I consider myself decisive. My children literally laughed out loud when I recently made this statement to them as give me a menu and I could procrastinate for hours over my choice of dinner.
However, business, and big life decisions I am comfortable making.
Why is that? What is it about making decisions that can have some of us in a flat spin agonising for hours, days – even years – suffering from decision paralysis. Whilst other people, or in my case same person different decision, can be made with confidence, or in minutes?
It’s something I’ve been giving some thought recently to as we work on a large project that will impact the whole team, our decision is about timing. Should everything be perfect? Or just good enough?
Whilst running my previous business along with my fellow directors we made a significant business decision, requiring large investment of time and money. Twelve-months after making this decision we were faced with both the loss of a significant contract, as to continue to deliver would have required us to do so at a loss, and, consequent on poor professional advice, an unplanned significant additional cost to the project. However, we adapted, made changes, and continued with the decision as we rightly knew that despite these challenges this was the right decision for the business. Did we rue our original decision – no. The right decision was made with the information available at the time.
I don’t believe there is a black and white, right, or wrong answer when making a decision in business. But that, as leaders, we should recognise that decisions are made in a context; and the evidence level needed that this is the “right” decision will very much depend on that context, and how that decision moves the business along the planned path. Context could be time, place, function of the decision is it a step to a larger goal, level of investment, business impact and more.
If the best decision is made given the information available at that time, then we can do no more, and should be confident in the decision. Remembering that only perfect decisions are made in hindsight.
Many businesses will have made decisions in December 2019 that with the benefit of hindsight of a global pandemic they likely wouldn’t have made – were the leaders wrong in those decisions. No, they had no way of knowing what was about to happen. Would they now possibly consider a similar scenario when making a future decision – quite possibly.
Let me explain.
As leaders we continually make decisions daily, and as with any other skill our ability to confidently make decisions increases with practice. Some decisions we make so regularly that the decision-making process happens without conscious awareness – just think about all the decisions you make whilst driving. If you stop and reflect for a moment, you’ll realise that there are likely a myriad of decisions that you now make on a daily basis that earlier in your career would have had you agonising over.
However, if your decision is about something new or unfamiliar; or a decision that could have a significant impact upon your business, team, or other stakeholders then that decision making process rightly becomes conscious. We identify the issue. Consider alternatives from “do nothing” through degrees to the most extreme option. Often some alternatives will be quickly eliminated – almost by “gut” feel – we inherently know that these are the wrong decision. Likely leaving us with two or three alternatives. At this point we gather evidence and consider options. But how much evidence do we need? This, I moot, is where context becomes significant.
For example, you may have a variable amount of evidence of the pro’s and con’s of option A and option B. To gather incrementally more evidence on each option will take some significant research and delay the decision-making process – meanwhile your competitor has made their decision and takes the new product to market, or launched their marketing campaign utilising the new social media platform. If, by losing that first to market / platform edge your business is significantly detrimentally affected the better decision would have been to have acted with less information; accepting that some adjustment is needed in market. Or that the product may fail – but you will get learnings from that failing; and that that failure will not have reputational or other significant impact on the business. There is an argument to say that businesses that succeed are those that fail faster and learn quicker than the competition – this is, however, likely industry specific.
In another scenario a decision may be made with limited information that won’t garner a significant competitive advantage, but that will cause significant disruption to your team – you may want to gather more information in this context to ensure that the possible impact of demotivating the team by a failure is balanced against any small benefit gained by reaching a quick decision on limited information.
So, back to Good, or Good Enough? Either is Right. Neither is Wrong.
This is, to my mind contextual, and that one decision may need to be “good” whilst another can be, or possibly even should be, to avoid the detriment of time lost “good enough” – be clear on what this looks like.
Accept that you will never have all the information you could possibly have as some information only comes from experience. Focus on the controllables, don’t worry about anything that may impact on the decision that you can’t control. Consider the context and balance the risk.
Recognise that lengthy procrastination can be as bad as a poorly made, rushed decision – the balance is contextual.
For me, as a leader, the most critical element to decision making is that I am comfortable and confident in the decision I have made. That tells me that I have sufficient information to make the decision, in the current context and made it in a timely manner. If it doesn’t fully work out, needs tweaking or reworking, or a better alternative comes along then as with anything in business you change and adapt. Accept that not every decision you make will work out perfectly – remember hindsight is a wonderful thing – but you don’t have that crystal ball. And always consider your direction of travel – does this decision take you along your pre-determined path towards your goal?
At Henwood Court we work with Business Owners daily, helping them determine life goals create a financial plan to deliver this aligning business goals with their life goals. If you, or your clients are making those big decisions without understanding the true direction of travel in life then please call the office on 0121 313 1370 and speak to one of our Financial Planners about how they can work with you to create your Lifesense® plan supported by your Financialsense® strategy.