower your employees ,” September 9, 2020, Aaron De Smet , Caitlin Hewes, and Leigh Weiss
• “ Bias busters: Lifting your head from the sand ,” McKinsey Quarterly , August 18, 2020, Eileen Kelly Rinaudo
• “ Decision making in uncertain times ,” March 24, 2020, Andrea Alexander, Aaron De Smet , and Leigh Weiss
• “ Bias busters: Avoiding snap judgments ,” McKinsey Quarterly , November 6, 2019, Tim Koller , Dan Lovallo, and Phil Rosenzweig
• “ Three keys to faster, better decisions ,” McKinsey Quarterly , May 1, 2019, Aaron De Smet , Gregor Jost , and Leigh Weiss
• “ Decision making in the age of urgency ,” April 30, 2019, Iskandar Aminov, Aaron De Smet , Gregor Jost , and David Mendelsohn
• “ Bias busters: Pruning projects proactively ,” McKinsey Quarterly , February 6, 2019, Tim Koller , Dan Lovallo, and Zane Williams
• “ Decision making in your organization: Cutting through the clutter ,” McKinsey Quarterly , January 16, 2018, Aaron De Smet , Simon London, and Leigh Weiss
• “ Untangling your organization’s decision making ,” McKinsey Quarterly , June 21, 2017, Aaron De Smet , Gerald Lackey, and Leigh Weiss
• “ Are you ready to decide? ,” McKinsey Quarterly , April 1, 2015, Philip Meissner, Olivier Sibony, and Torsten Wulf.

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POWERING WORKPLACE PERFORMANCE

20 december, 2022, why problem solving skills matter in the workplace.

Whether you’re an artist, a software developer or a CEO of a multinational conglomerate, problem solving skills are a critical asset in any professional setting.

Closely linked to other cognitive competencies including self-management and critical thinking, problem solving is a key workplace skill that empowers employees to manage change, communicate effectively and bring a fresh perspective to old problems. But to harness the benefits of logical and adaptive thinking in the workplace, organisations must take concerted action to foster problem solving skills in their employees.

What do problem solving skills in the workplace look like?

Workplace problem solving has several prominent distinctions when compared to problem solving in other contexts. This includes the formal and goal-oriented structure of the problem, as well as the critical role of teamwork in reaching a solution. An individual who shows competence in problem solving outside the workplace may not necessarily thrive when confronting a workplace issue.

A lack of problem solving skills in the workplace can be detrimental to businesses. Problem solving skills enable employees to evaluate and effectively resolve daily challenges.  Every job role within a business will face challenges and unexpected situations. Problem solving skills provide employees with the ability to recognise and analyse problems, identify and evaluate a range of potential solutions and then decide on and implement the most effective solution.

A workforce equipped with problem solving skills will be adaptive and ready to face the challenges of the constantly evolving modern workplace. Its employees will demonstrate an ability to:

• Listen actively
• Think analytically and creatively
• Come up with innovative solutions
• Communicate effectively
• Make decisions confidently based on evidence
• Work together as a team

The importance of problem solving skills in the workplace

Problem solving is a vital skill in the workplace. The ability to think logically and creatively empowers individuals to tackle challenges and seize opportunities in all levels of business. This in turn helps to achieve the following benefits of problem solving skills in the workplace:

Time and resources are used efficiently

All businesses have limited time and resources. This means that when a problem arises, it must be resolved as quickly as possible leveraging available resources. One of the major benefits of problem solving skills in the workplace is that employees can utilise their innovative thinking to prioritise tasks and focus on pressing challenges facing the business. This will result in them providing effective solutions that utilise available resources within the time frame available.

Improved problem solving skills also lead to improved time management as employees learn to make quick and effective decisions. Problem solving skills become even more critical where employees are expected to  provide solutions to complex or urgent problems.

The business can better respond to changing client needs

One of the primary purposes of a business is to deliver reliable and excellent service to their clients. Satisfied clients buy more goods or services, create positive advertising by word-of-mouth and generate referrals. But businesses operate in a changing world, which leads to changing client needs that must be anticipated as early as possible.

Employees must be able to take the initiative to respond to those changing needs. A workforce equipped with problem solving skills can quickly reposition itself to better meet shifts in client needs and developments in the environment in which those clients operate.

The business stays ahead of the curve

To stay ahead of the curve, a business must be proactive across all levels. Change in the modern workplace is constant and businesses must come up with fast solutions to problems and be prepared to take advantage of new opportunities as they arise.  Employees must be confident to continually challenge the norm and swiftly adapt to changes in the business and the market.

A team that can confidently solve problems will see problems as an opportunity to initiate change and growth, which will help to keep the business ahead of competitors.

The business can anticipate risk

Employees equipped with problem solving skills can handle difficult situations that arise in the workplace. They can expertly deal with challenges that create risk for the business.

A successful business must be able to assess the probability of something going wrong and be able to anticipate the negative consequences if it does. Problem solving skills assist employees to foresee the likely sources of risk to the business and to make considered decisions as to the best way to manage those risks. These skills also play a key role in refining an organisation’s internal talent pipeline.

Strategies for developing problem solving in employees

When developing problem solving in the workplace, it is critical to take a flexible approach that addresses the needs of both current and future employees.

Emphasise problem solving in recruitment and assessment

Whether they are entry level, managers or senior executives, problem solving is a crucial skill for all your employees. Skills that indicate a strong problem solving ability are listening skills, analytical thinking skills, creative thinking skills and communication skills. These skills should be sought out and encouraged in both recruitment and assessment.

