Waiting too long to make decisions can slow businesses down, frustrate employees, and mean missing critical opportunities. When should you just make the decision versus gathering more data or cogitating on it longer?
In order to decide when your choice needs to be made, consider a few factors. First, consider the decision’s importance. Choices of little consequence should not take very long. For more important decisions, spend the extra time to either reflect or gather and analyze data. Then, determine how often the same decision will be made. If the decision is one that’s made often, it may be worth developing an analytical approach. These approaches may take time up-front, but they will reduce the time for such decisions in the future. Next, look into buying an option, which can speed up the process and offer a learning opportunity. Finally, put a clock on your decision by assign a deadline by which it needs to be made.
You’ve come up with ideas, narrowed down your options, and looked at the available data. You’ve asked all the right questions to guide your choice. And yet, for some reason, you just can’t pull the trigger on a decision. What’s the hold up?
Whether you’ve experienced this indecision yourself or you’ve known a leader or executive with the habit, it can be incredibly problematic — and potentially damaging — to sit on decisions. Waiting too long to make decisions can slow businesses down, frustrate employees, and mean missing critical opportunities. When should you just make the decision versus gathering more data or cogitating on it longer?
In order to figure out whether a decision requires further time or should just be made, you need to do a little “meta-decision analysis,” or put more simply, you need to decide how to decide. In order to decide when your choice needs to be made, you have to think about how important it is, how urgent it is, and whether you can use some organizational decision-making approaches to make it more accurate and likely to be correct.
Consider the Importance of Your Decision
The single most critical factor in determining how long a decision should take is how important it is. Decisions of little consequence should not take very long. So the first step in deciding how to decide should be to ask yourself — or others if you don’t trust your own judgment: How much of a difference will this decision make? If it won’t make a big difference to your life or business, just make the decision and move on. Then you can devote your scarce time and brainpower to the decisions that really matter.
For more important decisions, there are two good reasons for extending your decision-making process a bit. One is to reflect, and the other is to gather data and analyze it. Reflection — particularly when the decision maker can engage the unconscious mind — can be a good way to determine which factors are most important in a complex decision. Some observers recommend sleeping on a decision after reviewing the key factors around the decision, but there are other ways to engage the unconscious mind as well. Rest, play, meditation, or even taking a shower may do the trick. In any case, reflecting on a decision won’t require much additional time; a day or night should be sufficient.
The other good reason for waiting on a decision is to gather data and analyze it. There has long been evidence across many decision domains that data- and analytics-based decisions are more accurate than those made by human intuition. However, it takes a lot of time to gather data, and some more to analyze it. But if it’s an important decision and the data exists somewhere, it is probably worth the trouble to employ a data-driven decision-making approach — particularly if it’s going to be made multiple times.
Determine How Often the Same Decision Will Be Made
Whether and how often a decision is repeated is also an important factor in the speed of decision-making. If the decision is one that’s made often — for example, pricing, inventory reordering, or hiring decisions — it may be worth investing in an analytical approach. Decisions that are repeated often are also likely to generate data; capturing the inputs to the decision and the decision outcomes makes it possible to produce a model that optimizes positive results. The first time a repetitive decision is treated analytically, it will be time-consuming to gather and analyze the data to create a model. But it’s worth taking this extra time up-front, since every instance of the decision thereafter can be made much faster and with a high degree of accuracy.
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Decisions that are both important and rare are often quite strategic, such as “Should we change our business model?” or “Should we acquire our biggest competitor?” It may be possible to acquire some information related to these types of decisions, but probably not enough to create an analytical model. Such decisions are worth spending some time on, but after they’ve been viewed from a variety of perspectives, they’re not likely to get better with time. Waiting too long to make the decision may mean that the opportunity passes you by.
Look into Buying an Option
If a strategic decision involves a lot of uncertainty and you can’t make it after some deliberation, one approach to easing the process is to buy an option from which you will learn more.
Options are well-known in investing, where buying an option gives the investor the right to buy an asset at a particular price in the future. In decision-making, it means taking a small step to learn more, before making a call that could significantly impact your people or the organization. For example, instead of acquiring a company, buying an option might mean creating a partnership or investing a smaller amount in the company than the cost required for a purchase. Buying an option as a decision-making approach can both ease and speed up the process for important decisions, and can result in a better eventual outcome if the decision maker takes advantage of the learning opportunities the option provides. Keep in mind, of course, that buying an option shouldn’t be an excuse for avoiding or delaying substantial action that your organization needs to take.
Put a Clock on Your Decision
Finally, if you find yourself struggling to make a choice, assign a deadline by which it needs to be made. You can quickly assess this time line when you are first facing the decision or after you’ve deliberated. This is one of the most important components of your meta-decision analysis, because the due date for a decision will guide many other aspects of your approach. It determines, for example, whether you can employ data and analytics, whether you should involve more people, whether you can study the issues thoroughly, and even whether you can sleep on the decision overnight.
Several of the ways to improve the timing of decisions that I’ve mentioned suggest an organizational process for decision-making, rather than relying on individual approaches and whims for every decision. While an organization can get carried away with decision bureaucracy, in general it’s wise to not leave important decisions totally up to individuals — even the CEO. Good decision-making only happens through the use of effective methods, ex post facto analysis, and reflection about how to improve. Putting a clock on decisions and monitoring how long they take are also actions that organizations are likely to be better at than individuals.
Yes, it’s important sometimes to just make that decision, but not at the expense of systematic thought about how best to go about it. By taking these steps and strategically deciding how to decide, you’ll find that you can break out of indecision and finally move forward.
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