Decisions should usually be made quickly to accelerate action and learning. But sometimes, it really is smarter to take your time. Here’s how to decide.
We all know that startups should make decisions quickly. Fast decisions lead to rapid action, which accelerates the loop of production and feedback, which is how you outpace and out-learn a competitor, even one that already has a lead.
But some decisions should not be made in haste. For instance, hiring a key executive, determining a pricing strategy, deciding whether to raise funds, considering the investment of millions of dollars in a new product line, or evaluating the entry into a new market
How do you know when your current decision should be made slowly: contemplative, collaborative, deliberate, data-driven, or even agonizing?
The following scorecard will help you know whether it is wiser to go slowly:
You’ll Make a Much Smarter Decision Later
Today we know the least that we’re ever going to know. Often, waiting six months doesn’t automatically give us more information, but sometimes it does. If we haven’t launched a product yet, we’re in no position to decide what the next few features should be; we should launch and earn experience through customer interactions. We’ll then be much smarter about answering that question.
So, don’t waste time even thinking about it now, and certainly don’t make any firm decisions when you know you’ll make a better one later.
Irreversible Decisions (one-way door) cannot be undone once made or have high costs associated with reversing them. An example of an irreversible decision could be selling a family-owned business. Once the business is sold, it's typically pretty hard to get it back.
This is the classic one-or-two-way door delineation. If you can't easily undo the decision, it's worth investing more effort into analyzing the likelihood of the upsides and risks.
Some things take less time to implement than to estimate or to debate (like Sand in Rocks, Pebbles, Sand model). It might take two engineers one week to implement something, but a few debates and a time-boxed research project could involve an entire team for a week. This is why small teams without processes can produce results faster than larger teams with processes. If the effort to implement the decision is smaller than the effort to make a decision, just knock it out. But if you're deciding on a path that could take six months to measure results from, taking the time upfront to research is wise.
No Compelling Event
When there's no compelling event or urgency for change, maintaining the status quo may be acceptable, and there may be little to no pressure to make a decision quickly or at all.
Without time pressure, it's justifiable to spend more time on the decision. Conversely, time pressure means the more time you spend deciding, the less time you have for implementation and unanticipated problems, so you're actually adding risk by dragging out the decision.
Not Accustomed to Making These Kinds of Decisions
Online marketing teams are used to making swift creative decisions as part of the day-to-day reality of their job. Their expertise allows them to quickly decide whether to try new advertising campaigns on emerging social media platforms or experiment with different headlines without overthinking.
On the other hand, many organizations lack experience in making major decisions, like changing pricing or making acquisitions. Similarly, many founders struggle with hiring top-level executives or deciding whether to invest a significant sum in a new product line. They got used to "just throwing something out there and iterating" approach that worked during their company's early stages.
When the organization has never made this type of decision before, the decision is at great risk, and being more deliberate with research, data, debate, or even outside advice, is wise (although it can be plagued by survivor bias).
Don't Know How to Evaluate the Options
Even after generating the choices, does the team understand how to analyze them? If the company's strategy & goals are clear and detailed, if relevant data is at hand, and if the team has enough confidence, then obviously, the decision could be easy and fast. If these things are absent, perhaps more deliberation is needed to clarify them.
Hard to Measure Incremental Success
Once a decision is made and actions begin, can you clearly and objectively tell if things are on the right track? If so, it becomes simpler to make adjustments or even alter the decision when confronted with reality.
But if progress is invisible or subjective, such that you will sink tons of time into the implementation before knowing how things are going, it's worth to put more effort into gaining confidence in the path you've selected.
Buying a house is nerve-racking, mostly because it is likely the most expensive and difficult-to-undo purchase of your life. But also because you know so little about it. What does the seller know but isn't telling you? What will you notice only when you've moved in or even a year later?
Often it is hard or even impossible to get the data or research you need to make an objective decision. When this is the case, it is sometimes wise to spend extra time gathering whatever information you can, maybe investing in reports or experts (which is what you do with a house).
Or you could look at it the opposite way: If it's impossible to get objective data informing the decision, then don't spend lots of time debating subjective points; just make the decision from experience and even gut-check. Many things are impossible to predict looking forward, so why waste time?
The Decision Requires Multiple Teams Who Haven't Worked Together Before
At WP Engine, we're extremely collaborative across teams. The benefit is that we work together for a common goal, taking care of the needs of support, sales, marketing, engineering, product, and finance, rather than solving for one department's goals at the expense of another.
But this also can make decisions more difficult because finding a good solution is complex, often requiring compromise or creativity. And these things require time. This effect is amplified if the teams (or team members) haven't worked together before and thus have less rapport, common language, and common experience. In that case, give the decision more time to breathe and develop because, really, you're giving people the time to build relationships and discover great solutions. It is a benefit to them as well as your organizational intelligence, which is a long-term advantage worth investing in.
How to Use Scorecards?
Actually, they are not scorecards because important decisions aren't a Cosmo Quiz.
- Don't use them as a rubric
- Don't score them 1-5
- Don't add them up in a spreadsheet.
Rather, honestly answer these questions, and by the time you're through, you'll have a good sense of whether a light touch, a quick decision is fine (which is the default answer) or whether you should take more time.
And depending on which pieces are problematic, you'll have a guide for what needs to be done next.
For example, if "Can't undo" is a big problem, could you rethink the solution so that it can be undone? Maybe by applying it only in one segment, investing more time in planning or preparation, creating a disaster recovery plan, or splitting up the decision so that part of it is reversible?
Or if "No compelling event" is a problem, maybe the best answer is to "not decide," i.e., don't spend time on this right now since you don't have to. Some people will be disappointed in the lack of a decision, but it's better to honestly state that "we can't figure out the answer right now" than to make a rash decision that does more harm than good. Or to invest time into the unnecessary decision at the cost of neglecting necessary work.
I hope this will help you to make the right decisions in the right way.
This article was previously published at A SMART BEAR
ABOUT THE AUTHOR
Jason Cohen is a four-time entrepreneur across 23 years. Launched both bootstrapped and VC-funded businesses, resulting in two successful exits and the creation of two unicorns. For the past 16 years, he's been sharing his knowledge and experiences on A SMART BEAR.