One way to identify problem solving skills in interviews is by giving candidates problems that they must solve on the spot within a limited time frame. Interviewers can then assess both the solution that the candidate came up with as well as how they responded to the unexpected challenge.

Self management, not micromanagement

Micromanagement can impede a business’ ability to reach its goals. Instead of raising productivity, micromanagement is more likely to lower the morale of your employees, stifle creativity and damage trust. Employees must have the ability and be given the opportunity to manage their own workflow and productivity without constantly relying on a supervisor.

Problem solving skills will help equip your employees with the ability to self manage their tasks and projects. Through purposeful self management , they will be able to take initiative to solve both the straightforward and complex problems faced in their role.

Give employees goals rather than instructions

Giving employees step-by-step instructions as to how to complete each aspect of their job will not result in an agile and innovative workforce. Rather, it will restrict their ability to seek out new methods and evaluate current contexts.

By providing employees with goals rather than limiting instructions, businesses can increase employee engagement and productivity. This in turn can help empower employees to contribute meaningfully to larger business objectives.

Promote a culture of innovation and collaboration

A successful and resilient business supports its employees with a culture that promotes innovation and collaboration. Problem solving skills will allow your employees to build relationships and excel at daily decision making processes.

Good problem solvers possess good communication skills and can collaborate effectively with their team. They can also think laterally and creatively to find innovative solutions to problems and find opportunities for business development.

Ensure employees have the resources to solve problems

In order to identify issues and discover impactful solutions, employees must have access to relevant tools that provide them with in-depth insights into internal and external contexts. Even the most innovative thinker will struggle to fully capitalise on their problem solving skills without the right resources to support them.

Of course, the nature of these resources will depend on the employee’s role and the context in which they work. Resources may include software, subscriptions, technological equipment and specific communication channels. For all of their differences, these resources will ideally assist the employee to integrate root cause analysis into day-to-day processes.

Provide training

Despite common misconception, problem solving skills are not necessarily innate. Rather, analytical and creative thinking skills can be fostered through purposeful training that provides individuals with a toolkit of problem solving techniques. It also offers an open space for employees to build on existing skill sets through hypothetical scenarios that will test their ability to extempromise, communicate proactively and think creatively.

Start building problem solving skills today

All businesses have the power to create proficient problem solvers within their existing and future workforce. Contact our team today to find out how a bespoke DeakinCo. learning solution could help your employees build on their problem solving skill sets through purposeful, relevant training.

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Problem Solving And Decision Making Process - Benefits, Steps, & Skills

Written By : Bakkah

15 Jan 2024

Table of Content

What is the decision-making process? 

What is the Problem-Solving process? 

Benefits of Decision making & Problem-solving 

What are Decision-making skills? 

What are problem-solving skills? 

Decision-making Process: 

Problem-Solving Step in the Process:

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An international crisis, global pandemic or even adopting new technology all these occurrences may wreck the organizational structure a bit. That’s why it is important to improve decision-making and problem-solving skills in case we found ourselves before such challenging matters.  

Every member of the company, at some point, is asked to decide on something or maybe solve a problem. However, higher authority has a hard time trying to sort out humongous matters incorporation with HR management to make sure that the decisions are all aligned. 

Let us introduce you to some skills, steps, and the benefits of developing your decision-making and problem-solving strategy. 

What is the decision-making process?  

A decision-making process is a set of processes done by a person to choose the best alternative or course of decision-making activities for them.

It is a collection of measures conducted by managers in a firm to define the planned course for business initiatives and to put actions in motion.

What is the Problem-Solving process?  

The problem-solving process is the process of observing the organization’s atmosphere as a whole to spot any irritating matters and to figure out why such problems occurred in the first place, to examine the possibility of improvement or change, in order to develop alternatives of problem-solving activities which can help with the decision-making process. 

Benefits of Decision making & Problem-solving  

Problem-solving & decision-making are essential talents. They can assist you with several circumstances that may arise at work.

The talents may be used in conjunction with one another to tackle many of the same problems. Here are some benefits of using decision making and problem-solving skills in your organization: 

Saving time and making better use of resources:  

Planning things ahead spare you so much trouble and make it easy for you to go back and spot the error and handle it. 

It is the same with the two skills in hand, they both require thorough planning to make sure time is used efficiently and resources are exploited perfectly. 

Easy Delegation Process: 

If you approach decisions as a single jumbled step, your only options are to accomplish everything yourself or to chuck the assignment over the wall and pray for the best.

It is much easier to assign work and schedule check-ins at suitable stages if all stakeholders have shared process clarity on the phases of making choices. 

People will accomplish things faster: 

it is easier to set clear goals, have flexible timelines, and prepare the resources needed. This way your people will only occupy themselves with work and try to finish things as well as possible. 

Prevention of quarrels:  

When a manager is insufficiently forceful and leaves too many decisions to the workers, it can lead to workplace conflict.

A situation in which employees are unsure of the way they are being led might result in an overabundance of players attempting to take command.

Improve your decision-making abilities and show them the way to avoid your colleagues arguing over how to complete a project or which proposal is superior for your team!   

Sometimes you don’t even sense that your organization has experienced a downfall, and this is thanks to a clever implementation of detailed problem-solving followed by a decision-making process.

Decision-making Process:  

Identify the problem: .

Whether you're tackling a complex problem or a relatively simple one, it's vital that you have a clear understanding of what it is that you're hoping to solve. 

If you're trying to tackle several problems (even if they're relatively simple) the task becomes much harder. 

Do your research: 

You'll want to undertake some fact-finding and investigation once you've defined the problem you're trying to solve.

This might entail investigating the causes of previous problems that were successfully remedied. It may be necessary to create interview questions to ask persons engaged in the situation. 

