Entrepreneurship Decision Making Process

Decision making is all about employing one’s mental processes to come up with a final
choice after careful consideration of several options or alternatives. The outcome of your
decision could significantly affect your work, your business, and even your life. This is
why in entrepreneurship, making intelligent decisions is regarded as very important
because it could mean the difference between success and failure of your endeavor.

Components of Decision-Making
In order to make intelligent decisions, you need to identify the four components that are
instrumental to making the right choices. 1. Context. This involves the environment where
the decision should be made on. You should get all the relevant information, the facts, the
data, and everything else you need to help you make a decision.
2. Objectives. It is important to have a clear understanding of what you hope to achieve
after making a decision because this will serve as a guide in the process of deciding. Your
objectives should make the whole process logical, easy, and a lot less stressful.
3. Alternatives. Know all the available alternatives before making a decision. Analyze
everything carefully and do not limit your options to a very small number. Gather as many
options as possible before making a decision and find out the risks involved.
4. Criteria. If you have knowledge of your objectives and you have all the information you
need, coming up with a criteria should not be difficult. This could be hard or soft
criteria; hard includes budget and time allocation whereas soft includes employee
satisfaction and organizational disruption. Assess your criteria fully before making a
decision.

The Six Thinking Hats

The six thinking hats, otherwise referred to as the de Bono Hats System, comprise six
thinking styles created by Edward de Bono, a physician and consultant, to help you make
intelligent decisions. These are: white hat, red hat, black hat, yellow hat, blue hat, and
green hat. Before deciding on anything, you must utilize all six hats to come up with a
rational, effective, positive, and feasible decision.

White Hat
This thinking hat requires you to focus on the available data and find out what learning you
can get from it. You are to remain very objective while under this hat and make sure you
analyze the data you have carefully and comprehensively.

Red Hat
This thinking hat requires you to listen to your intuitions, to your gut reaction, and feelings.
You would also consider how others will react to your decision, especially those who are
not very familiar with you and the way you make decisions.
Black Hat
This thinking hat looks at the negative side of things. You would need to be cautious and
defensive when under this hat and find out what would happen if the ideas or the decisions
you make do not work. This helps you prepare for contingency plans and be proactive
should things go wrong in the process.

Yellow Hat
This thinking hat looks at the positive side of things. You would need to examine the
benefits of a certain idea or decision and pinpoint possible opportunities. This helps to
motivate you to keep going even when faced with adverse reactions from others.

Blue Hat
This thinking hat is used primarily for process control wherein people gather for meetings
and brainstorm on contingency measures and new ideas. This also employs the aid of the
Black Hat and must be used alongside it, should there be a need to do so.

Green Hat
This thinking hat utilizes creativity. It requires you to think out of the box and be
resourceful when addressing an idea, an issue, or a concern. The green hat strives to find
more options and solutions when problems come your way.

Decision-Making in Entrepreneurship
Entrepreneurship involves managing, building, and molding of ideas, endeavors,
businesses, and ventures. A large part of it relies on making intelligent decisions in order to
come up with positive outcomes. In small businesses for example, you will be faced
everyday with problems revolving around your people, your products and services, your
finances, and your customers. If you do not know how to make effective decisions, you
could risk a lot of things, including the lack of support from your people, driving customers
away, and ultimately, losing your business. For this reason, decision-making is rendered
essential in entrepreneurship because although you may have the drive and the most
remarkable ideas in your head, if you cannot make sound decisions, all these will be put to
waste.