Management 101: Making the Wrong Decision vs. Making No Decision

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Jun 13, 2014

“It doesn’t matter which side of the fence you get off on sometimes. What matters most is getting off. You cannot make progress without making decisions.” –- Jim Rohn, American motivational speaker.

By the time you reach management, you certainly know the consequences of paralysis analysis.

This “vapor lock” of the brain can kill a project through indecision and perfectionism as surely as pulling its funding. In fact, pulling a project’s funding represents a cleaner fate, because the project dies suddenly, rather than flopping around like a fish out of water, pretending to be viable for months or years, causing damage to the entire organization.

“Collaborative” cultures vs. just getting things done

One of my clients, a massive consumer products organization, has a highly “collaborative” culture, which is code for taking forever to guy buy in, make a decision, and get started (already)!

Case in point: 3-D Realms, the software company that wasted 12 years and tens of millions of dollars on the sequel to the popular Duke Nukem 3-D video game before abandoning the effort. At LucasArts, a legendary gaming company that failed in April 2013, insiders report that the company fell apart because of indecision and apathy at the highest levels. Somehow, the creators of Star Wars and Indiana Jones couldn’t be bothered to produce any new games — even guaranteed bestsellers based on the aforementioned franchises — after having taking the industry by storm with its inventive new entries in the mid- to late-1980s.

At a national level, some historians have argued that government indecision nearly destroyed the United States of America during the Civil War. Given its industrial strength and population levels, the Union should have crushed the Confederacy within months.

But political infighting in the military and an unwillingness to put the best military leaders in positions of power — not to mention an understandable lack of ruthlessness in prosecuting the war — dragged things out for four painful years, resulting in the deaths of more Americans than any other war in our history.

Buckling down

No one wants to make the wrong decision and come off as incompetent. But to achieve anything, you have to choose a direction and move forward. If it turns out to be the wrong direction, so be it; in nearly every case, you can reverse that decision or choose a new direction.

The Board of Apple Computers fired Steve Jobs at one point, and then proceeded to nearly destroy Apple through mismanagement and bureaucratic inertia. Perhaps their greatest decision was not to fight when Steve Jobs returned and took over again in 1997, spearheading the company’s insanely profitable iMac/iPod/iPad era.

So: what should you do when faced with an uncertain decision? Follow these tips so you’re covered as best you can possibly be.

  1. Consider as many of the options as possible without stalling. Don’t leap before you look, but don’t spend forever looking, either. Moving quickly doesn’t mean making a knee-jerk decision. Gather relevant facts, ignore your ego, listen to your advisors, consider all the potential repercussions—then make the best move for your organization. William Orten, President of Western Union, hadn’t brushed off the telephone as an “electrical toy” in 1876, he could have had the patent for $100,000. It didn’t take him long to realize his mistake.
  2. Take reasonable precautions before moving forward. How can you hedge your bets before making your decision, just in case something unexpected jumps up and tries to bites you? A classic example: Time Warner’s acquisition of AOL in 2000. Chairman Gerald Levin was so eager to make the deal he didn’t put a contingency plan in place to back out or revisit the terms of the deal if AOL’s stock began to underperform. They announced the merger, the dot-com bubble burst, and AOL’s stock dropped 50 percent overnight. AOL-Time Warner is still dealing with the repercussions.
  3. Make the decision that seems to provide the best outcome. This one says it all. Even relatively minor “best decisions” can have large repercussions. In the recent Steve Jobs movie, when Jobs decided to call their new company “Apple,” partner Steve Wozniak replied, “That is so much better than ‘Phaser Beam Computers.’” He was right.
  4. Don’t hesitate to reverse direction. It makes no sense to keep digging a deeper hole when you’ve obviously made the wrong decision. Getting rid of a bad decision gives you room for a better one. Back up, look over the situation, and try a different tack once you have enough information in hand to do so. Apple’s reversal of their decision to oust Jobs proved the best thing they could have done.
  5. Don’t automatically dismiss new opportunities. Even if it seems too good to be true, at least investigate any intriguing opportunity to profit — and think twice about dismissing it, no matter how logical your reasoning. Kodak invented the digital camera in 1975, then suppressed it because they didn’t want it to impact their film sales. Later, they could have become the official film of the 1984 Olympics, but gave away the opportunity to a brash new competitor, Fujifilm. At the time, Kodak controlled 90 percent of the film market. In 2012, they entered Chapter 11 due to these and other bad decisions.
  6. Take charge. If you’re in command, be in command. Your superiors put you there so that you could move your team or company forward. The only way to move forward? Make decisions. Lots of them. Constantly. If you make ten wrong decisions, you’ve ruled out 10 things that won’t work. Remain flexible, and always be willing to try a new direction when something fails.

Directionally challenged?

You already know that not making decisions is a no-go; even when you refuse to make a decision, you’ve made a decision. So your best option remains making a deliberate decision in such a way that minimizes the impact if it happens to be wrong.

Business will always be calculated risk, but you can cut down on that risk with the right precautions. Follow the six steps outlined above, and you’ll be well-equipped to handle the future.

This was originally published on Laura Stack’s The Productivity Pro blog.