Look for possible solutions: 

It's time to start thinking about possible remedies after you've done your study on the issue. This step necessitates creativity and brainstorming as you come up with a few excellent ideas. 

As well as some backup plans in case the initial set fails. Creating contingency plans to prevent more difficulties is a common part of problem solving. 

Make a decision: 

Once you've compiled a list of potential solutions, work your way down the list to the best option. If you're working in a group, attempt to make decisions collectively and come up with a solution that everyone agrees on. 

Put that decision into action: 

Implement your selected solution in a methodical manner. Avoid acting too quickly, since this will almost always result in a shoddy solution that fails to accomplish the desired outcome. 

Await results: 

Examine how well your solution is functioning and decide whether you need to take any more steps. Before you follow up and decide whether to adjust your strategy, it's ideal to set a time for observation. 

Even though Decision making and Problem-solving processes might be similar in some steps, it is important to know the steps of Problem solving process as well. 

Define the problem : 

you’ll have to identify the issue, understand how it came to existence, and see if there’s enough data to start working with. 

Clarify the problem

Clarify the problem are you aware of everything related to it? Or do you need more information? You need to know if this was a priority to fix now, or it can simply wait while handling other more important issues. 

Define the goals :

in this step, you’ll have a fixed goal that you aim to achieve after solving this problem. Fixing a clear timeline would encourage working faster and harder to solve the problem. 

Identify the roots & the major causes of the inconvenience :

A problem doesn’t occur out of thin air, there must be a reason, and for you to get rid of this problem once and for all, you need to extract the reason. 

• Develop an action plan:

Make a list of the steps that must be taken to treat the core cause & prevent the problem from spreading to others. 

Each activity should have an owner and a deadline. Finally, actions should be tracked to verify that they are completed. 

Execute action plan :

now that you’ve had your list of steps, put it into motion! Just make sure everything is crossed out of your action plan. 

Evaluate the results :

Match the results you got with the goals you set in earlier steps. Check if there were any unpredictable consequences. If your goals weren’t achieved, then the problem isn’t solved yet, meaning you must start all over again. 

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Problem solving and decision making

 "This has shown increasing demand as employers are acknowledging that graduates are expected to think for themselves and perhaps find different ways of working and thinking creatively"

Carl Gilleard, Former Chief Executive, Association of Graduate Recruiters

How to be an effective problem solver

We all use our initiative and creativity to solve problems every day. For example, you might have to change your route due to traffic congestion, solve an IT issue, or work out what to make for dinner with the ingredients left in the fridge. The challenges you may face in your professional career are likely to be a bit more complicated than these examples, however the skills and processes you use to come up with solutions are largely the same, as they rely on your ability to analyse a situation and decide on a course of action.

Problem solving and decision making  are likely to be essential aspects of a graduate-level job, so it is important to show a recruiter that you have the personal resilience and the right skills to see problems as challenges, make the right choices and learn and develop from your experiences.

You are likely to have to apply techniques of problem solving on a daily basis in a range of working situations, for example:

• using your degree subject knowledge to resolve technical or practical issues
• diagnosing and rectifying obstacles relating to processes or systems
• thinking of new or different ways of doing your job
• dealing with emergencies involving systems or people.

You may have to use a logical, methodical approach in some circumstances, or be prepared to use creativity or lateral thinking in others; you will need to be able to draw on your academic or subject knowledge to identify solutions of a practical or technical nature; you will need to use other skills such as communication and planning and organising to influence change.

Whatever issue you are faced with, some steps are fundamental:

I - Identify the problem

D - Define the problem

E - Examine alternatives

A - Act on a plan

L - Look at the consequences

This is the  IDEAL  model of problem-solving. There are other, more complex methods, but the steps are broadly similar.

What do recruiters want?

Problem solving, decision making and initiative can be asked for in a variety of ways. Many adverts will simply ask for candidates who can “ take the initiative to get a job done " or " have the ability to resolve problems "; others, however, may not make it so obvious. Phrases such as those below also indicate that initiative and problem solving are key requirements of the role:

• “We need people who can set goals and surpass them; people who have ideas, flexibility, imagination and resilience…”
• “Take responsibility and like to use their initiative; Have the confidence and the credibility to challenge and come up with new ways of working…”
•  “An enquiring mind and the ability to understand and solve complex challenges are necessary…”
• “We are looking for fresh, innovative minds and creative spirits...”
• “Ambitious graduates who can respond with pace and energy to every issue they face…”

These quotations are all taken from graduate job adverts and they are all asking for more or less the same two things:

• The ability to use your own initiative, to think for yourself, to be creative and pro-active.
• The ability to resolve problems, to think logically or laterally, to use ingenuity to overcome difficulties and to research and implement solutions.

These are important skills which recruiters look for. They want staff who will take the personal responsibility to make sure targets are met; who can see that there might be a better way of doing something and are prepared to research and implement change; who react positively, not negatively, when things go wrong.

Gaining and developing problem solving and decision making skills

Below are some examples of how you may already have gained decision making and problem solving skills at the University of Bradford and beyond. There may also be some useful suggestions here if you are looking to develop your skills further:

• dissertation - researching and analysing a specific issue and providing recommendations
• group projects  - overcoming challenges e.g. a change of circumstances, technical problems, etc.
• part-time jobs, internships and work experience*  - dealing with challenging customers, identifying and solving issues in your role, completing projects, etc.
• organising events - deciding on date, venue, marketing; solving logistical issues, etc.
• travel -  organising trips, planning and reacting to change, etc.
• enter competitions - to   provide a solution to a challenge.

