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An informal, stream-of-consciousness reflection on business ideas, events and issues in modern business, modern life and with some specifics to the web-software industry by Paul Tomori, Internet Entrepreneur

How To Make a Decision
Hindsight is Over-Rated

By Paul Tomori
Thursday, May 28, 2009 at 15:13:49 (EDT)

In these tough economic times, I am witnessing a very interesting (and quite frustrating) phenomenon: people who had trouble making decisions before are frozen like statues. I am seeing this in many different contexts from friends making (i.e. trying to make) life decisions to clients making (i.e. trying to make) work decisions. Being an "action-oriented" firm, we are finding the business-related brick walls to be increasingly impenetrable. Is the fear of the unknown that unsettling? There are usually sound ways to reduce the unknowns, so isn't it logical to just face them head on and reduce or eliminate them? Immediately? Why wait? Specifically, what causes people to freeze up in their decision making?

Here are the reasons I can think of based mostly on personal experiences where (in the distant past of course) I froze up at times in my own decision-making. For each reason, I offer an "action-oriented" solution:

1. The Decision Has Contingencies
In some respect, there are delays because of a decision tree whereby, the decision we are waiting on is contingent on some other decision being made in which we have no involvement. Solution: Identify the decision-making hierarchy and put each level to the test. Tell them, "we are awaiting your decision on X. We require that decision by date Y or we request you to advise what information you need to make your decision by date Z". Notice the time constraints. People will often respect a deadline if they know that someone else has a time-sensitive requirement. ALWAYS state a due date for your requests. Even if you don't have a specific date flow yet. First, you'll probably get the answer you need. Second, you will at least know who is holding up the game.

2. The Deciders Lack Confidence
In other cases, there is simply a lack of confidence in the decision-makers. They are afraid to make the wrong decision, so they make no decision. Solution: If possible install a new decision maker! In most cases, anyone who is holding up a decision because they fear making the wrong decision is not someone who should have decision-making responsibilities. In other cases, research and enlist the advice of experts... then make your "informed" decision. As long as you have performed your "due diligence", you'll likely be making a good decision and if not, well, what else could you have done except wait longer? To make a truly informed decision, set criteria to measure all alternatives against. This will help to rule out any biases and to keep your process as objective as possible. Don't worry about "regret" too much. Get informed. Decide. Then, move on to the next issue.

3. The Options Are Complex
In yet other cases, the choices are so overwhelming and intricate that people can't make selections with confidence. Solution: Untangle the choices. There is only one way to deal with grays in a perplexing problem.... Separate the blacks and whites that are mixed together and making everything gray. Revisit your end-goal. Often, the objective gets lost in debates. Reinforce the end goal. Identify the specific date that the goal is to be reached by, then go with the alternative that will deliver the goods on time.

4. The Perception Of Risk
Notice, I call it a "perception" of risk? Most of the time, the perceived risk in making decisions is exaggerated by our own fears. Most of the time, the risk of doing nothing FAR outweighs the risk of doing the wrong thing. For example, you could hem and haw for years about choosing the right career or the right business to open... That hemming and hawing could last til you're of retirement age. That's where the risk of not deciding can reduce one's life to a series of overly safe serial misadventures. And what is your risk if you are the underdog? Underdogs need to risk more... what have they got to lose? It's pointless for them to mimic the heavyweight competitors who are incumbent and perhaps lacking agility by their size. Don't let the top dog dictate your pace. Step out of line and start off in a new direction and set your own pace. Think of Sergey Brin and Larry Page, the Google founders, who had the audacity to conceptualize, then act on their notion for a better search engine. At the time, Yahoo was a multi-billion dollar Gorilla in the room. Sergey and Larry wrote their code in a small lab on the Stanford campus before they "upgraded" to a friend's garage in suburban San Francisco. Look where they are today. Your goals need not be so lofty (or they could be loftier). Focus on the upside. Mitigate against any treachery on the downside... then move forward.

5. The Decision Relates To A Project That Is Simply Huge
By their very size, some projects are just so darn big that people don't know where to start. They freeze up like statues again... racked with indecision about all that needs to be done. They are bogged down by the balls and chains of uncertainties that prevent them from assigning roles and allocating their capital. Do they have enough people resources? Financial resources? Know-how, Time? Etc. All that can be overwhelming to be sure, but as Lewis Carroll wrote: "Begin at the beginning and go on till you come to the end then stop." Ok, that over-simplifies a little... or does it? If the project is HUGE, then it must be broken down into chunks. That's what "beginning at the beginning" entails. So, make it happen. Divide the project into phases. Then look only at phase 1. Now, you have a small project on your hands. Not so daunting anymore, is it? Break it down further. Assess the contingencies upon which phase 1 tasks are dependent then create a task flow (i.e. the order in which tasks are to be completed), then go! What is there left to decide at this point? Just "go till you come to the end of phase one, then stop"... have a breather and apply the same resolve to subsequent phases.

Internally, we have our strategy laid out... we know what our resources are... we know specifically where we want to go... and mostly on how we are going to get there... and the only thing left is to just take action. It's a very satisfying method. We experience the "stimulus" (i.e. opportunity)... and we seek the "response" (opportunities turned into realities).

The key for us is knowing that 99% of the decisions we make are not very final anyway. They are just a matter of choosing this stepping stone over another stepping stone... for now... If we choose the wrong one... so what? We simply move laterally or reverse a little bit, make an adjustment then press forward in a revised direction. What's the big deal with that? Of course, we are a lean and agile company, so the process is easier and less prone to irreversible disaster. But, hey even mammoth companies can embrace agility by streamlining their decision-making process and breaking their human resources down into small manageable teams.

At the end of the day, it's all about reaching a "reasonable" choice.

So, do what you have to do to sufficiently reduce uncertainty about your alternatives to allow a "reasonable" choice to be made.

And remember the words of a very wise man from Port Dalhousie... "If you choose not to decide you still have made a choice."

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