There is always an effective solution. Do people always act rationally? Key Differences Between Management Decisions and Decisions in Private Life

Solving Routine Problems with People Because you know you will inevitably run into everyday problems, you can use the Silva Method in advance to program your future needs. I will first describe the method more extensively to you, and then I will summarize it briefly.

Solving Rare and Major Problems To solve an unusual problem or a problem of particular importance, the clairvoyant manager proceeds as described above. That is, you are programmed at the alpha level before going to bed so that you wake up at the right time to work on this particular one.

Problem Solving: Top Priority I have a strong suspicion that the first purpose of humanity on this planet is problem solving. I leave it to the philosophers to decide whether this is the destiny of solving problems for us so that we can learn and

Study and Problem Solving I have never been idle in my life. I enjoyed my family and hanging out with friends. And of course, I enjoyed my work. The only thing I was not happy with was the waste of time. I get up at 5.00 and start working. Wherever I go, I have a book in my hand. it

Researchers Validate Problem Solving at Alpha Recently, Frederick Bremner, Ph.D., and Susan Russo, M.A., of the Neurophysiology Laboratory at Trinity University in San Antonio, Texas, together with our consultant, Ph.D.

Good leaders don't make too many decisions. They only focus on what really matters. They try to make some significant decisions at the highest, conceptual level. Instead of "solving problems," leaders try to find some constants in each situation and think about the strategic and most general points.

Thus, for them, the speed of decision-making is not of great importance; on the contrary, they consider the desire to control too many variables as a sign of weak thinking. They want to know what the solution is and what basic conditions must be met. They are more interested in the result than the method. And they also believe that it is better to be logical than smart.

Good leaders know which situations require a principled solution and which require a practical one. They know that the best solution lies between necessary and wrong compromises, and they understand the difference between them. They also know that making a decision takes much less time than implementing it. If the decision did not become an action, then this is not a decision, but just a good intention. This means that although an effective decision is based on the highest level of conceptual understanding, the choice of actions must take into account the capabilities of the people who will carry them out. Finally, a good leader knows that decision-making is a process consisting of very specific elements.

Sequential steps

The set of elements in itself is not a solution. Indeed, any decision is associated with risk assessment. But if these elements do not become stepping stones on the way to making a decision, the leader will not come to the right, and therefore effective decision. In this article, I intend to describe the sequence of steps in the decision making process.

1. Problem classification. Is this a typical problem or unique? Or is it a completely new type of problem for which the rules have yet to be worked out?

2. Problem definition. What are we dealing with?

3. Determining how to solve the problem. What are the "boundary conditions"?

4. Determining what is "correct" and not "acceptable" in order to meet the boundary conditions. Before making compromises, adapting and making assumptions, it is necessary to find out what completely satisfies the boundary conditions.

5. We define the decision in such a way that it carries the action necessary for its implementation. What action should be taken to implement the decision? Who should know about it?

6. Checking the validity and effectiveness of the solution for compliance with the real state of affairs. How is the decision made? How acceptable are the assumptions on which it is based?

Now let's look at all these elements.

A good decision maker will ask: Is this a symptom of a general disorder or an accident? Typical problems should be solved using rules or principles. But true randomness can only be considered on a purely individual basis, given the uniqueness of the situation.

Strictly speaking, the leader must distinguish between two, or rather, even four types of problems. First, this can be a typical problem where randomness is just a symptom. Most of the "problems" a leader has to deal with are just that. For example, inventory management decisions in any business are not "solutions" in the truest sense. In fact, it is an adaptation that is performed with the aim of solving typical problem. Most clearly, such "problems" are manifested in manufacturing companies. Let's look at an example:

Department of product control and technical department usually face hundreds of different problems within one month. However, if you analyze these problems, most of them will turn out to be just symptoms (manifestations) of a general disorder. Dedicated control engineer production process, working in a certain area of ​​​​the enterprise, usually cannot see this. He only has the opportunity to state the monthly problems associated with leaks of liquid or steam at the junctions of the pipes.

A general problem can only be identified as a result of a lengthy analysis, in which the entire engineering and technical staff of the enterprise will take part. Then it will become clear, for example, that the temperature or pressure is too high for the existing equipment and the joints of the pipeline lines should be replaced with more reliable ones. Without such an analysis, all the time will be spent on fixing leaks, and the problem itself will remain unresolved.