*Using your initiative in a work context is about spotting opportunities to develop the business. This can, for example, include learning new technology to make your work more productive and efficient; being willing to look at processes and systems to see if there are things you can suggest to improve workflow; recognising opportunities that will improve the business and being prepared to follow them through; volunteering to learn new tasks so you can be adaptable and help out in emergencies or at peak periods.

How can you prove to a recruiter that you have these skills?

Think of examples of when you have used these skills. See the above section for suggestions, and then to provide a full and satisfying answer you can structure it using the STAR technique:

• S - Define the Situation
• T - Identify the Task
• A - Describe your Action
• R - Explain the Result

Here is a detailed example:

Define the SITUATION:  (where were you? what was your role? what was the context?) 

I work shifts at a call centre which manages orders for several online companies. One evening I had to deal with a very irate customer who had been promised a delivery a week ago and had still not received it. 

Identify the TASK:  (what was the problem? what was your aim? what had to be achieved?) 

Whilst listening to the customer, I accessed his record. This was no help in solving the problem as it simply reiterated what the customer was saying and did not give any more up-to-date information. I promised the customer that I would do my best to help but I would need to do some research and phone him back. He reluctantly accepted this.

Describe the ACTION you took:  (be clear about what you did) 

I could not check with the office as they were closed and my supervisor had already left for the evening, so I searched for the same product code to see if I could find updated information on other records.  This confirmed that the product was now back in stock and that several deliveries were actually scheduled for the following day. There seemed to have been an error which had resulted in my customer’s record not being updated, so I reserved the item for this customer and then persuaded the Logistics Manager to include him in the schedule.

Highlight the RESULT you achieved:  (what was the outcome? Be specific and, if possible, quantify the benefits)

My shift was over but I telephoned him back and explained what I had done and hoped very much that it was convenient for him to accept delivery the following day. He was delighted with the initiative I had taken and thanked me. Two days later my supervisor told me that I had received excellent feedback from a customer and I would be nominated for Employee of the Month.

To use the STAR technique effectively, remember:

• You are the STAR of the story, so focus on your own actions.
• Tell a story and capture the interest of the reader. Include relevant details but don’t waffle.
• Move from the situation, to the task, to your actions, and finally to the result with a consistent, conversational approach.

A detailed statement like this can be used in online applications, or used at interview. It is also easy to adapt it for use in your CV, for example:

• My work experience at the call centre required me to develop good problem solving skills when dealing with difficult customers with stock and delivery issues.
• I have good customer service skills developed through resolving problems relating to stock and deliveries whilst working for a call centre.

Adapting your examples

The example above, for instance, could easily be altered to prove your  communication skills , show that you can  adapt and be flexible , and that you have great  customer service skills .  It is worthwhile spending time writing statements like this about all your experiences and then adapting them to match each recruiters’ specific requirements.

Related key words / skills

•  Leadership
• Analytical and logical thinking
• Recommending
• Creative thinking
•  Adaptability and flexibility
• Time management
• Researching
• Applying knowledge

Practical help

We run regular  workshops on employability skills , and you can book an appointment with one of our advisers to discuss how to improve your employability in relation to your career choices.

Further reading

More articles:

• Problem Solving defined on Skills You Need
• Mind Tools on Problem Solving Techniques
• Problem solving: the mark of an independent employee (via TARGETjobs)
• Problem Solving and Decision Making processes via businessballs.com

You can also check out our Assessement Centre and Psychometric Tests pages for details of the problem-solving exercises recruiters use in their selection processes.

Other relevant websites with general information on skills are:

• Prospects  – features articles on skills and how to evidence them.
• TARGETjobs  – has details on essential skills and competencies.

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• Career Planning
• Skills Development

Important Decision-Making Skills That Employers Value

What Are Decision-Making Skills?

The decision-making process, types of decision-making skills.

• Problem-Solving

Collaborative

Emotional intelligence, logical reasoning, more decision-making skills.

• Examples of Decision-Making Skills

Different employers look for different things, of course, but decision-making skills are sought by virtually all companies. That's because all employees are faced with decisions in the workplace, big and small, every day.

In general, applicants who can demonstrate an ability to  identify all the options  and compare them in terms of both cost and effectiveness have an advantage over those who can’t.

Whether it's a question of deciding which candidate to hire, which consultant to use, or what business plan to execute, having the capacity to make the best decision is critical for organizations.  Organizational culture  and  leadership style  together determine the process of decision-making in any company.

Some companies may use a consensus-based approach, while others depend on a manager or management group to make all major decisions for the company.

Many organizations use a mixture of centralized and consensus-based styles. How an individual employee participates in the decision-making process depends on his or her position within the overall structure of the company.

A good way to make the most informed decision is to follow a process that assures you are taking into account all relevant information and considering each of the most probable outcomes. A step-by-step checklist like this is valuable for that purpose:

• Define the problem, challenge, or opportunity.
• Generate an array of possible solutions or responses.
• Evaluate the costs and benefits, or pros and cons, associated with each option.
• Select a solution or response.
• Implement the option chosen.
• Assess the impact of the decision and modify the course of action as needed.

You will not always find yourself going through all six steps in an obvious way. You might be responsible for one aspect of the process but not the others, or several steps might be merged, but someone still should be going through each step in one way or another. Skipping steps usually leads to poor outcomes.

Remember to develop strategies to ensure that you have not overlooked important information or misunderstood the situation, and be sure to uncover and correct for any biases you may have.

Even if you do not yet have management experience, you probably have made decisions in a professional setting. Because decision-making is not always a cut-and-dried process, though, you might not have recognized what you were doing.

