We all make thousands of decisions every day – from the relatively small, perhaps inconsequential, ones such as what to wear that day, to the bigger, more impactful decisions about career choice or life style purchases.
We like to think every decision we make is right – based on cold, hard, logical fact and in some cases, extensive research. But that’s not always the case. Even when we take our time, think it all through, do the research and talk to those who have “gone down the road” other factors we’re not consciously aware of can shape our choices.
I’ve noticed that one of the biggest and most frequent issues is being over optimistic about the benefits of the decision – banking on a new product sales projection that shows constant increases or being too optimistic about possible cost reductions and synergies resulting from a merger or acquisition.
Big decisions tend to bring out confidence in our ability to understand and overcome the challenges that lie ahead. Unfortunately, unexpected issues and problems will pop up – usually at the absolute worst time.
While it’s unrealistic to expect to be able to plan for every eventuality and anticipate every issue, we can create check points or milestones to help evaluate if the decision is still valid and to ensure things are still happening as expected. At each milestone, especially early on, make sure the assumptions on which the decision is based are still valid – that the world hasn’t changed since the decision was made. If things are not where they were thought to be it’s time to take a good hard look to see how to get things where they need to be. Perhaps that doesn’t appear likely. Time to look for an exit?
An exit plan is a key aspect of a good decision making process. Prepared early in the process with clear trigger points, the exit should be ready to be implemented if the agreed circumstances emerge.
Decisions are always in front of us. With a little thought and planning before implementation, problems can transform into opportunities and problematic decisions can be salvaged before calamity strikes.
Harold Hay
Financial Management
Visit osborne-group.com for other ideas and opinions from our Principals on a range of topics. Their views are their own and do not necessarily represent The Osborne Group’s perspective. The Osborne Group provides interim executive management, consulting and project support across all sectors and over a broad scope of service areas.