The second type of problem is a problem that is unique to a particular organization, but typical in nature. Consider the following example:

A certain firm receives an offer to merge with another, larger company. If she accepts this offer, she will never receive a similar offer in the future. This is a unique situation for a particular company, its board of directors and administration. But, on the other hand, this is a typical case, one of those that happen all the time. The decision to merge will require some general rules, however, here the leader will have to use someone else's experience.

There are also truly exceptional cases that the manager must be able to recognize. To illustrate, consider the following example:

The power outage of November 1965, which plunged the entire northeastern part of North America from the St. Lawrence River to Washington, D.C., was, at first glance, a completely unique event. The same can be said about the extraordinary popularity of thalidomide * in the early 60s, which resulted in the birth of children with physical disabilities. The probability of this happening, we were told, was one in ten million or even one hundred million, and the possibility of a repetition of these events seemed as unlikely as, for example, that the chair on which I was sitting would suddenly disintegrate into atoms.

However, truly unique cases are quite rare. If they do occur, the decision maker must ask himself the following question: Is this really a unique occurrence or just the first manifestation of a new type of problem? It is the first manifestation of a new typical problem that constitutes the fourth and last category of problems considered in the decision-making process.

As we now know, both the energy catastrophe in the northwest and the spread of thalidomide were only the first manifestations of what, in the development of modern energy and pharmacology, could turn into quite serious problems if their standard solutions were not found.

All but truly unique problems require a generic solution. To do this, it is necessary to develop a rule, policy or principle. After you find the right principle, all manifestations of a similar typical situation can be translated into a practical plane, i.e. applying the rules to specific circumstances. However, truly unique events should be considered on a case-by-case basis. The manager should not develop rules for exceptions.

A good manager who needs to make a decision will take the necessary time to determine which of the four types of problems he is dealing with. Incorrect classification of the situation will lead to the fact that the wrong way will be used to solve the problem.

So we found out that the most common mistake when making a decision - an assessment of a typical situation as a series of unique events, i.e. pragmatism, coupled with a lack of common understanding and general principles. The result of such actions will be very deplorable. I believe that a clear example of such a mistake is the failure of the policies (both foreign and domestic) pursued by the Kennedy administration. Judge for yourself:

Despite the fact that extraordinary people gathered in the Kennedy administration, only the resolution of the Caribbean crisis can be called successful in its policy. Her other actions almost did not bring the desired results. The fault was what members of the administration called "pragmatism", namely, the unwillingness to develop rules and principles and the stubborn desire to consider only the "concrete circumstances of the case." At the same time, it was clear to everyone, including members of the administration, that the basic principles on which politics had been built during several post-war years had become completely unsuitable for the international and domestic politics of the 60s.

Another common mistake is to evaluate a new event as the next manifestation of an old problem, to which the existing rule should be applied.

It was this mistake that led to the fact that a small malfunction in the power supply system on the border of the state of New York and the province of Ontario grew into an energy disaster that engulfed the entire northwestern part of the country. Power engineers (especially in New York) applied a rule that was true for normal overload. However, what their instruments registered was completely unusual and required emergency rather than standard measures.

By comparison, President Kennedy's only victory in resolving the Caribbean crisis was achieved because he was able to assess what was happening as an emergency. As soon as he correctly assessed this event, his brilliant intellect and courage were most fully displayed.

Definition

Once a problem has been classified as generic or unique, it is fairly easy to define it. Everyone is familiar with questions like: “What is the problem?”, “What are the circumstances of the case?” and “What is the key to solving the problem?”. However, only the best managers know that the main danger at this stage is not a wrong definition, but a definition that looks plausible but is actually incomplete. Example:

The American auto industry has developed a compelling but incomplete definition of the car safety problem. It was this lack of understanding (as opposed to a reluctance to spend money on developing safety measures) that led to the automotive industry being heavily criticized by Congress for producing cars that did not meet safety standards, leaving car manufacturers in complete disarray. In fact, it was not fair to accuse them of neglecting safety standards.

They have made every effort to improve road safety and driver training, thinking that this is the main problem. The fact that accidents occur due to poor road safety and insufficient driver training seems quite obvious. Therefore, all organizations related to this problem (from traffic police to secondary schools) acted in the same direction, and this gave results. The number of accidents on improved highways has dropped dramatically, and well-trained drivers are less likely to have car accidents.

Although the number of accidents per thousand cars or thousand miles started to decrease, their total number and severity continued to grow. In the end, it became clear that there should have been a small but very real chance that accidents would occur despite the introduction of new rules. traffic and attention to the problem of safety in the training of drivers.

This means that further efforts to improve safety must be complemented by technical developments that will minimize the consequences of accidents. The car must be designed in such a way as to ensure safety not only in normal but also in an emergency.