These examples provide a sense of what activities from your  own work history  you can share with potential employers to demonstrate your decision-making skills. Be sure to keep your sharing as relevant to the  requirements for the position  as possible.

Finding the best solution when faced with a problem is of utmost importance, and taking a measured approach will help you get there. Having the ability to  problem-solve  thoughtfully and logically while incorporating different perspectives is essential. Leaving your emotions at the door also allows you to look at the problem from every angle. Regardless of your field, you will be faced with many problems. Those of us who don’t let this fact overwhelm us will thrive in our chosen careers.

• Active Listening
• Benchmark Development
• Brainstorming
• Causal Analysis
• Collaboration
• Creative Thinking
• Data Analysis
• Data Gathering
• Fact-Finding
• Forecasting
• Historical Analysis
• Needs Identification
• Prioritizing
• Process Analysis
• Project Implementation
• Project Management
• Project Planning
• Test Development
• Time Management

There are going to be times when you will need the input of others to come to a decision. You will need to recognize when decisions need  collaboration  and then foster team meetings to come to the best decision. Being able to communicate your goals clearly and welcome feedback are central to a collaborative environment.

• Authenticity
• Asking for Feedback
• Clear Communication
• Compromising
• Embracing Differences
• Honest Feedback
• Knowledge Sharing
• Processing Ideas
• Setting Expectations
• Team-Building Activities
• Team Player

Having high emotional intelligence means that you are aware of and in control of your emotionsand that you can express them in a healthy, measured manner. It is important to not let your emotions take over when coming to an informed decision. When you are working with others to come to a decision central to the decision-making process, it's especially important to control your emotions so you can effectively convey your opinions.

• Interpersonal
• Self-Awareness
• Self-Regulation
• Social Skills

In order to come to an  informed decision , you will need to look at all the facts presented to you. This is where logic comes in. Weighing all the advantages and disadvantages of your actions is at the core of every measured decision. Your emotions will need to take a back seat in order for you to avoid compromising your rational decision-making. For example, if a colleague with whom you have a close working relationship has been accused of harassing another employee, it is imperative that you remove your emotions in order to move forward fairly.

• Cost Analysis
• Critical Thinking
• Data-Driven
• Deductive Reasoning
• Emotional Regulation
• Evidence-Based
• Independent Thinking
• Information Gathering
• Managing Emotions
• Reflective Learning
• Risk Assessment
• Scientific Analysis
• Self-Control
• Conducting Polls
• Consensus Building
• Follow-Through
• Identifying Problems
• Lateral Thinking
• Organization
• Technological Expertise
• Strong Leadership
• Team Management
• Troubleshooting

Examples of Workplace Decision-Making Skills

• Identifying a faulty machine as the source of disruptions in the production process.
• Facilitating a brainstorming session to generate possible names for a new product.
• Polling staff to gauge the impact of extending retail hours.
• Conducting a comparative analysis of proposals from three advertising agencies and selecting the best firm to lead a campaign.
• Soliciting input from staff members on an issue important to the company’s future.
• Surveying customers to evaluate the impact of a change in pricing policy.
• Implementing the shutdown of a designated plant with excess manufacturing capacity.
• Generating a list of options for a new regional sales territory.
• Evaluating the impact of several possible cost-cutting measures.
• Comparing the leadership potential of different team members and choosing a project manager.
• Researching possible legal or logistical problems associated with a new company policy.
• Brainstorming possible themes for a fundraising campaign.
• Analyzing data from focus groups to help select packaging for a new product.
• Comparing the strengths and weaknesses of three potential vendors for processing payroll.

Remember that the critical skill in decision-making is not learning techniques, but knowing how and when to apply the basic principles and constantly reevaluating and improving your methods. If you or the teams you are a part of consistently achieve good results, then you are making decisions well.

How to Make Your Skills Stand Out

ADD YOUR MOST RELEVANT SKILLS TO YOUR RESUME: When you're applying for a leadership role, be sure to include examples of your accomplishments in your resume.

HIGHLIGHT YOUR SKILLS IN YOUR COVER LETTER: Use your cover letter to show the hiring manager that  you're a strong match for the job  by mentioning how your qualifications fit the job requirements.

USE SKILL WORDS DURING JOB INTERVIEWS: Even if you do not yet have management experience, you probably have made decisions in a professional setting. Use examples of these during interviews.

More From Forbes

The power of critical thinking: enhancing decision-making and problem-solving.

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Dr. Ron Young, Founder and Board Chair of Trove, Inc . Ron specializes in psychological coaching & transition consulting.

Critical thinking is a fundamental cognitive process that enables individuals to objectively analyze, evaluate and interpret information to make informed decisions and solve complex problems. It involves employing reasoning and logic, questioning assumptions, recognizing biases and considering multiple perspectives. It requires self-monitored, self-directed, self-disciplined and self-corrective thinking. Critical thinking is essential in a world of information and diverse opinions. It helps us see things more clearly and avoid being misled or deceived.

Importance Of Critical Thinking

Critical thinking is crucial in various aspects of life, including education, professional endeavors and personal decision-making. In academic settings, it allows students to comprehend and engage with complex subjects while discerning valid arguments from fallacious ones. In the workplace, critical thinking empowers individuals to analyze problems, devise creative solutions and make informed judgments. In everyday life, it helps individuals navigate an increasingly complex world by making sound choices and avoiding cognitive biases. It is our primary defense against misleading or "spun" information.

Benefits Of Critical Thinking

There are many benefits of critical thinking.

Enhanced Decision-Making

Critical thinking helps us trust our gut feelings and think independently. It enables individuals to make logical and well-reasoned decisions based on evidence and objective analysis. It encourages the consideration of all relevant factors and the evaluation of potential consequences, leading to more informed choices.

