Simplifying Business Decision Making

file000550955311In business we’re often required to choose between two (or more) alternatives that have competing benefits and burdens.  If we’re right, the path leads to success. If we’re wrong, bad things can happen.  We break out the pro/con list.  Maybe wish for a crystal ball or the combined benefit of time travel + hindsight.  Yet sometimes that process doesn’t lead to success.


Years ago, I was introduced to a method that is essentially a three-dimensional pro/con list on steroids. Using it can produce better decisions faster and sharpen our ability to make them.


Two things are required up front.
  • Humility – Humility to set aside the temptation to use logic to justify our gut reaction
  • Discipline – Discipline to employ the method
After using it for “big decisions” in the McGrath house for a while, I started to use it with my business clients. These decisions ranged from general business counsel questions, like selecting an entity type or evaluating business opportunities, to developing an executing a negotiation strategy.  They especially arise in the context of litigation.  That is, the process has value in both strategic and tactical planning.


The method is set forth in an easy to read book called Six Thinking Hats by Edward de Bono.  The author suggests six different thinking “hats” each of a different “color,” with each color having a defined role, perspective, or way of viewing a particular problem.  The colors and hat imagery help keep the rules of the process easy to follow, visual, and even a bit fun.
  • The White Hat is objective, neutral thinking in terms of facts, numbers and information.  Focus on the data available when you’re wearing this hat.
  • The Red Hat is emotional, with judgements, suspicions and intuitions.  You look at problems using intuition, gut reaction and emotion.
  • The Black Hat is sees risks and thinks about why something will not function.  This negative hat looks cautiously and defensively at all the bad points of a decision, trying to see why it might not work.
  • The Yellow Hat is positive, optimistic, clear, effective and constructive.  Wearing it helps decision makers think positively and to see all the benefits of the decision and the value in it.
  • The Green Hat is creative, and searches for alternatives.  Thinking under this hat is used to develop creative solutions to a problem. It is a freewheeling way of thinking, in which there is little criticism of ideas.
  • The Blue Hat is facilitative, about employing the method.  It defines the focus of the thinking, plans the sequence and timing of each “hat,” asks for changes in the hat employed if necessary, handles requests from a group to change hats if needed, and captures the output of the session for consideration by the team.


Use this technique for the next time you have to make a decision and observe the effects of the decision from multiple view points. This practice will give you the opportunity to avoid public mistakes and create more positive and sound decisions.


This publication and the information is intended to be general in nature. It is not legal advice, nor is it intended as such. You should consult with an attorney to determine how laws or decisions impact your particular circumstances. 

About Chris McGrath

I'm a Carmel, Indiana business attorney providing business counsel, commercial litigation and mediation services based on over 20 years of experience. My firm is founded on a principle of supporting others' advancement and achievement, and my core values are service, passion, faith & loyalty.Chris McGrath's Google+ Profile