The only way to avoid an incomplete definition is to check it again and again against all the facts at your disposal, and immediately discard it if any of the facts remain unaccounted for.

When making a decision, a good leader is always looking for manifestations of something unusual and constantly asks himself the question: “Does this definition contain an explanation for the events that occur, and all of them without exception?” When formulating a problem, he always indicates what the desired result of its solution is (for example, the elimination of car accidents), and then regularly checks whether this result is achieved. Finally, he returns to the problem and rethinks it at the first sign of something unusual or inexplicable, as well as at the slightest deviation from the expected result.

In essence, these are the same rules that Hippocrates introduced for medical diagnosis more than two thousand years ago. The same rules are used in scientific research. They were first formulated by Aristotle and revised three hundred years ago by Galileo. In other words, these are well-known, time-tested truths that the leader must know and systematically apply.

Terms

The next step in making a decision is to define clear conditions that it must meet. What are our goals? What are the most important tasks? What conditions must be met? In science, such conditions are known as "boundary conditions". An efficient solution must meet the boundary conditions. Let's look at an example.

“Can we solve our problems by taking away the autonomy of our department heads?” Alfred P. Sloan, Jr. must have asked himself this question when he took over General Motors in 1922. The answer to this question was clearly no. The boundary conditions of the problem demanded that strong-willed and responsible people occupy the highest posts. This was as important as centralized control. All previous leaders viewed this problem from their personal point of view, i.e., their solution consisted in a struggle for power, where there can be only one winner. Sloan realized that the boundary conditions required solving a fundamental problem, which required the introduction of a new, decentralized management structure, where the independence of departments would be combined with centralized control over the direction of development and policies.

A solution that does not satisfy the boundary conditions is worse than a solution that incorrectly defines the problem. You cannot apply a decision based on the right premises, but not containing the right conclusions. Further, a clear understanding of the boundary conditions is necessary in order to know when to abandon a solution. It usually fails not because it was wrong from the start. Rather, this is due to a change in goals (conditions), which is why a once-correct decision suddenly becomes unacceptable. If the leader has not provided for all the boundary conditions, so that in case of failure, immediately make a new, more suitable solution, then he will not even notice that these conditions could change. Consider an example:

Franklin D. Roosevelt was viciously attacked for being a radical when he became president in 1933, even though he had been the Conservative candidate as early as 1932. In fact, Roosevelt didn't change - the conditions changed. This was due to a sudden economic crisis sometime between the summer of 1932 and the spring of 1933. economic policy), lost its relevance when, after the “bank holidays” *, this task became the achievement of political and social unity of society. With the change in the boundary conditions, Roosevelt immediately changed the former - economic - goal (restoration) to political (reform).

Among other things, a clear understanding of the boundary conditions is necessary in order to recognize the most dangerous of all possible solutions, namely the one in which the necessary conditions practically incompatible. A classic example of this is President Kennedy's decision to invade the Bay of Pigs**.

One of the conditions was the overthrow of the Castro regime. Others - giving the appearance of an invasion of the "spontaneous" uprising of the Cubans. But these two conditions could only be met at the same time if the uprising against Castro suddenly engulfed the entire island and paralyzed the Cuban army. Although such a possibility was possible, it was too unlikely in a tightly controlled police state.

Decisions of this type are called "bets". In fact, they are based on something even less rational than a bet - namely, the hope that two or more apparently incompatible conditions will be met simultaneously. It's like hoping for a miracle, but the problem with miracles is not that they happen extremely rarely, but that, alas, you can't count on them.

Anyone can make the wrong decision. Moreover, we all make at least one wrong decision sooner or later. However, the manager should not make a decision that seems reasonable, but in reality does not satisfy the boundary conditions.

Solution

A good manager must start with what feels “right” to him, not what seems acceptable, because he will have to compromise one way or another. But if it is not known how to satisfy the boundary conditions, then it is impossible to distinguish a reasonable compromise from an erroneous one, which means that there is a danger of choosing the latter.

I learned this lesson in 1944 when I was on my first major consulting assignment. It was a study of the management structure and policies of the General Motors Corporation. Alfred P. Sloan, Jr., who at the time was the chairman of the board of directors and CEO of the company, called me into his office at the very beginning and said, “I'm not going to talk about what you should study and write down or what conclusions to draw. This is your task. My only wish is to tell us what you think is right. Don't worry about how we react to this. Don't worry if we like it or not. And you absolutely do not need to look for compromises to make your conclusions acceptable to us. Every leader in this company is able to find a compromise without your help. But none of them will find the right compromise unless you show them what is really right.”

