They teach decision sciences in business schools. Those of us doing business, either as entrepreneurs, business owners, or careerists, talk a lot, and think a lot, about business decisions. We all want better business decisions. I’ve taken some of those courses and heard a lot of the talk, and I’ve survived running my own business for a lot of years. Here are five tips I’ve come up with.
1. Know when time isn’t money … it’s information.
Don’t get pressured into fast decisions. Decisiveness is not just deciding fast; it’s deciding well.
Step back and think. If there is more information coming, and no penalty for waiting, then wait. More information is better. You may have little penalty for waiting, and more information available to you. For example, wait until you land the contract before you change the website. Wait for more sales to clear the pipeline before changing the messaging.
2. Live comfortably with uncertainty
No amount of data and research can completely eliminate the doubt about what’s going to happen. Don’t expect to know for sure, ever, when it’s about what will happen, as opposed to what did happen. Almost all of forecasting is using the past, or sample data, to predict the future. Get used to it.
Work for the educated guess. Make your guesses as educated as you possibly can. Yes, do the research; but don’t just believe the conclusion. Don’t just go by the proverbial seat of your pants or gut, without tempering that with information. But don’t ignore your gut either. Consider alternatives.
3. The crucial difference between wishy-washy and insightful
Smart people change their minds. Thoughtful people change their minds. What’s supposed to happen is that new information prompts new thinking, and what you had thought before might be revised by what you know now.
Never assume that what has always been true is still true. Never assume that what has never worked in the past won’t work now.
4. Use your whole brain
The whole left brain vs. right brain theme is probably a myth, according to the research that turns up with a simple web search. We all use both kinds of process, the gut (or heart, or intuition) and the rational (or logical, or mathematical). But some of us purposely try to block one or the other side as we look at decision making for business. For every go-with-the-gut suggestion there’s somebody else saying let’s go with the data, or the research.
Use both. Respect both. Let the data temper your gut. Use the “let’s sleep on it” method sometimes. Let the decision percolate, or simmer. Write it out, think, dream, meditate, and see what your brain says.
Be careful not to let the data or the research do the decision on its own, when it doesn’t check with your intuition. It takes people to make good decisions, incorporating both research and experience.
I’ve encountered several times the delightful phenomenon of people mapping decisions with spreadsheets, trying to make it all math and logic … and then skewing the results with intuitive inputs to the spreadsheet variables.
5. Give up on democracy
Remember the old adage that when committees choose colors, every wall ends up beige. In the early days of a startup, everybody shares decisions. As a business grows, it develops functional expertise. Good decisions aren’t made by committee. Let the marketing people decide the colors for the packaging, and the finance people decide how to fund working capital. And the owner, ultimately, has to decide strategy. Consensus is comfortable in the beginning, but doesn’t work on the long term.