What is Decision Making? How to Make Better Choices

what is decision making?

What is Decision Making? How to Make Better Choices

Making decisions is a key part of everyday life.

But what exactly is decision making, and how can we get better at it?

In this post, I’ll break down the key elements of good decision making in an easy-to-understand way.


What is decision making?

At its core, it’s about setting goals, understanding your options, gathering information, analyzing the pros and cons of each option, and making a choice.

Let’s explore the key elements in more detail.

What is Decision Making? A Definition

Decision making is the process of identifying a decision that needs to be made, generating alternatives, gathering and evaluating information about those alternatives, and selecting the best option to meet your goals.

It involves using your skills, knowledge, priorities, and values to take the best course of action in a particular situation.

Decision making pervades everything we do, both big and small.

Some examples of decisions we make include:

  • Deciding what to have for lunch
  • Choosing which college degree to pursue
  • Selecting a doctor for a medical concern
  • Buying a new home
  • Taking a job in a new city

These decisions can range from routine to very complex and critical. But all fundamentally involve the key elements outlined below.

The Key Elements of Decision Making

While there are different models and frameworks, key ingredients go into an effective decision-making process.


What do you hope to achieve with this decision? Your objectives will shape the choices you consider. A good decision aligns with your short and long-term goals.


Decision making involves examining multiple possibilities or alternatives. These options may be provided to you, or you may need to actively generate the options yourself.


To properly evaluate options, you’ll need to gather information from reliable sources. This can include internal knowledge or external research on the pros/cons, risks/upside, costs/benefits of each option.


With goals defined and information gathered, you analyze how well each option would help you meet the goals. You may use criteria to score options, create spreadsheets to quantify factors, or simply reflect deeply.


Finally, decision making requires making a choice among the options — selecting the one that best fits with your goals and analysis. This often involves tradeoffs on some factors, but the highest alignment on key priorities.

Once a choice is made, you carry it out while being open to any need to revisit the choice later based on new information or changing circumstances.

So in summary, good decision making involves:

  • Clearly defining goals
  • Coming up with options
  • Researching information
  • Carefully analyzing pros and cons of options
  • Making the best choice
  • Implementing the decision
  • Revisiting if needed

When done right, this leads you toward choices aligned with key goals and priorities. But decision making rarely goes perfectly — there are many ways our brains can trip us up. Being aware of them is key.

Types of Decisions

Not all decisions are created equal. Some common ways to categorize types of decisions include:

Personal vs Professional — Personal decisions involve your private life, while professional ones relate to your job or career path.

Big vs Small — Big decisions often involve major investments or life changes, while small decisions are routine and low stakes.

Short-term vs Long-term — Short term decisions prioritize the near future. Long term decisions come with a future-focused outlook, sometimes sacrificing near gains.

Individual vs Group — Some decisions are made solo by a single individual. However, group decisions require input from multiple people before choosing.

The decision making process may vary based on the type of decision — a low-stakes daily choice often relies on intuition, while a major life decision merits a heavier analysis. We’ll explore more below.

Individual vs Group Decision Making

Decisions made individually and by groups follow similar steps but have some differences:


  • A single person identifies the need for a decision, seeks input if helpful, and is in full control of choosing an option.
  • Quicker process focused on individual goals.
  • Prone to individual biases.


  • Multiple people recognize a decision must be made and have input into analyzing options and making the choice.
  • Brings broader perspectives to inform the decision.
  • Ensures stakeholder buy-in but can be a lengthy process.
  • Minimizes individual biases.

In simple low stakes situations, individual decisions work fine. But for decisions that affect many people or have complex tradeoffs, consult others and strive for group consensus.

Rational vs Intuitive Decision Making Styles

We just said decision making should be thorough and analytical right? Well, not always. There are two fundamental styles people use:


  • Methodical step-by-step analysis of options to logically select the right choice.
  • Time intensive, relies on collecting robust objective data.
  • Minimizes emotional bias.
  • Best for complex, high stakes scenarios.


  • Following your gut instincts and heart to quickly decide on an option.
  • Much faster, drawing on personal experience and emotions.
  • Prone to biases.
  • Appropriate for simple or pressing decisions.

So rational decision making excels when selecting a medical procedure or making a crucial financial investment. Intuitive decisions work fine for picking out tonight’s dinner.

Ideally, find the right balance of analysis while also honoring your intuitions. Just recognize the tradeoffs in play around objectivity vs speed.