A good leader knows that there are two types of compromises. The first is expressed in the old saying "Half a loaf is better than none." The other type is based on the story of Solomon's decision and builds on the understanding that "half a child is worse than none." The first case satisfies the boundary conditions. Bread is for food, and half of the loaf is also food. But the second case does not satisfy these conditions, since half of the baby cannot be a living developing child.

When making a decision, do not waste time thinking about what can be considered acceptable, what should and should not be said to the person making the decision, so as not to arouse opposition from the opposition. (The thing you fear most is unlikely to happen, while circumstances that no one even thought about can suddenly turn into an insurmountable obstacle.) In other words, the leader will not gain anything if he begins the decision-making process with the question: "What can be considered acceptable?" In the search for an answer to this question, important facts are often lost, thereby reducing the chance of finding an effective (let alone correct) answer.

Action

Turning a decision into action is the fifth essential element of the decision making process.

While defining the boundary conditions is the most difficult step in this process, turning a decision into an effective action is usually the longest. However, a decision cannot be effective if it did not contain instructions from the very beginning on how to implement it. In fact, a decision cannot be considered adopted if its implementation has not become a task entrusted to someone and someone's responsibility. Until this happens, it remains only a good intention.

The downside of a huge number of mission statements, especially in business, is that they don't say anything about the actions required to carry out the decision - about how to turn it into someone's specific task and responsibility. Therefore, it is not surprising that people in many organizations are skeptical about such claims, and sometimes even perceive them as a declaration that top management don't really intend to.

In turning a decision into action, several questions need to be answered: Who should know about the decision? What actions should be taken? Who should do it? What should be the actions so that the people who are entrusted with their implementation can cope with their task? The first and last of these questions are often forgotten, with very unfortunate results. All analysts know the following story, which illustrates the importance of the question "Who should know about this?".

A few years ago, a leading manufacturer industrial equipment decided to discontinue the production of one of the models standard equipment for a series of machine tools that were still in widespread use. It was decided to sell this model to existing owners of such machines for another three years, and then stop its production and sale. Sales of the model have gradually declined in recent years, but owners of old equipment, having learned about the intentions of the manufacturer, increased orders, and sales increased dramatically. However, no one remembered the question “Who should know about this decision?”

Similarly, no one informed the purchasing manager who was in charge of acquiring the components from which this model was assembled. His task was to purchase component parts in quantities corresponding to sales volume, and this task has not changed.

Thus, when the model was discontinued, the company's warehouse accumulated enough components for 8-10 years of production, and they had to be written off, incurring significant losses.

The action must also match the capabilities of the people who will perform it. Consider the following example:

A large US chemical company found itself in a situation where its large funds were blocked in two West African countries. To save money, senior management decided to invest in local businesses that would: 1) contribute to the development of the local economy; 2) would not require imports; businesses could be sold to local investors.

To this end, the company has developed a simple chemical process to preserve perishable tropical fruits (a staple crop in both countries) that have previously been difficult to supply to the Western market.

Enterprises were established and began to make a profit in both countries. But in the first country, the local manager set things up in such a way that they could only be managed by first-rate specialists with great leadership experience, which were not easy to find in West African countries. In another country, the local manager took into account the abilities of the people who were to run the enterprise. He made it as easy as possible technological processes and enterprise management procedure and recruited local residents for all management positions, including the highest posts.

A few years later, it became possible to take money out of both countries. However, despite the commercial success, it was impossible to sell the enterprise located in the first country. None of the local residents had the necessary managerial and technological experience, so the company had to be liquidated, having suffered significant losses. In another country, there were many local entrepreneurs who wanted to buy the enterprise, and the company returned the investment with a significant profit.

The chemical process and the business based on it were exactly the same in both countries. However, in the first country, no one asked the questions: “What kind of people are needed in order for our solution to be effective? What are they capable of? As a result, the decision turned out to be wrong.

Determining the actions required to carry out the decision becomes doubly important if this requires people to change their habits, behavior or attitudes. The task of the leader is not only to clearly allocate responsibilities, but also to make sure that people are able to cope with them. When making a decision, the manager must be sure that the change in the evaluation system, indicators of the implementation of the decision and the incentive motives of those who implement it, occurs simultaneously. Otherwise, people in the organization will be paralyzed by internal emotional conflict. Consider the following examples:

Sixty years ago, as president of the Bell Telephone System, Theodor Weil decided that the company's core business should be service delivery. This decision largely led to the fact that today telephone communications in the US and Canada is in the hands of private companies, not the state.

