Are you making foolish decisions in your business? Often we think we aren’t. We even judge other people for their foolish decisions never taking the time to step outside our own box to see our decisions from the outside looking in. Chances are you’ve made some foolish decisions yourself. The trick is to know what led to that a decision because it seemed like a good idea at the time.
It’s a well-documented behavioural phenomenon that slight errors in judgement, fueled by ego, lead people to “keep digging” long after it’s apparent that continuing to do so is a good decision. It has caused the downfall of many foolish leaders. It’s usually triggered by the false belief that spending more money will enable you to get your initial investment out (or what my grandmother called “putting good money after bad”).
From the outside, we think “How can someone be so stupid?” But when you are halfway down the hole and can’t tell up from down, it seems to make sense to try to keep on going. Essentially, it’s not one bad decision that leads to our downfall, but a series of tiny errors in judgement followed by one big failure to recognize that continuing down that path is at best foolish.
Sharpen Your CEO Smart Decision-Making Skills
Get ALL the Facts: This is where a lot of projects are doomed. In our excitement to get going, we neglect to slow down and gather all the information needed to make a good decision. Do your homework! Gather all the facts, ask lots of questions and then do a double check to make sure you didn’t miss anything.
Challenge Your Assumptions: Many a bad decision started with a false premise. Look for the possibly faults with your assumptions. Ask yourself, “What am i missing?” Don’t be afraid to get tough with your assumptions.
Establish Your Conditions: What has to go right for your project to be a success? Beware of projects with too many success conditions as it only takes one break in the chain to completely derail your a success. Aim for robust conditions that given you plenty of ‘back-up’ in case one condition doesn’t work out.
Monitor Results: The truest test of any decision is ultimately your results. Many “good on paper” decision fail the results test. Build into your project early milestones to gauge the results and plan on either adjusting or abandoning if it fails the test.
Watch for Changes in Conditions: Sometimes the bad decision isn’t a bad decision to start with, but instead becomes a bad decision because the business landscape changed. Monitor industry trends or the general business landscape for early warning signs that the conditions may be changing.
Ask for Feedback: Decisions made in isolation are difficult to put into perspective. Seek outside advice from a trusted mentor or business coach. Don’t take their feedback as a “Yes” or a “No”, but rather use it as part of your information gathering process to be factored in when considering your decision.
Decide When to Pull the Plug: Overcommitment is when bad decisions turn into downright foolish ones. Decide (in advance) when to pull the plug and stick to that decision. Remember, you made the decision when you were the most clear-headed. If you do decide to give yourself an extension, limit it to a 10% increase in time or money.
