Elements Steps of Decision Making & How to Solve Problems according to Drucker

In his book Effective Executive, Peter Drucker argues that there are 5 elements or components in order to make effective decisions.

Drucker himself says that this is an old method for deciding, that was used by Aristotle, Galileo and Hypocrites. In essence is similar to the Scientific Method.

 In a previous post we talked about Mistakes in Decision Making. Have a look at them in order to avoid them.

The 5 Steps for Making Effective Decisions 

and Solve Problems

When solving a problem, ultimately one has to chose a solution that is supposed to solve the problem. In other words one makes a decision. So the steps below are applicable.

Step 1 - Define what type of Situation are you dealing with. Drucker says that actually there are 4 types of situations one can encounter:

• Explore them : 4 types of situations in Decision Making and Problem Solving

Step 2 - Define the Specifications and Boundary Conditions.  

1. This is of critical importance because the more clearer the specs the easier it will be for you to choose a product, course of action, etc that will satisfy them. Drucker says that defining and choosing the specifications is done on interpretation and is a risk taking judgement. One would have to think about: 

• Conditions the decision has to satisfy;
• Objectives, Goals it has to attain;
• Specifications to be meet;

• Minimum needed to solve the Problem
• What are the Standards, Criteria, Values to be taken into account.

1. Since we are dealing with a changing and evolving world the Specs that were valid at one point in time might change next year. So knowing your initial specifications or criteria for decision making allows us to know if the decision is still valid or should be replaced given that the conditions have changed.
2. Another important aspect at this point is to consider the interaction between the specification. We should check if the Specifications compatible with each other?

Step 3 - Define what is the Right thing to do. 

• Drucker insists that one should consider and define what is Right before one thinks about what is acceptable or even who is right.
• He gives a biblical example. Solomon wanting to divide a baby in two is the wrong type of compromise while dividing a bread in two is an appropriate type of compromise.

Step 4 - Define the Action Steps - Convert Decision into Actions. 

1. Often enough we are under the impression that we are making a decision when in fact are merely stating an intention. Because if we don't take specific actions towards implementing the decision nothing will happen. 
2. So we should think about about:

• Who should be responsible for what?
• Commitments required to implement the decision;
• Resources available and needed;
• Actions Steps required;
• What is your Role in making decision come to fruition?
• If other people are involved and/or affected by the decision who should be informed;
• Other aspects that will ensure the implementation.

Step 5 - Define a Feedback Procedure.  As I mentioned before we live in a changing world. 

1. Our initial assumptions in making a decision might become obsolete over time;
2. It also might be the case the we are making the wrong assumption to begin with.
3. Therefore Drucker insists that we should make sure to have a feedback procedure built into the decision making to make sure our expectations and assumptions the initial decision are still valid and being meet.
4. One should rethink, update or even make a new decision if after reviewing the feedback one determines that initial conditions have changed, we made invalid assumptions and/or our expectations are being meet by the current decision.

One prerequisite step that I think is required is to check you mindset. These steps work for a person that thinks independently, takes responsibility for his choices.

If on the other hand you are currently in a victim mindset and think that things happen to you without you having much to say in it, others are to blame for current circumstances of your life the these steps will be challenging for you to apply.

I welcome any constructive feedback!