When did we get so bad at making business decisions?

Today, decisions are everywhere. Europe has more than 30 million companies with over 150 million employees. If even half of the 30-35,000 decisions the average person makes every day are work-related, that’s 2-3 trillion decisions happening across European workplaces every single day.

The number might sound astronomical, but is it really a surprise? After all, as a founder I can tell you from experience that businesses run on decisions, from the small to the strategic. But, what worries me is that, according to new Pleo research, we’re no longer very good at making them.

In this article, I’ll dive into the reasons behind this change and explore how businesses can turn it around and master confident, effective decision-making.

Why are decisions so hard to make?

Fifty-eight percent of financial decision-makers say they are making more high-level decisions than they were a year ago. And it’s not just the number that’s causing problems, but their increased importance too. Whether it’s down to business pressures, the geopolitical climate, macroeconomic factors or the need to do more with less, the choices leaders make are more high stakes than ever before.

However the circumstances for making them are far from ideal. Financial professionals lack full confidence in as many as 41% of the decisions they make, with only a third saying they have full confidence in making them during an economic downturn.

Worse still, many leaders aren’t making them at all, with half saying they experience decision-freeze (having so many important decisions to make that they don’t make any).

Every leader must accept that not every decision is going to be the right one. But not making them at all creates a new kind of problem; a leadership vacuum that seriously risks revenue, growth, financial health and more.

What decision-makers need: context and culture

So how can companies create the right conditions for effective decision-making?

Firstly there’s the question of context. According to our research, over half of decision-makers say their decision-making is negatively impacted by a lack of access to contextual data. This can be a real killer of confident decision-making and businesses cannot expect to make the right decisions in the dark.

Platforms, with their ability to centralise data, are a great way to remedy this. But the truly transformative tools combine this with visibility – for example, seamlessly managing all your payment methods and empowering teams with intelligent spending limits. This gives context and aligns your decisions with strategy; revolutionising your levels of control and confidence in the process.

But however good these tools are at giving context, leaders should investigate other reasons behind a lack of organisational confidence. Surveying their team to identify the major blockers can help build a roadmap towards creating a more confident, decisive business.

If, for instance, the main blocker is the sheer amount of decisions, then they should consider dividing decisions into those that are reversible and business-critical ones that aren’t; making sure their teams spend most of their time on the second type.

This dual approach of investing in the context and culture around decision-making can help businesses transform their confidence levels, and to act decisively when it’s most needed.

See Also

Why a healthy team culture boosts founder wellbeing

Finding the right tool for the job

Forty-one percent of CFOs lack access to the kind of spend insights that ensure investments lead to opportunities, not risks.

This shows how much can change with a central source of financial truth – something that has been key to Pleo’s 10 year evolution from expense tool to engine. Which is why today, we think of ourselves as a confidence tool that helps everyone, not just the financial experts, to make smarter financial decisions.

It’s my experience that not every decision you make will be the right one. But what’s worse is not making them at all. A lack of decision-making risks seriously undermining your business. And while it is every decision-maker’s dream to have 100% confidence in their decisions, it’s not possible. However we do have a very good back-up: data.

Your decisions might not always be perfect, but if they are rooted in data, then you can’t go too wrong. What’s more, any learnings go back into the data, making it an even richer pool to take from.

So yes, choices, quandaries, predicaments, dilemmas – whatever you want to call them, they’re everywhere. But adopting one central source of truth can be one decision you make that ends up unlocking all others in addition to a more confident, effective business.