However, this solution could have remained unrealized if Weil had not introduced a new system for evaluating service promotion, which simultaneously served as an assessment of management performance and was directly related to the size of the service. wages leaders. Prior to this, the remuneration of the company's management depended on the amount of profit brought by a particular unit, or simply on the amount of money invested in it. New system valuation instantly changed the direction of the company.

Now, for comparison, consider the recent failure of the brilliant CEO and chairman of the board of directors of a large American company who tried to change its structure and goals.

Everyone agreed that change was needed as the company began to lose ground after years of leadership, and in many markets it began to be forced out by new competitors, albeit smaller in size, but very aggressive. Instead of supporting the promotion of new ideas, the president, wanting to appease the opposition, appointed representatives of the "old school" to the most visible and highly paid positions, in particular to three vice presidents.

For all employees of the company, this meant only one thing: “We really don’t need any changes.” If the maximum reward is due for behavior that is the opposite of what is declared, the conclusion suggests itself that this is precisely the behavior that management expects from employees and that it intends to encourage.

Only the very best leaders can do what Weill did - formulate a decision in such a way that it carries the action necessary to carry out the decision. However, each leader is able to determine the actions necessary to implement a particular decision, specific tasks that need to be put in front of employees, and the capabilities of the people who will perform these tasks.

Feedback

The solution should include ways to control and communicate the information necessary to constantly check the solution against the real state of affairs or the expectations associated with it. Decisions are made by people, and people make mistakes, and the fruits of their labors are short-lived. Even the most brilliant solution can be wrong. Even the most effective solution becomes obsolete over time.

To control the implementation of the decision, each leader creates feedback, which is expressed in reports, figures, studies. However, many solutions do not lead to the desired results or are not implemented at all, despite any reports. Enjoying the view from the Matterhorn and studying the map of Switzerland are not the same thing: in the latter case, you see only an abstraction. In the same way, the decision cannot be correctly and fully evaluated by examining the report, since the report, in essence, is also an abstraction.

A good leader knows this and follows a rule that the military began to enforce a long time ago. The commander does not read the reports of subordinates to find out how his decision is being implemented. He just goes and sees how things are. This does not mean that good leaders (or good commanders) do not trust their subordinates. They just learned the hard way not to trust "abstract" feedback.

With the advent of the computer, feedback becomes even more important as the leader moves further and further away from the scene. And if he does not decide that it is better to go and see everything with his own eyes, his connection with reality will continue to weaken. A computer can only convey an abstraction that can only be trusted if it is constantly compared to concrete results. Otherwise, you will be misinformed.

Seeing with your own eyes is the best (if not the only) way to check if the assumptions on which you built your solution are still valid, or if they are outdated and need to be replaced. The leader must also remember that any prerequisites become obsolete sooner or later. Life does not stand still.

The unwillingness to see what is happening with one's own eyes often becomes the reason that the leader continues to stubbornly follow the chosen course even after it has lost its relevance and even become dangerous. This is true for both business decisions and government policy. In many ways, this explains the failure of Stalin's policy. cold war in Europe, the failure of the US to change its policy towards a rebuilt and prosperous Europe, and Britain's stubborn refusal to accept the reality of a common European market. In every business I know, the refusal to "go and see" customers and markets, competitors and their products is the main reason for making inefficient and bad decisions.

Nobody argues that leaders need structured information to get feedback. They need numbers and reports. But if the feedback is not based on the real situation, if the leaders do not force themselves to see everything with their own eyes, they are doomed to fruitless dogmatism.

Conclusion

Decision-making is not the only task of a top manager, and usually it does not take much of his time. However, important decisions are exclusively his competence. Such decisions can only be made by the top leader.

A good manager knows that decision making is a systematic process with well-defined elements and a defined sequence of steps. If you (by virtue of your knowledge or your position) are expected to make decisions that will have a noticeable positive impact on the entire organization, its activities and results, this means that you are an effective leader.

Dear readers! We would be pleased to receive any feedback from you on the selection of articles and interviews: on the relevance of the topic, published materials, practical benefits in the work. We are waiting for your letters at .

Free subscription to Review business literature can be issued.

As we said at the end of the last lesson, making a decision is only half the battle. The second half is to evaluate how correct, true and effective it was. This is important for the reason that the assessment allows you to understand how competent the actions taken were, whether they will lead to success in the future, and in general, whether it is worth counting on them. Evaluation of the decisions made is a kind of litmus test that checks their effectiveness. However, it is very important to understand that ordinary decisions in life and managerial decisions are evaluated according to different algorithms.

