An Everyday Reality for the Self-Employed
One of the most liberating—and terrifying—aspects of being self-employed is how everything comes down to you.
In a typical 9 to 5, your boss makes most of the big decisions for you. There’s minimal pressure to make huge calls that fundamentally alter the course of the business. And if you ever get stuck along the way, you can just consult everyone else on your team for their input.
Working for yourself thrusts you into that decision-making role at the highest level possible.
Ready or not, here those decisions come. Sometimes you have to make multiple calls a day that will have a tremendous impact on your business.
That’s why improving your decision-making abilities is one of the best investments you can make, whether you’re a freelancer, entrepreneur, or solopreneur.
A Framework for Better Decision-Making
Making the occasional bad decision is just part of being human.
With that said, there are plenty of practical strategies you can try to make better decisions more often:
Distance Yourself from the Situation (and Give Advice to a Hypothetical Friend)
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Ever feel like you’d be so much better off… if you could only follow your own advice?
You aren’t alone.1
I can’t tell you how many times I’ve given family and friends logical, sensible tips to help get them through a dilemma.
But what happens when I’m trying to navigate a tough decision on my own? Sometimes that calm, rational approach falls away. I get emotional. It’s harder to see the big picture.
This phenomenon is completely normal. Bottom line: we have a tendency to get too subjective when it’s our own future involved.
With family and friends, it’s easier for us to step back and assess the situation objectively. That leads to rational decisions that usually pay off.
One of the best ways we can improve our own decision-making ability is to pretend. Next time you’re faced with a crucial decision, imagine it’s a friend in your shoes. How would you tell them to move forward?
Talk through the situation out loud. Or write a letter or email discussing which decision to make. This simple step can help you create emotional distance from the situation and see things more rationally.
You don’t even have to go that far. One study found that simply thinking about relationship conflicts from a third-person perspective (“He/she is struggling with this” instead of “I am struggling with this”) led to better reasoning and outcomes.
Give Yourself More Options to Work With
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Often, agonizing over a tough decision feels like you’re living in The Clash song.
“Should I stay or should I go?”
The fork in the path is laid out right in front of you. But the best way forward is unclear.
The problem might not be the situation itself. It might stem from the fact that you aren’t giving yourself enough options about how to handle it.
Resist the temptation to boil down big decisions to binary “A or B” choices. What if there was another way?
Dr. Therese Huston, a psychologist from Carnegie Mellon, gave a great example of this in the IdeaCast from Harvard Business Review:
[L]et’s take a business example. Your company’s thinking about building a parking garage. So instead of just, should we build a parking garage or not, three options would be, should we build a parking garage, should we give all employees bus passes, or should we give our employees the option to work from home one day a week?
See how that works? Introducing a third option opens up more possibilities to move forward. This is in line with our extensive research on project proposals, which found that giving potential clients multiple choices (beyond just hiring you or not) increased revenue by an average of 32 percent.
If you can’t decide between A and B, maybe you need a little C or D. Don’t be afraid to introduce new variables into the equation, as more information and options can lead to better outcomes.
Pay Closer Attention to Your Emotional State When Making Tough Decisions
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One of the most unsettling things about how we make decisions is just how random it can seem.
Something might make all the logical sense in the world, but if we mull it over while we’re tired and cranky, we might make an impulsive decision that leads to a terrible outcome. If you assessed the situation after a good night’s sleep and a meal, the decision (and outcome) would have been completely different.
Try as we might, we are not computers. So much of the decision-making process depends on our emotional state at the time we’re making them.
One study tracked Israeli judges for 10 months as they ruled on prisoners’ applications for parole. The judges were much more likely to grant parole at the beginning of the day, but their rulings became increasingly harsh until after a break for lunch.
Because no one is immune to emotional states, our best bet is to become more aware how we’re feeling when it’s time to make a big decision. If you’re on the verge of making an important decision but are starving and exhausted, do what you can to push it off until you’re in a better emotional state.
Meditation is one the best ways to increase your awareness of the present moment. One study found that just 15 minutes of breath-focused meditation can help us make better decisions by focusing on the information at hand in the present moment.
Tweak Your Environment to Encourage the Right Decisions
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Not knowing what to do is one thing. But knowing what to do and still not being able to do it is even more frustrating.
This happens all the time in life and business. We know we should get up when the alarm clock goes off and head out for a morning run. We know we should stick to our schedule and save time for marketing every day. Why can’t we just do it?
Unfortunately, it’s hard to stay consistent. These little decisions might not seem like a big deal when they go wrong. But the cumulative effect of making them day in and day out has a huge effect on how our lives turn out.
Once you know what the right decisions are, it’s a matter of increasing your chances of making them. Sometimes all it takes is changing the context of how those decisions are presented.
Let’s say you want to lose weight. You could grit your teeth and rely on your willpower to eat fewer calories than before. Or you could serve your meals on a smaller plate. One study found that people who used salad plates instead of dinner plates decreased their calorie intake by 22 percent!
Imagine all the ways you could nudge yourself toward making better decisions in business and in life:
- If you want to run every morning, you could sleep in your athletic clothes and leave your tennis shoes by your bed.
- If you want to wake up and write for an hour, you could leave your document open on your computer and unplug your router the night before.
- If you want to floss more often, you could leave the floss by your toothbrush and toothpaste where you’ll always see it.
The possibilities are endless, whether you’re talking productivity tools or subtle changes to your home office.
Do everything you can to encourage yourself to make the right decisions day in and day out. Even if they don’t seem significant, the effects add up!
Remember the Opportunity Cost
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Remembering the opportunity cost of making decisions allows you to assess the situation in a different light.
Say you spend four dollars on your daily Starbucks run. It doesn’t seem like such a huge deal. But if you frame in the opportunity cost for the entire year ($1460), the perspective shifts. You could buy a new laptop with that kind of money. Or take a nice trip.
It can be super tempting to take on every new idea and client. Just remember that, no matter how smart you are about your time and energy, you still only have limited amounts available. Remember the opportunity costs.
Last but not least, remember that not making a decision is still a decision itself. What are the effects of continuing the status quo?
Define Decision Criteria First
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Making a decision forces you to size up different options.
You can’t “weigh” each option logically, however, without any decision criteria to go on. The process just becomes an instinctual, whatever feels best type of situation.
Your gut instinct is powerful, and it has its place in making minor decisions. But if you’re considering decisions with significant financial and time commitments – expanding your business, hiring new employees, and more – it’s a good idea to pin it down logically with decision criteria.
Start off by identifying the most important thing to your business right now. Money always matters, but look beyond that:
Once you have a list of decision criteria ranked by your current priorities, it’s easier to make decisions.
Say you’re wondering if you should take on a project for less income than you’d like, but it offers the authority and prestige of working with a large corporate client. If your highest priority right now is to build your brand and you aren’t stressed about cash flow, the choice is obvious.
You can reverse engineer this by making a list of pros and cons. When weighing different options, write down all the upsides and downsides. You’ll see patterns emerge; certain items will stand out as more important. Then you can rank your criteria and use them to make other decisions moving forward.
You already work hard on your business. It’s time to work on yourself. Give the tips above a try, and you’ll have the tools you need to make better decisions come crunch time.
And finally, when you do make the inevitable bad decision, don’t beat yourself up. Ask yourself what you’ve learned from the experience and use it as motivation going forward.
Do you struggle with feeling indecisive or making bad decisions? What’s the hardest decision you’ve ever had to make inyour business? Which techniques help you the most? Leave a comment below and let me know!