How Can You Test the Validity of Your Decisions? Learn the Key Steps to Continuous Improvement!
Decision-making is inherently risky, and even the best decisions are subject to change and scrutiny over time. According to Peter Drucker, effective decision makers need to constantly test their decisions against the actual course of events. This continuous feedback loop allows them to adjust, refine, or completely overhaul decisions based on real-world outcomes.
Feedback must be built into the decision-making process from the start. By continuously measuring outcomes and testing underlying assumptions, decision-makers ensure that their choices remain relevant and effective. Without this ongoing evaluation, even the most carefully thought-out decisions can quickly become outdated or ineffective.
Other Steps to Decide, Solve Problems
Key Idea #1: Build Organized Feedback into Every Decision
Feedback is the lifeblood of decision refinement. To ensure decisions are effective, structured feedback mechanisms—such as reports, figures, and performance data—need to be built into the process from the outset. These feedback tools provide decision-makers with the information they need to track outcomes and gauge the success of their choices.
An analogy for this is navigating with a GPS. As you move towards your destination (the decision), you receive constant feedback on whether you’re on the right path. Without this feedback, you risk getting lost and never arriving at your goal.
Business Example: A company launches a new marketing strategy. To ensure success, they implement feedback mechanisms, such as customer surveys and sales reports, to monitor progress. How could feedback help you track the effectiveness of new strategies in your business?
Personal Development Example: You decide to improve your diet. By regularly tracking your meals and monitoring how you feel, you can adjust your approach based on the results. How could structured feedback help you refine your personal development goals?
Guiding Questions:
- What feedback mechanisms can you build into your decision-making process?
- How will you use this feedback to monitor the success of your decision?
- What specific metrics or reports will help you track progress?
Key Idea #2: Regularly Measure Decisions Against Real-World Events
Decisions must be measured against actual outcomes. As events unfold, decision-makers should continually assess whether the decision is achieving the desired outcomes. Did it produce the expected results? Is there a gap between the projected and actual outcomes? Regular measurement helps identify discrepancies and adjust course as needed.
An analogy for this is steering a ship. No matter how well you plot your course, you’ll need to make constant adjustments as weather conditions and currents change. In decision-making, the same principle applies—constant monitoring is essential to stay on course.
Business Example: A company invests in new technology to streamline operations. By tracking performance data post-implementation, they discover the tool isn’t delivering the efficiency gains they expected. How could measuring outcomes lead to more informed decisions in your business?
Personal Development Example: You decide to exercise more to improve your health. By measuring changes in your energy levels and fitness over time, you discover that your routine isn’t yielding the desired benefits. How could you measure real-world results to better guide your personal goals?
Guiding Questions:
- How will you measure the real-world impact of your decision?
- What are the key indicators of success that you need to track?
- What steps can you take if your decision does not produce the desired outcome?
Key Idea #3: Go and Look—Validate Assumptions with Direct Observation
Direct observation is key to validating assumptions. Drucker emphasizes the importance of "going and looking" to test assumptions firsthand. Abstract reports and figures are valuable, but they don’t tell the whole story. Direct exposure to the actual situation provides critical insights that may be missed through reports alone.
A metaphor for this is growing a garden. You can read all the reports about soil quality and weather, but unless you go and look at the plants yourself, you won’t know if they’re truly healthy or if they need more water or sunlight. Similarly, decision-makers need to observe outcomes directly to gain a full understanding of the situation.
Business Example: A company introduces a new customer service protocol. By visiting customer support centers and observing interactions firsthand, executives realize that employees are struggling with the new system. How can direct observation provide deeper insights into the effectiveness of business decisions?
Personal Development Example: You decide to wake up earlier to improve productivity. By directly reflecting on how you feel and how much you accomplish in the morning, you realize that waking up earlier isn’t yielding the results you expected. In what ways could firsthand experience give you better insights into your own decisions?
Guiding Questions:
- How can you observe the effects of your decision firsthand?
- What insights might you gain from direct observation that reports cannot provide?
- How often should you engage in direct observation to stay aligned with reality?
Key Idea #4: Be Ready to Iterate and Adjust
Even the best decisions will need adjustment over time. Drucker reminds us that decisions, no matter how carefully planned, are rarely perfect. Over time, even the most effective decisions may become outdated or ineffective as circumstances change. This is why decision-makers must be willing to revisit their assumptions and make adjustments based on new data or changing conditions.
An analogy for this is software development. After a product is released, bugs and issues often surface that weren’t apparent during development. Regular updates and patches are needed to keep the software functional and relevant. In decision-making, you must be prepared to update your "software" when new challenges arise.
Business Example: A company decides to expand into a new market. Initially, the expansion is successful, but over time, changes in consumer preferences reduce demand. The company must adjust its strategy to stay competitive. How could the willingness to adjust decisions improve long-term business success?
Personal Development Example: You decide to adopt a new study method, but after a few months, you realize that it’s no longer helping you retain information. By adjusting your approach, you find a more effective method. In what ways can flexibility in your decision-making lead to better personal growth?
Guiding Questions:
- How can you build flexibility into your decision-making process?
- What signs might indicate that your decision needs to be adjusted?
- How can you iterate on your decision based on new insights or changing conditions?
Conclusions and Lessons
Effective decision-making requires more than just making a choice. It involves constantly testing and refining that decision against real-world events. By building feedback into the process, directly observing outcomes, and being willing to iterate, decision-makers can ensure their choices remain relevant and impactful over time.
Ultimately, decisions are rarely final. Continuous improvement, validation through direct experience, and openness to change are key components in making decisions that stand the test of time. The best decision-makers are those who remain engaged, flexible, and data-driven in their approach.
Similar Methods/Techniques
PDCA (Plan-Do-Check-Act): This is a continuous improvement model where decision-makers plan, implement, check the results, and then act on feedback. This iterative approach ensures ongoing refinement and adjustment of decisions.
Kaizen: A Japanese business philosophy that emphasizes continuous, incremental improvement in all functions. By regularly reviewing processes and making small adjustments, decision-makers can ensure that their strategies remain effective and up-to-date.
