By Ed Rappuhn – SCORE Nashville
“I’m having a hard time making business decisions. There’s so much information out there, some of it conflicting, I just get stuck.”
You are suffering from a common ailment known as paralysis by analysis. I love this quote by Theodore Roosevelt, “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.”
When making decisions look at your business model to identify any potential unintended consequences. Does the decision require changing your value proposition, partnerships, customer segments, etc.? Then follow these steps:
Identify your choices. Remember, maintaining the status quo is one choice.
Consider the possible outcomes (benefits vs. cost) of each choice.
Establish the probability of each outcome.
Determine, based on the probability of the outcomes, which choice has the greatest value.
This analysis helps you make the choice with the greatest likelihood of success. With so much data available (and it’s growing exponentially), there will always be subjectivity in determining data accuracy, probabilities and cost/benefit ratios. There are rarely “perfect” decisions, but the goal is to make the best choice based on the information available.
When identifying possible outcomes, consider the worst-case scenario. If it’s reasonably possible that this will happen and you can’t live with the outcome, eliminate that choice. Sometimes a less profitable choice is better for your well-being.
The consequence of a poor decision is another consideration. For example, your choice of advertising media can be easily changed if the original decision doesn’t work. The consequence of selling part of your business is much more important and harder to reverse. In this example, the first decision can be made faster and with less analysis than the second.
Make sure that after an important decision is made, you continue to analyze the results. You can usually repair a poor decision with proper follow-up. If not, you can at least minimize the negative results or change direction.
If there is a moral or ethical issue with your decision, always take the high road. Then, even if things don’t work out the way you hoped, your business and personal reputations remain intact.
Consider getting an outside opinion. A mentor or counselor can help you view an important decision from a neutral, objective standpoint. Remember, the final decision is yours and you are ultimately responsible for the results, but someone with nothing to gain or lose can often provide valuable input.
Good luck with your decisions and remember “no decision” is still a decision, although often not the best one.
Ed Rappuhn is a mentor, workshop facilitator, and the past-chair of SCORE Nashville. SCORE mentors guide entrepreneurs in starting and growing their businesses. Sign up for a free SCORE mentor, find out about our reasonably priced workshops and other services, or volunteer to become a SCORE member at www.scorenashville.org.