Decision-making is a crucial part of every Product Managers daily job. And there’s a lot of different decisions we face. Some are so easy we barely think about them, but others can really be a challenge, despite how much we rack our brains. To make better decisions you need to first understand what does it mean to be a good decision-maker.
All Articles In This Series:
- Two Key Principles Of Product Management
- How To Make The Best Project Decisions As A Product Manager
- How To Be A Great Product Management Leader?
- Why Is UX So Important For Product Managers?
- Using UX Techniques To Make Better Product Decisions
- The Best Mental Models For Product Managers
- Testing From The Product Manager’s Perspective
- How To Use Deadlines Effectively In Product Management?
- 6 Biggest Myths About Product Development
- A Day In Life Of A Product Manager
What Does It Mean To Be A Good Decision-Maker?
Making good decisions means making them with the right amount of information and making them in a timely manner. To determine how much information your should gather and how quickly you can make the decision, you first need to decide how important the decision is.
Determining The Importance Of A Decision
Deciding how important a decision is will be crucial for your decision-making process. Amazon’s CEO, Jeff Bezos, uses a framework that splits decisions into two types. Type 1 decisions can’t be reversed and Type 2 decisions can easily be taken back. Take a look at this framework:
Placing your specififc decision on this framework will help you determine whther your decision is Type 1, or hard to undo and very important or Type 2 – easy to reverse and less important. Determining how much resources you will need to invest into the decision as well as what’s the potential positive outcome and possible negative outcome is key to understand whther the decision is worth spending a lot of time on it. If the decision proves to be impactful and the positive effects outweigh the negative ones, you can justify spending more time on it. However, if the decision is not that important, you shouldn’t spend too much time making it.
Gathering Information To Make A Decision
A good decision-maker needs to know how to allocate their time. The next part of decision-making is gathering information to make the decision. With this you should always remember that most decisions are not important and therefore you should not spend much time gathering information. However, should you decide that the decision is important to your organization, focusing on gathering all the necessary information will be very important. You should know that gathering information follows a Pareto principle, which means you can get 80% of the information quite easily, but getting the final 20% requires a lot of effort. Take a look at this graph that shows the importance of a decision vs how much time you should spend making it:
Most decisions can be made quickly. However, the few important ones will require more time and effort. As a Product Manager you need to be able to determine which ones they are. And that’s precisely what makes for a good decision-maker.
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