Essence of decision-making

What makes one entrepreneur different from another? Why only a handful of them shines and the others become the average joe?

Entrepreneurship skills and competencies like vision, business acumen, knowledge and expertise, management and leadership skills, negotiation skills etc are very desirable of an entrepreneur. But these skills and competencies will merely stay as underutilized potential if not used for bringing innovation and advantage, superior organizing, problem-solving, increasing business productivity and effectiveness, and enhancing competitiveness through planned action. Action arises from decisions and result-oriented actions can be made only through informed and timely decision-making. Therefore, it is through our decisions and the decision-making process by which we can convert our ideas and potential into planned action and desired results.

A generic and simplified decision-making model is depicted below.

Significance of fast decision-making for entrepreneurs

We are living in an age dominated by the internet, smartphones, digital communication, automation, advanced business software applications, BigData, fierce competition, open economies and fewer trade barriers, cashless payment, online channels, increased usage of e-commerce platforms etc. All these have spiced up the already dynamic nature of the business environment. It would be naïve for entrepreneurs and startup entities to assume that they could afford to operate from their comfort zones or the routine confines. If entrepreneurs are seeking to achieve growth, expansion and internal efficiency and effectiveness, they have to significantly improve their ability to act and operate within its own systems and to respond to its environment. Timely actions and responses stem from timely decision-making. Similar views are echoed by many contemporary business leaders and entrepreneurs. Rupal Agarwal from Obizcoin says “Quick decision making is a key success factor for entrepreneurs”. Let us quickly glance through what’s causing this latest buzz for fast decision-making in business.

· Seize market opportunities

Market opportunities do not come knocking at doors.

Opportunities have to be foreseen and seized before the competitors do and this involves vision and acumen followed up by timely and informed decision-making to give effect to the action plans.

· Improve operational efficiency and lead time

Business enterprises may find it difficult to look beyond and focus on growth and innovation when they struggle with internal inefficiency and frequent operational errors. They must first establish a firm footing on their existing systems and operations.

This involves building strong, robust and reliable information and communication systems which could facilitate real-time information sharing and faster decision-making to ensure adherence to the operational plans and lead time and early detection and prevention of operational errors.

· Counter competition

Enhanced command over its business processes and operations and improved awareness of its environmental opportunities and threats provides a competitive edge to a business enterprise in terms of its ability to respond to competitors’ moves and strategies.

This gives rise to the need for advanced and integrated information and communication systems for managing business processes which will enable faster information-sourcing and sharing leading to faster decision-making.

· Respond to customers’ changing needs and preferences

Owing to generational and demographical shifts, internet accessibility, widespread usage of smartphones, social media and digital communication platforms, increasing acceptance of e-commerce and online channels etc, customer behaviour and their needs and preferences keep on assuming new shapes and forms very frequently to suit the requirements of their contemporary lifestyles and that of their social and occupational benchmarks.

And it is imperative for businesses to respond quickly to these changes to ensure that they remain relevant to their existing customers and attract new customers as well.

· Efficient Working capital management

Efficiency in working capital management is important not just for maintaining adequate liquidity to cover operating expenses and short-term debts but also to ensure efficient utilization of funds in the long-run.

Through faster decision-making in the conduct of business activities, retention of excess and idle short-term funds can be minimized.

Artificial Intelligence (AI) for faster decision-making in business

With remarkable advancements made in the field of Artificial Intelligence and the growing influence of AI in business applications, it is now becoming imperative for entrepreneurs and startups to consider this cutting-edge technology as a platform to bring faster decision-making in their businesses. The time has come for entrepreneurs to consider — the presence of an easy-to-use single integrated platform for managing business information and communication and more automation in business processes and operational activities shielded by advanced digital security technologies.

Disclaimer: The above content/publication is intended only to provide a general overview and is not to be used as a basis for exercise of any business or professional judgment.