Best High-Yield Savings Accounts Of 2024

Best 5% interest savings accounts of 2024, effective problem-solving.

Critical thinking facilitates the identification of underlying issues, the generation of innovative solutions and the evaluation of their viability. It encourages individuals to approach problems from different angles and consider various perspectives, increasing the likelihood of finding effective resolutions.

Reduction Of Cognitive Biases

Critical thinking supports self-reflection. It helps individuals recognize and challenge cognitive biases that hinder clear judgment. Individuals can better overcome confirmation bias, groupthink and the availability heuristic (judging the likelihood of an event based on recall of similar events) by understanding and questioning their assumptions and beliefs. It requires a commitment to overcoming the tendency to see the world from a narrow, self-centered perspective.

Enhanced Communication Skills

Practicing critical thinking fosters effective communication by enabling individuals to articulate and defend their ideas with logical reasoning and evidence. It encourages active listening, empathy and the ability to evaluate and respond to counterarguments, leading to more constructive and meaningful discussions.

More United Citizens

Using critical thinking enables citizens to see the whole picture by better protecting against biases and propaganda. It reduces partisanship and a “we/they” mentality.

Cultivating Critical Thinking

How can you cultivate critical thinking?

Be curious and inquisitive.

Foster a mindset of curiosity and an eagerness to explore and understand the world. Talk with people from different backgrounds, cultures, political affiliations or religions. Ask probing questions, seek new perspectives and engage in active learning. Learn from people who hold different viewpoints.

Develop analytical skills.

You can do this by learning to break down complex problems into manageable parts, recognize patterns and identify cause-and-effect relationships. Remember, not all opinions are equal, and some are flat-out wrong.

Evaluate information.

Develop skills to evaluate the credibility and reliability of information sources. Be aware of bias, assess evidence and differentiate between fact and opinion. Guard against "swallowing information whole" or believing that "If it's on the internet, it must be true."

Practice reflection.

Engage in reflective thinking by evaluating your thoughts, beliefs and assumptions. Consider alternative viewpoints, and be open to changing your perspective based on new information.

Embrace intellectual humility.

Be humble and aware that you could be wrong. Knowledge is an ongoing process; be open to admitting mistakes or gaps in understanding. Embrace a growth mindset that values continuous learning and improvement.

Develop your sense of belonging.

The third tier in Maslow's hierarchy of needs is a sense of belonging. One aspect of belonging is connection. All humans have this need. Without critical thinking, we are vulnerable to making our group's beliefs our own rather than evaluating which beliefs align with our values.

Align your view and your values.

Rather than defining yourself by a particular view, ask whether a different view aligns with your values. When we identify ourselves by the beliefs of our reference group (religious, political, etc.), we look for ways to justify our ideas. In doing so, we deny ourselves access to critical thinking.

Evidence Of Critical Thinking

When you practice critical thinking, it will be evident in several areas:

Evidence-Based Decision-Making

Rely on facts rather than emotions or personal biases. Follow five distinct steps, called the five A’s : ask, access, appraise, apply and audit. Gather relevant information, evaluate the evidence objectively and consider different perspectives before making decisions. Then reevaluate them as you learn new information.

Problem-Solving

Approach problems systematically by defining the issue, gathering relevant data, brainstorming potential solutions and evaluating feasibility. Engage in collaborative problem-solving to benefit from diverse perspectives. Open-mindedly consider alternative systems of thought. Recognize assumptions, implications and practical consequences, then adjust as needed.

Effective Communication

Solve complex problems by clearly and effectively communicating with others. Utilize critical thinking skills to articulate your thoughts clearly, listen actively and engage in respectful and constructive dialogue. Challenge ideas through logical arguments and evidence rather than resorting to personal attacks. Respecting people with different views does not mean you agree with their opinions. Evaluate, formulate and communicate questions with clarity and precision.

Continuous Learning

Apply critical thinking to ongoing personal and professional development. Seek opportunities for further education, engage in intellectual discourse and actively challenge your beliefs and assumptions.

Using Critical Thinking

Critical thinking is a powerful cognitive tool that empowers individuals to navigate the complexities of the modern world. Critical thinking enhances decision-making, problem-solving and communication abilities by fostering logical reasoning, analytical skills and an open mindset. It enables individuals to overcome cognitive biases, evaluate information effectively and make informed choices. Cultivating and applying critical thinking skills benefits individuals and contributes to a more thoughtful and rational society. Embracing critical thinking is essential for fostering intellectual growth, facilitating progress and addressing the challenges of the 21st century.

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Decision-Making & Its Importance in Problem-Solving

Life is all about making decisions. From getting out of bed in the morning until you call it a day,…

Life is all about making decisions. From getting out of bed in the morning until you call it a day, we are constantly making choices and making decisions.

Whether it is your personal or professional life, you are often defined by your decisions.

Some of your decisions are mundane and almost automatic such as brushing your teeth and taking a bath, while some tasks require minor decision-making such as planning your daily schedule.

However, in a professional environment, decision-making skills can make all the difference as they can determine your growth and future career development. Depending on your role in an organization, your decisions can also impact other employees and even the overall image of the business.

When it comes to challenges and taking critical decisions, a lot of people shy away from taking responsibility. However, people with a decisive approach and a knack for taking well-measured and well-timed decisions are automatically regarded as leaders.

By honing your decision-making skills, you can create a strong bond with your colleagues and create a harmonious environment around you.

What is Decision-Making?