Evaluation of everyday decisions

To begin with, let's repeat a little: if you are faced with the need to make some kind of difficult decision, the consequences of which bother you, first of all, you should think over the pros and cons several times, assess the situation and possible options her permission. making a decision is the first step towards its effectiveness.

The final product of the analysis of the decision will always be the result. Based on it, it will be possible to judge whether the goal has been achieved, what resources were used to achieve it, how much effort and time was spent, what happened in the end, and whether the game was worth the candle.

So, if the decision taken is associated with any quantifiable quantities, its effectiveness is quite amenable to calculation in relative or absolute units. For example, if you decide, expecting to go to new level income, you can evaluate the effectiveness of your solution after a month or six months. If you decide to launch a new ad for your product, you can understand how effective this decision was by establishing the increase in customers, the increase in the percentage of sales and the net profit.

In the case when the solution is associated with uncountable quantities, its evaluation is different. You need to understand whether you have achieved the originally set result. For example, having set yourself the task of increasing your personal productivity and starting to do more, you decided. It will be possible to sum up the results in a week by ticking the boxes next to the completed tasks in your list.

Decisions made in any other sphere of life are evaluated in a similar way. The scheme is extremely simple: the goal is either achieved or not. If it is achieved, you did everything right, if not, you need to change something. In addition, performance evaluation can be carried out with an eye on the resources spent: the less effort, time, money and other resources you spent on implementing your solution, the more effective it is. Everything is simple.

As we can see, in ordinary everyday life, it is quite easy to analyze the decisions made. But there is another category of decisions - managerial ones, and it is much more difficult to analyze them. Entire books and manuals are written on this topic, and, unfortunately, it will not work to consider all the details in one lesson. However, it is quite realistic to point out the basics of this process. This is what we will do.

Fundamentals of evaluation of management decisions

The adoption of any managerial decision can be called an intermediate stage between a managerial decision and managerial influence. This, in turn, suggests that the effectiveness of such a solution is manifested in the combination of the effectiveness of its development and implementation.

In total, there are more than six dozen various private indicators of the effectiveness of the organization. These include turnover working capital, profitability, return on investment, the ratio of growth rates of labor productivity and average wages, etc.

Evaluation of the effectiveness of management decisions involves the use of the concept of total economic effect, because in the results obtained in without fail the contribution of people is included.

It should also be said that it is very important for organizations to meet customer requirements and at the same time improve the economic performance of their activities. Based on this, when evaluating the effectiveness of decisions, it becomes necessary to take into account two aspects of performance - social and economic.

The algorithm for evaluating the effectiveness of management decisions can be illustrated by taking a trade organization as an example. So, in order to understand whether the decision was effective or not, it is necessary to keep separate records of income and expenses with regard to different product groups. Considering that it is very difficult to do this in practice, the use of so-called specific qualitative indicators is common in the analysis process. Here these are profit per 1 million rubles of turnover and distribution costs per 1 million commodity stocks.

The effectiveness of management decisions in trade organizations is expressed collectively in quantitative form - this is an increase in the volume of trade, an increase in the speed of product turnover and a decrease in the amount of commodity reserves.

If you need to understand the final financial and economic result of the implementation of management decisions, you should establish how much the income of a particular organization increases and how much its expenses decrease.

You can determine the economic efficiency of a decision that affected the growth of turnover and increase profits using the formula:

Ef P * T P * (Tf - Tpl), where:

• Ef - indicator economic efficiency
• P - profit indicator based on 1 million rubles of turnover
• T - an indicator of the increase in the volume of trade
• Tf - an indicator of the actual turnover, observed after the implementation of the management decision
• Tm - an indicator of planned turnover (or turnover for a comparable period before the implementation of a management decision)

AT this example economic efficiency reflects the reduction in distribution costs (sales costs, sales costs), which fall on the balance of goods. Hence the increase in profits. Efficiency here is determined by the formula:

Ef \u003d IO * Z IO * (Z2 - Z1), where:

• Ef - an indicator of the economic efficiency of a specific management decision
• IO - an indicator of the volume of distribution costs based on 1 million rubles of inventory
• Z - an indicator of the magnitude of changes (decreases) in inventories
• 31 - an indicator of the volume of commodity stocks before the implementation of a management decision
• 32 - indicator of the volume of commodity stocks after the implementation of the management decision

In our case, the economic efficiency of the management decision was also reflected in the increase in the rate of turnover of goods. Its indicator can be calculated by the formula:

Ef Io*Ob Io (Ob f - O pl), where:

• Ef - an indicator of the economic efficiency of a management decision
• Io - an indicator of the simultaneous volume of distribution costs
• About - an indicator of increasing the rate of turnover of goods
• About pl - an indicator of the turnover of goods before making a management decision
• About f - an indicator of the turnover of goods after the adoption of a management decision

In addition to everything, to analyze the effectiveness of management decisions, it is customary to use several specialized methods that simplify the procedure and lead to more accurate results.

