Are you a confident and proactive decision maker? Today, I’m talking about decision avoidance in the face of uncertainty, and how this can affect your business.
Decision paralysis is a state which occurs when a person assigns so much risk or uncertainty to any decision that warrants action… that they avoid making a decision altogether.
All decisions – to some degree – involve risk. We know that there are bad outcomes, and good outcomes. But, we can’t know for certain which outcome we’re going to get until we bite the bullet and act.
When the stakes are high, people are guilty of clinging to the status quo like a worn-but-loved security blanket.
In fear, we instinctively rank our current, familiar environment as being preferable to the dangers of the “unknown”. Even when that “familiar environment” is somewhere less than ideal.. like the attic of a burning house, or the engineering deck of the Titanic.
Many Founders fail to properly appreciate the risks associated with this indecision and inaction.
Decision paralysis is crippling, and it could sink your business faster than you can say “Iceberg Ahead.”
Making decisions when things don’t go to plan
When faced with unfavourable situations and difficult choices, the worst decision you can make is no decision at all.
What so many of us fail to realise is that refusing to make a decision, is in itself – a decision. In choosing not to act, we’re effectively choosing to maintain the status quo.
If the status quo is not what you want it to be… this is never a good thing.
Imagine you just found out you’re going to lose your main customer in a month’s time. Suddenly, a large portion of your staff are left with no work to do, and are not making you any money. As far as you can tell, you have two actionable choices:
- Try to find your team new positions. You’ll be living up to your duty of care, but advertising their availability will expose the fact that your business is struggling.
- Let some of your team go to make up for the revenue shortfall. This would mean letting your employees down, but you’d be able to keep operating smoothly with minimal reputational damage.
You also have a third decision… “inaction”. You could do nothing and hope for the best. Let’s face it, choices number 1 and 2 both open doors to the dreaded “unknown”, and how can you possibly know how things will pan out?
Isn’t it just safer to do nothing and hope you manage to pick up enough new business to keep your entire team on board?
Even if you know, instinctively, that doing nothing is not the right course of action, decision paralysis sets in. Fear of the unknown keeps you rooted to the spot, with your head buried in the sand.
Before you know it, time has run out. The problem didn’t miraculously solve itself…. and you’re left with the worst possible outcome. In the example I’ve just given, that would be:
- You didn’t pick up new business
- You now have no option BUT to let your team go, and to make matters worse…
- You are doing so without giving them any kind of a notice period
In option 1 or 2 you’re making a decision to change course. It may pan out well, it may not. Whatever the outcome, you will have learned something by doing something new. And as we know, learning precedes growth.
In truth, calculated decision making rarely results in complete disaster. Whereas standing still, like a deer in headlights, often does.
Going back to that example…
The 3-choice example I’ve just given you is actually taken from the real-world experience of last week’s guest Jeff Hunter. Back in 2018, he faced an almost identical situation.
Should he find new roles for his team? Let them go with notice? Or stick his head between his knees and hope for the best?
Having experienced the negative impact of inaction earlier in his career, Jeff quickly rejected decision paralysis and made a calculated choice.
He chose option 1. He advertised his team’s availability via social media, even though he was exposing his business difficulties in the process. The outcome was better than he could have imagined.
Not only did he find new positions for every available team member, his decision to live up to his duty of care earned him and his business a great public reputation. He ended up growing his business – quite considerably.
Making decisions is essential to growth, and longevity
As a Founder, the success of your startup depends on your ability to make calculated, timely decisions. Growth is essentially a form of change, and it’s IMPOSSIBLE to change without making decisions.
The world of business is constantly shifting. If you want to be around for the long haul, you must be prepared to shift with it.
According to the American Enterprise Institute, only 12 percent of fortune 500 companies from 1955 were still in operation in 2016. Failure to adapt to rapidly changing markets, and inevitable periods of economic uncertainty, led these once dynamic businesses to fall by the wayside.
I wonder how many of today’s fortune 500 will be around in another 60 years’ time? Whatever the percentage, it’s safe to say it will be the companies guided by leaders who are willing to embrace calculated risk when making key decisions.
As Theodore Roosevelt famously said, “In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do – is nothing.”