If we have to define decision-making in the context of the workplace, it is safe to say that management is nothing but a continuous process of decision-making. It is the responsibility of business managers to make operational decisions and ensure that their teams execute the tasks. In fact, the success of every manager depends largely on her decision-making skills.

The process of business planning depends on the art of decision-making. During the planning stage, managers need to make various decisions such as setting organizational goals. They decide on key products, marketing strategies, role assignments and timelines for every task.

In situations where the plans don’t deliver the desired outcome or are derailed due to external issues or lack of performance, it is the managers who need to bring things back on track by taking contingency decisions.

The charting of business plans is in effect great evidence of the importance of decision making. The care and research put in before taking a decision shape the impact it will make. Managers decide individual targets, team goals and various other rules and regulations related to the team’s functioning and conflict resolution, wherever needed.

Importance of decision-making

Iconic 20th-century management guru Peter F. Drucker said once, “Whatever a manager does, he does through making decisions.” That is exactly what we are talking about here.

It doesn’t matter whether you are working in a small company with less than 10 employees or in a large enterprise that has thousands of employees, things and situations always change. Over time, old practices, rules and personnel make space for new processes, especially in uncertain situations. However, these changed situations need people to make decisions.

The meaning of decision-making is strongly connected with management roles. Whether you create plans or organize discussions, give orders or advice, approve plans or reject them, every action involves decision-making. Thus, it can be considered an essential function of management.

If you work in a highly profitable enterprise, you will need to make a lot of critical decisions such as pricing a product, deciding which products to market, controlling production costs, advertising, capital investments, creating a policy for dividends and taking care of employee issues, among others.

Such decisions also need to be taken even by managers in government or social service enterprises where profit is not the criterion of success.

Decision-making and its importance in problem-solving

The importance of decision making lies in the way it helps you in choosing between various options. Before making a decision, there is a need to gather all available information and to weigh its pros and cons. It is crucial to focus on steps that can help in taking the right decisions.

There is a strong correlation between decision-making and problem-solving.

To further understand the importance of decision-making skills, let us take a look at the various ways in which decision-making can help solve problems:

Step-wise approach:.

Decision-making is not a random process. Before taking crucial decisions that can have a long-term impact on individual as well as organizational goals and performance, it is important to avoid various challenges.

Many times, we tend to get influenced by the majority opinion. Even if you feel that the group is not moving towards the right decision, you are scared of voicing your opinion due to the fear of isolation.

A systematic decision process ensures such erroneous situations are avoided.

Impact analysis:

By using the correct approaches and ethical decision-making processes, we can evaluate the impact of different choices. For instance, it is important to know whether a decision is long-term or temporary. We can assess the impact that a decision might have on people in the organization and whether they will feel happy about it or not.

Finding decision alternatives:

The decision-making process brings to fore skills such as probing and creativity. By using probing skills, you can gather more information about the various alternatives and creativity can help you in finding options that were previously not known.

Future forecasting:

The importance of decision making is amply seen in its ability to allow future forecasting. When we make a decision through a systematic process, we can calculate the likely impact of the decision on a business’s future growth.

Evaluating various options:

One of the characteristics of decision-making is that it is a fact-based process. Before making a decision, we gather all information about the various options and evaluate their feasibility and impact on the company’s present and future scenarios. This gives us the ability to make ethical decisions that are generally also the right decisions.

Risk assessment:

Strong decision-making skills are crucial in the risk assessment of decisions. They give us the ability to not only take the various options into account and weigh their pros and cons but also to assess the risk. By thoroughly evaluating all the options, market scenarios and past data, we can anticipate the chances of success and prepare for worst-case scenarios. Such a risk analysis comes handy for contingency planning as well as during any course corrections.

Impact on human resources:

Good decision-making can reap rich benefits for the organization. It can help foster a collaborative work environment and create clarity of communication among various stakeholders. By adopting group decision-making processes, it is possible to make different team members understand each other’s perspectives, strengths and weaknesses.

Leadership and emotional management:

Strong decision-making helps solve problems promptly and creates a leadership position for the decision-makers. Strong decisions should be impartial and devoid of any emotional influences that might make us overlook shortcomings. Such decision-making should also be transparent and logical.

These aspects of decision-making reduce stress and friction and increase cohesiveness as well as mutual understanding among team members and respect for the leaders.

Our daily life decisions give us opportunities to become better at what we do. Most of our decisions are made out of habit. However, by bringing our choices in the conscious domain, we can evaluate them, assess their impact and indulge in self-reflection. Such steps eventually lead to better decisions and outcomes.

Hence, it is very important to learn what is decision-making, and Harappa Education’s Making Decisions specially-curated course helps you learn the techniques of ethical decision-making. It has a section on the good decision process which will help you remove obstacles such as biases, peer pressure and lack of clarity that come in the path of good decision-making. Sign up for the course and start making smart decisions for success.

Explore our Harappa Diaries section to know more about the topic related to the Solve habit  –  Ethical Decision Making  in order to develop your  problem solving and decision making  skills.

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7 Ways to Improve Your Ethical Decision-Making

• 03 Aug 2023

Effective decision-making is the cornerstone of any thriving business. According to a survey of 760 companies cited in the Harvard Business Review , decision effectiveness and financial results correlated at a 95 percent confidence level across countries, industries, and organization sizes.

Yet, making ethical decisions can be difficult in the workplace and often requires dealing with ambiguous situations.

If you want to become a more effective leader , here’s an overview of why ethical decision-making is important in business and how to be better at it.

Access your free e-book today.

The Importance of Ethical Decision-Making

Any management position involves decision-making .