Methods for assessing management decisions

In the process of evaluating the effectiveness of management decisions, seven main methods are used:

• index method. It is used to analyze the most complex phenomena with elements that cannot be measured. Indices here play the role of relative indicators. They help evaluate how planned targets, and determine the dynamics of various processes and phenomena. The index method is designed to help decompose the generalizing indicator into factors of relative and absolute deviations.
• balance method. Its essence lies in the fact that the interrelated indicators of the organization's work are compared. The goal is to determine the impact individual factors and find reserves to improve the efficiency of the company. The relationship of individual indicators is represented by the equality of the results obtained after certain comparisons.
• elimination method. It generalizes the first two methods and offers the opportunity to determine the impact of any one factor on total score company activities. This assumes that all other factors functioned in the same environment - according to the plan.
• Graphic method. It is a way of visual representation of the work of the organization, the definition of a set of indicators and the presentation of the results of the analytical activities carried out.
• comparison method. It offers the opportunity to assess the company's performance, identify deviations of actual indicators from baseline values, establish their causes and search for reserves for further improvement of activities.
• Functional cost analysis. It can be called a method of systematic research, which is applied based on the purpose of the object of study. Its task is to increase the beneficial effect (return) of the total costs for life cycle object. A distinctive feature is that the method allows you to establish the feasibility of a number of functions that will be performed by the designed object in a specific environment, as well as to check the need for some functions of an object that already exists.
• Economic and mathematical methods. They are used when it is required to choose the best options that determine the specifics of management decisions in the current or expected economic conditions. There are many problems that economic and mathematical methods solve. Among them, the establishment of the best assortment of the product produced, the evaluation of the production plan, comparative analysis economic efficiency of resource use, optimization production program and others.

The effectiveness of the work of the organization is most seriously influenced by managerial decisions. This is the reason why it is important to master the management apparatus, theory and practice of developing and implementing solutions as much as possible. This means that you need to have the skill of choosing the best alternative among several options.

Any management decisions are due to the reliability and completeness of the available data. Therefore, they can be taken both under conditions of certainty and under conditions of uncertainty.

Management decision making as a process is a cyclic sequence of actions of the responsible person to resolve actual problems. These actions consist in analyzing the situation, developing possible solutions, choosing and implementing the best of them.

Practice shows that decision-making at any level is subject to errors. This is influenced by many reasons, tk. economic development includes a large number of the most different situations that need to be resolved.

A special place among the reasons why managerial decisions turn out to be ineffective is occupied by non-compliance or banal ignorance of the technology for their generation and subsequent implementation. And for this, it is customary to use theoretical information, methods and techniques that we talked about in previous lessons.

All of the above, of course, describes only the basic prerequisites for assessing the effectiveness of management decisions. To properly apply them in practice, you must either have the appropriate education, or immerse yourself in the study of specialized literature, because. there are a huge number of subtleties, nuances, techniques and purely technical data that need to be studied, learned and mastered. This lesson can serve as a starting point for further deepening into the specifics of assessing the effectiveness of management decisions.

In conclusion of our course, I would like to highlight one more topic, knowledge of which is simply necessary for acceptance right decisions in life, education and work. This is the subject of the psychology of decision making. And we will consider it from the position of Daniel Kahneman, a psychologist and one of the founders of behavioral finance and psychological economic theory. In his explanations of people's irrational attitude to risk in managing their behavior and making decisions, he combines cognitive science and economics. Kahneman's ideas will provide you with significant support in increasing your effectiveness.

Do you want to test your knowledge?

If you want to test your theoretical knowledge on the topic of the course and understand how it suits you, you can take our test. Only 1 option can be correct for each question. After you select one of the options, the system automatically moves on to the next question.

Analysis paralysis is the most terrible disease for a team leader, while determination is his main advantage over competitors. We tell you what to do in order not to doubt your decisions and why speed is in this matter more important than quality.