Common Decision Making Biases

While we may aim to decide rationally using facts alone, many unconscious biases can creep in. Here are some common ones that negatively impact decisions:

Anchoring bias — Giving disproportionate importance to the first information received on a topic.

Confirmation bias — Seeking and valuing input that confirms your existing beliefs.

Loss aversion — Overweighting potential losses compared to equivalent gains.

Overconfidence — Overestimating your ability to predict future outcomes or manage risks.

Being aware of biases, and proactively seeking input that challenges you is key to minimizing their impact on decisions you face.

Tips for Improving Your Decision Making

Here are some tips to enhance decision making skills whether choices are big or small:

  • Clearly define goals and decision criteria upfront before assessing options. What do you hope to achieve?
  • Generate multiple options instead of getting anchored on just one or two.
  • Seek objective, accurate information from diverse sources.
  • Actually write out pros/cons to quantify and clarify impacts of options.
  • Consult experts and people affected by the decision to balance perspectives.
  • Take enough time to analyze thoroughly, but decide timely enough for action.
  • Go with your instinct once analysis is complete if no clear winner emerges.
  • Learn from both good and bad past decisions to hone your approach.
  • Review decisions later to see if adjustments need to be made.

Getting better at decision making, both individually and as teams, takes intention and practice. But doing so pays dividends through improved choices large and small.

Decision Making Framework Examples

Let’s walk through some examples of applying decision making frameworks to real scenarios:

Choosing Health Insurance Plans

When my startup grew from just me to 10 employees, I needed to decide on a group health insurance plan — a big decision with many factors to weigh. Here’s how I made it in a thorough step-by-step manner:


Provide quality affordable healthcare to attract and retain talent at my growing company. Minimize the complexity of administering the plan.


I worked with an insurance broker to identify four plan options with quotes that covered needs but differed on costs, copays, prescription drug tiers, and provider networks.


I created a table detailing coverage, premiums, deductibles, and copays for core common services for each. I also got feedback from employees on key considerations.


I rated the plans on cost to employees and the company, breadth of provider choice, and ease of administration. One was best on costs and features but more admin work, while another simplified things but was pricier.


I ultimately chose the plan that balanced costs and user experience even though it meant more administrative work for our operations lead. Saving money but causing employee frustration would have been counterproductive.

Taking a New Job

When I was 26, I was thriving at my first major startup job, but an enticing opportunity came up at another hot company that felt like my dream job. Here’s how I evaluated the big career decision:


I hoped to expand my skills but also wanted work/life balance for the long haul. I set income and learning goals alongside work-hour limits.


I assessed staying in my reliable current role versus taking the risk to jump to a new startup. I gathered input from mentors too.


I made lists of pros/cons for each option, including title, salary, equity offers, work hours, commute, culture, learning potential, and job security.


The new job offered excitement, a salary hike, and a chance to manage a team sooner at the cost of likely longer hours and some instability being at an early stage startup.


While hard to leave my happy stable job, I decided to take the risk knowing the new role aligned extremely well with my values around learning and greater responsibility.

In the end I stayed at that job over two years before moving on to start my own company! So following a solid decision-making approach can truly pay off.

Q&A on Decision Making

Q: How do I know when I’ve made the right choice or the wrong one?

A: You can’t always know for sure, as decisions involve unknowns and uncertainty. But you can define good decision making as the process of analyzing options thoroughly against clear goals before committing. If you choose for the right reasons through a robust methodology, consider it a good decision whether or not the outcome is what you hoped for. Review decisions later to learn for the future.

Q: I freeze up when facing some big decisions. How do I get over that?

A: Breaking down key elements methodically can make big decisions feel more manageable. Also start by simply listing out possible options – no need to select one right away. Consult others to gather diverse input. And give yourself a hard deadline to decide to prevent overthinking.

Q: What decision-making tools do you recommend?

A: Prioritize goals first – a tool like Goal Mapping can help. Write out pros/cons on paper or in spreadsheets to quantify them. SWOT analysis examines strengths/weaknesses/opportunities/threats. Decision Matrix scores options on criteria.polling or voting can assist group decisions.


Decision making boils down to five key steps – establishing goals, generating options, researching information, analyzing pros and cons of options, and making the optimal choice.

Soliciting diverse input and watching for biases helps.

Apply the right frameworks to suit the decision, balancing intuitive judgement with rational analysis.

Effective decision-making takes work but determines success in career, relationships, health, and more.

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