How to Make Better Decisions to Move Your Business Forward So long as you base your decision-making on reactive thinking, you have a hustle, not a business.
By Scott Oldford Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Inside of your business, there are three levels of decision-making.
The problem is, most entrepreneurs are unaware of this, so they simply make whatever decision they think is best. In the beginning this is fine, because you build initial success and momentum through trial and error.
Related: How to Avoid Letting Emotions Control Financial Decision Making
It helps to be the entrepreneur who breaks things and innovates, but as you scale your business from six to seven figures, you need to evolve from an entrepreneur into a CEO. You need to own your business so it no longer owns you, which requires a different level of thinking.
Within your business there are three types:
- Reactive decision-making
- Proactive decision-making
- Strategic decision-making
In the beginning, most entrepreneurs base their decision-making on reactive thinking. You move at a fast pace, so it's near impossible to strategize and come up with a plan.
Your aim is to elevate through these three levels until you base the majority of your decisions on strategic thinking. In this article I'd like to explain how each level of decision-making works, and why it's vital to move from reactive to strategic as quickly as possible.
1. Reactive decision-making
Every entrepreneur begins here. You wake up each morning and feel like a firefighter putting out one flame after another. You have no idea where the next one will spring up, but you know it will at some point.
Related: 5 Critical Warning Signs That You're Making Bad Decisions
You react to everything around you, meaning you spend little time on the decisions you make. You never feel like you have enough time, and it's hard to feel like you're on top. Worse, you use a lot of your energy doing this, which means you have less of it to reserve for the things that matter within your business.
You don't feel in control, and neither does your team. It's chaos, and although it may seem like organized chaos, it's still chaos -- and successful businesses that scale from six to seven figures are not built on chaos.
So long as you base your decision-making on reactive thinking, you have a hustle, not a business. But, this changes once you elevate to the next level: proactive decision-making.
2. Proactive decision-making
Depending on your business and initial success, you can move into proactive decision-making rather quickly. This is the stage where you think 90 days in advance. You no longer wake up each day putting out fires; instead you wake up knowing what to do and when to do it.
This isn't to say there aren't fires that need dealing with, but you have people within your team doing this for you (allowing you to spend your time on more important matters).
Related: Making Decisions Under Uncertain Circumstances
Entering the proactive decision-making stage is an important period for an entrepreneur, because you now have enough time and energy to plan for the future. You begin to understand your cash flow, where you will be 90 days from now, and the general plan and process to get you from A to B.
As an entrepreneur it's vital you get to this level of thinking as soon as possible, because in this stage you can see what's coming at you before it reaches you. This allows you to proactively deal with obstacles and stop mistakes from spiraling out of control.
At this level of thinking, you take control of your business, but you aren't ready to truly own it until you step into the final level: strategic decision-making.
3. Strategic decision-making
The truth is, few entrepreneurs get to this stage, and it can take those that do years to think at a strategic level on a daily basis.
This is the promised land. Those who base their decision-making around strategic thinking are the ones who own the most impactful businesses, and those who enjoy true happiness, abundance and freedom.
Related: 5 Steps to More Smoothly Delegate Decision-Making
At this level of strategic thinking, you not only know what's happening today and in the foreseeable future, but you appreciate where you're going over the next few years. This doesn't mean you have a bunch of annual goals or a vision board, because this can distract you from true strategic thinking.
What it does mean is, you understand the impact you're making: for yourself, your team, your audience and to your industry as a whole. You have a grander vision, and although you may not know the exact road map that will get you there, you understand the fundamentals on how you will do it.
Once you get to this level, everything changes. But, it can take you years to move through reactive to proactive to strategic decision-making, and some people never get there. The good news is, working through this process doesn't come down to talent or skill.
What drives this growth is your mindset, and you can make huge strides today by simply thinking about all this. Be aware of where you are, and commit to this idea of becoming a strategic thinker.
It isn't to say your entrepreneurial decision-making isn't needed, but if this is all you have, you will never own a business that impacts the world like you want it to.
From here on in, dedicate time each day so you can "think" about how you can stop fighting fires, and instead plan for the next 90 days. Find ways to delegate, outsource and kill certain tasks. Start thinking proactively, and then elevate to strategic decision-making so you can change the world.
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