“Even with formal systems in place, managers have a great deal of discretion in making decisions that affect employees,” says Harvard Business School Professor Nien-hê Hsieh in the online course Leadership, Ethics, and Corporate Accountability . “This is because many of the activities companies need to carry out are too complex to specify in advance.”

This is where ethical decision-making comes in. As a leader, your decisions influence your company’s culture, employees’ motivation and productivity, and business processes’ effectiveness.

It also impacts your organization’s reputation—in terms of how customers, partners, investors, and prospective employees perceive it—and long-term success.

With such a large portion of your company’s performance relying on your guidance, here are seven ways to improve your ethical decision-making.

1. Gain Clarity Around Personal Commitments

You may be familiar with the saying, “Know thyself.” The first step to including ethics in your decision-making process is defining your personal commitments.

To gain clarity around those, Hsieh recommends asking:

• What’s core to my identity? How do I perceive myself?
• What lines or boundaries will I not cross?
• What kind of life do I want to live?
• What type of leader do I want to be?

Once you better understand your core beliefs, values, and ideals, it’s easier to commit to ethical guidelines in the workplace. If you get stuck when making challenging decisions, revisit those questions for guidance.

2. Overcome Biases

A bias is a systematic, often unconscious inclination toward a belief, opinion, perspective, or decision. It influences how you perceive and interpret information, make judgments, and behave.

Bias is often based on:

• Personal experience
• Cultural background
• Social conditioning
• Individual preference

It exists in the workplace as well.

“Most of the time, people try to act fairly, but personal beliefs or attitudes—both conscious and subconscious—affect our ability to do so,” Hsieh says in Leadership, Ethics, and Corporate Accountability .

There are two types of bias:

• Explicit: A bias you’re aware of, such as ageism.
• Implicit: A bias that operates outside your awareness, such as cultural conditioning.

Whether explicit or implicit, you must overcome bias to make ethical, fair decisions.

Related: How to Overcome Stereotypes in Your Organization

3. Reflect on Past Decisions

The next step is reflecting on previous decisions.

“By understanding different kinds of bias and how they can show themselves in the workplace, we can reflect on past decisions, experiences, and emotions to help identify problem areas,” Hsieh says in the course.

Reflect on your decisions’ processes and the outcomes. Were they favorable? What would you do differently? Did bias affect them?

Through analyzing prior experiences, you can learn lessons that help guide your ethical decision-making.

4. Be Compassionate

Decisions requiring an ethical lens are often difficult, such as terminating an employee.

“Termination decisions are some of the hardest that managers will ever have to make,” Hsieh says in Leadership, Ethics, and Corporate Accountability . “These decisions affect real people with whom we often work every day and who are likely to depend on their job for their livelihood.”

Such decisions require a compassionate approach. Try imagining yourself in the other person’s shoes, and think about what you would want to hear. Doing so allows you to approach decision-making with more empathy.

5. Focus on Fairness

Being “fair” in the workplace is often ambiguous, but it’s vital to ethical decision-making.

“Fairness is not only an ethical response to power asymmetries in the work environment,” Hsieh says in Leadership, Ethics, and Corporate Accountability . “Fairness–and having a successful organizational culture–can benefit the organization economically and legally as well.”

It’s particularly important to consider fairness in the context of your employees. According to Leadership, Ethics, and Corporate Accountability , operationalizing fairness in employment relationships requires:

• Legitimate expectations: Expectations stemming from a promise or regular practice that employees can anticipate and rely on.
• Procedural fairness: Concern with whether decisions are made and carried out impartially, consistently, and transparently.
• Distributive fairness: The fair allocation of opportunities, benefits, and burdens based on employees’ efforts or contributions.

Keeping these aspects of fairness in mind can be the difference between a harmonious team and an employment lawsuit. When in doubt, ask yourself: “If I or someone I loved was at the receiving end of this decision, what would I consider ‘fair’?”

6. Take an Individualized Approach

Not every employee is the same. Your relationships with team members, managers, and organizational leaders differ based on factors like context and personality types.

“Given the personal nature of employment relationships, your judgment and actions in these areas will often require adjustment according to each specific situation,” Hsieh explains in Leadership, Ethics, and Corporate Accountability .

One way to achieve this is by tailoring your decision-making based on employees’ values and beliefs. For example, if a colleague expresses concerns about a project’s environmental impact, explore eco-friendly approaches that align with their values.

Another way you can customize your ethical decision-making is by accommodating employees’ cultural differences. Doing so can foster a more inclusive work environment and boost your team’s performance .

7. Accept Feedback

Ethical decision-making is susceptible to gray areas and often met with dissent, so it’s critical to be approachable and open to feedback .

The benefits of receiving feedback include:

• Learning from mistakes.
• Having more opportunities to exhibit compassion, fairness, and transparency.
• Identifying blind spots you weren’t aware of.
• Bringing your team into the decision-making process.

While such conversations can be uncomfortable, don’t avoid them. Accepting feedback will not only make you a more effective leader but also help your employees gain a voice in the workplace.

Ethical Decision-Making Is a Continuous Learning Process

Ethical decision-making doesn’t come with right or wrong answers—it’s a continuous learning process.

“There often is no right answer, only imperfect solutions to difficult problems,” Hsieh says. “But even without a single ‘right’ answer, making thoughtful, ethical decisions can make a major difference in the lives of your employees and colleagues.”

By taking an online course, such as Leadership, Ethics, and Corporate Accountability , you can develop the frameworks and tools to make effective decisions that benefit all aspects of your business.

Ready to improve your ethical decision-making? Enroll in Leadership, Ethics, and Corporate Accountability —one of our online leadership and management courses —and download our free e-book on how to become a more effective leader.

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