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How to Make Better Decisions for Your Independent Pharmacy


March 6, 2019


Inside: Every decision you make impacts your pharmacy business and livelihood. Learn the skills for better decision-making.

Running an independent community pharmacy means making tons of decisions.

And many of those choices have high stakes: Should you call a physician to ask about what looks like a questionable course of treatment? Should you open another location? Other decisions have low stakes, but they still affect your bottom line and can never be taken for granted.

Better decisions result in better business. The good news is, decision-making is a skill. One you can develop and hone over time. Start improving your decision-making today with these tips.

Eliminate decision fatigue

What will you wear today? What will you have for lunch? Which route will you take to work? You make thousands of decisions over the course of a single day. A Cornell study says the average American makes 226.7 decisions each day about food alone.

That many decisions will tire out even the most stalwart leaders. That’s because of a phenomenon researchers call decision fatigue. Everyone has a limited amount of mental energy to devote to decisions, and as that energy is depleted, your choices become less and less sound.

Turn Your Autopilot On
Reduce decision fatigue by delegating some of your smaller, less consequential daily decisions to habit. That could mean packing the same lunch or even wearing the same thing every day. It may mean taking the same route to work each morning, walking the dog at the same time each day, or letting the donut shop clerk pick out which variety of donuts goes in your dozen.

Automating the little things allows you to save your energy for situations that require more deliberation, ensuring you go into the most important decisions with energy and clarity.

Timing Matters
Try to make your most difficult decisions early in the day. When researchers in Argentina studied elite chess players, they noticed they made slower, more accurate decisions in the morning and sloppier, riskier decisions in the evening—regardless of whether the individual players described themselves as a “morning people” or “night owls.”

Consider carving out an hour or so each morning to address big decisions you’ve got coming up. When you can, avoid setting yourself up to make too many consequential decisions in a single day.

Identify an alternative

It may seem like obvious advice, but identifying all your options is crucial to making smart decisions.

Business researcher Paul Nutt has identified a close correlation between how many options a group considers and their level of success. In one study, he found that decision makers actively sought a new option beyond the first choices presented just 15 percent of the time.

In a later study, he found that people who considered only one alternative wound up calling their decision a failure more than 50 percent of the time. Those who weighed at least two alternatives reported success 66 percent of the time.

If you find yourself viewing a situation as a yes-or-no choice, challenge yourself to identify a third option. To do that, experts recommend diversifying your pool of decision-makers. People whose lived experience is different from yours are more likely to see the situation differently, which could lead to new insights.

Give yourself a time limit

It may seem counterintuitive, but spending too much time ruminating on a decision can cloud your judgment. A habit of pondering will lead to a lot of delayed actions. You want to give yourself enough time to identify and analyze all your options, but poring over the same information again and again is unlikely to reveal anything new.

Give yourself a deadline. For smaller decisions, pull out an actual timer to monitor how long you have left to lock in your choice. For bigger things, it may be reasonable to take a day or two to ruminate even after you have all the relevant information—but you still need a deadline.

Draw it up or write it down

Organizing your thoughts on paper helps you see things more accurately. Sometimes, just getting it all out of your head will make the right choice clear. Other times, getting it all down is just the beginning. There are several common methods for organizing information to make a decision.

Pro and con list
The pros and cons method dates back at least as far as 1772, when Benjamin Franklin described his rule for making decisions.

The pro-con list’s appeal is its simplicity. However, its biggest limitation is that it really only applies to situations with a yes/no decision. It can help you decide if you should extend your hours, but it’s not much help in determining what hours are best for business.

Decision grid
A decision grid (or “decision matrix”) helps you organize your thoughts when a situation involves multiple choices and variables. You list your decision alternatives as rows, then list relevant factors affecting those decisions—such as cost—in columns. Next, establish a ratings scale to determine the importance of each alternative/factor combination. The goal is to quantify your priorities. You can draw your own decision grid freehand, or find an Excel template online.

Decision grids are good for complex decisions when you’re trying to limit the influence of emotions or gut feelings. But like any data-based approach, the results are only as good as the data you put in. If you’re not honest and accurate about the importance of each factor, your results will be skewed.

SWOT Analysis
“SWOT” stands for “strength, weakness, opportunities, threats.” Strengths and weaknesses are your pharmacy’s internal traits—things you can directly control—like excellent employees or outdated machinery. Threats and opportunities are external factors that affect your business—like rising PBM fees or legislation that expands pharmacists’ clinical abilities in your state.

This method takes a more holistic approach, so it’s most useful when evaluating big-picture situations. In fact, a SWOT analysis may serve as a first step in identifying potential changes you’d like to make, which you can then analyze using a pro and con list or cost-benefit analysis.

For example, if you identify “difficulty handling the volume of prescriptions” as your weakness, you may in turn ask yourself if it’s time to hire more employees or even open an additional location. Making SWOT analysis part of your annual or even quarterly planning process can help you make better decisions by forcing you to think strategically.

Cost-Benefit Analysis
As the name suggests, a cost-benefit analysis weighs the price of a specific action against the potential advantages. This approach is most useful in making decisions that involve money. Should you invest in a new POS system? Should you hire another pharmacy technician? A cost-benefit analysis requires you to identify how much you’d spend on the action in question and how that move would improve your business.

Cost-benefit analyses often involve great detail, so an Excel template can help you organize all the relevant information.

Conduct a premortem

Pretend for a minute that you go forward with a decision and it fails spectacularly. What might have caused that? Thinking through the possible failures can help you identify pitfalls associated with each option. The concept is called “prospective hindsight” and the exercise is called a “premortem,” developed by psychologist Gary Klein.

It works best in the context of a major decision because the process takes a while. You’ll need to get all the stakeholders together face-to-face and plot out a couple of hours to trace all the possible directions things could go.

Premortems allow you to anticipate the potential pitfalls of a specific plan and adjust accordingly without the collateral damage of going forward with a flawed plan and failing.

 

Make smarter decisions to better your pharmacy business.


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