Ever since college, many of us have been taught not to answer until we are completely sure of our answers. The same attitude is often manifested in some clichés from childhood, such as the parental “first think, and then speak” or the Russian folk “if you hurry, you will make people laugh.”

But do we really always have to think too much?

“Good leaders understand that at some point they will make a bad decision anyway,” says Chris Myers, entrepreneur and contributor to the American Forbes. Thus, talented leaders stop being afraid of making mistakes and prefer to follow Mark Zuckerberg's famous adage "If nothing breaks, then you are not working fast enough."

Quick decisions are a tool for managing your own popularity in the team, as well as lovely way avoid the main catastrophe for any project - stagnation. We tell you where you can start in order to drown out the inner critic in yourself and continue not to doubt your intentions.

A bad decision is better than none

Rapid response to challenges and triggers in our era of instant communications is perhaps one of the most critical skills modern man. The slightest delay in responding can not only aggravate the situation, but also damage your personal or corporate reputation, which, of course, is not in your interests.

In the popular economy, a special principle has even been introduced - ETTO (Efficiency-Thoroughness Trade-Off), according to which a person always has to choose between productivity (Efficiency) and thoroughness (Thoroughness), because, alas, to achieve the same thing at the same time, for the most part , impossible.

In this regard, practitioners are sure: good or bad, but the solution to the problem must come from the manager immediately. Speed ​​is the top priority. “In life and business, there are very few decisions that could not be reversed or changed,” Chris Myers is sure. “And we, as a rule, treat them as matters of life and death ... But still, failed decisions can always be corrected, but inaction will destroy your organization irrevocably and forever.”

You don't need to analyze all the data to make a decision

Of course, it would be ideal if, before making any decision, we would have 100% ownership of all the initial data. But in real life, this is impossible, because no machine can predict a single exact outcome, based on a condition in which there are many variables and unknowns. What is there to expect from a person.

Any attempt to find out more information before your final action is a recipe for so-called analysis paralysis (when thinking too much about a situation does not give you the courage to move on). “Personally, I like to start doing something when I have 65% of the data,” says Chris Myers. “Usually, this is enough to determine the direction of the decision and weigh the most important facts.”

Such a “data threshold”, according to the Forbes contributor, may be different for everyone, but in no case should it exceed 80%. Other experts even agree that data at the level of 70% should be enough for a person to start acting - for example, he gave a publisher a book that was not spelled checked, launched a project that was not perfected, or, you guessed it, accepted the final solution.

Do not listen to those who do not know anything about your project

And if you do it, then do it in moderation. In this regard, brain crowdsourcing is the worst enemy of a person who claims to be a leader. “We listen to others, and this is normal, because we are all social beings,” says businessman Gauriel Alyuzi. “While this can help in many places, for business it is a dead end.” In fact, only you and your colleagues can understand all the specifics of the problem, since many of its elements are already processed autonomously at the level of your subconscious. This, by the way, is partly the phenomenon of human intuition, so do not rush to ignore it if it suddenly tells you something.

Set a time limit

Sometimes procrastination can be a useful thing, because it has been proven that while we put things off, our brain is already actively working on a task. However, in the case of the prompt solution of problems, entrepreneurs still do not advise delaying concrete steps, no matter how much you rely on the genius of your own intellect.

The thing is, if we are resigned to the fact that our actions may be wrong, then delaying them simply does not make sense. “I never want to sleep with an idea,” John Braddock, CEO of My Life & Wishes, tells Business Insider. “On the contrary, I always give myself five to ten minutes to make a decision.”

A clear time limit will allow you to optimize all your resources and will not give you the opportunity to start to doubt or get involved in a vicious circle of overthinking the situation. “Tell your colleagues, family and friends about your deadline,” advises Gabriel Alusi. “So when the time comes, you will have to come up with some kind of plan anyway.”

Over time, your business experience and, importantly, your intuition will themselves suggest the most suitable solution for you, which - in case of an error - you can quickly correct.

Delegate and don't get distracted by trifles

A true leader values ​​his time and his mental strength, and this applies to all areas of his life. “Remove from your life all the small situations in which you need to decide something,” Phil Suslov, owner of Oznium, advises Business Insider. “Instead, focus on big goals.” Many famous leaders eventually got to the point where they refused to waste their time on even the rudimentary arrangement of their daily lives. For example, Barack Obama and Mark Zuckerberg even worked out for themselves some kind of uniform for work, so that every morning they would not ask themselves the question “What to wear?”. All this frees your brain from unnecessary details and allows you to concentrate on the great (