De­ci­sions! De­ci­sions! How do I make them? The core func­tion of a man­ag­er or en­tre­pre­neur is to make de­ci­sions. Some choic­es feel like kick­ing the tin can down the road. It may make sense, as some de­ci­sions are bet­ter made to­mor­row. Some, how­ev­er, are just keep­ing the firm from be­ing more com­pet­i­tive. While it shows up on your to-do list or cal­en­dar, it’s just a pend­ing mat­ter.

De­ci­sion dilem­ma

When Shan­non, a so­lo mar­ket­ing con­sul­tant, hit $4,000 a month, her growth stalled, and her bills kept pil­ing up. For six months, she wres­tled with two de­ci­sions: should I fo­cus on for­eign clients or find a new lo­cal niche? She kept “re­search­ing al­ter­na­tives” and tweak­ing her mar­ket­ing emails, but nev­er made clear calls—the re­sult: scat­tered mes­sag­ing, un­der­priced re­tain­ers, and a half-full sales pipeline.

Af­ter fi­nal­ly de­cid­ing on a niche strat­e­gy tar­get­ing fast-food re­tail­ers, set­ting a $1,500 min­i­mum re­tain­er, and fo­cus­ing on In­sta­gram, our solo­pre­neur signed three ide­al clients in two months. Her rev­enue dou­bled not be­cause she found a new tac­tic, but be­cause she re­duced de­ci­sion drag and start­ed ex­e­cut­ing. Luck­i­ly, she re­ceived feed­back from her men­tor on her in­de­ci­sive­ness.

Pro­cras­ti­na­tion dri­vers

To ad­dress de­ci­sion re­sis­tance like Shan­non’s, we must con­sid­er the fac­tors that in­flu­ence it. Of­ten it has psy­cho­log­i­cal dri­vers that we ig­nore or don’t want to ad­mit. De­ci­sion drag is the cost of a de­layed or avoid­ed choice. You sit on the fence with de­ci­sions, such as test­ing a new idea, fil­ing your tax­es or de­lay­ing a price in­crease. The ef­fect shows up as a loss of rev­enue, a stalled project, and a high­er cost of main­tain­ing the sta­tus quo. By de­cid­ing lat­er, there is an op­por­tu­ni­ty cost of stay­ing in the com­fort zone.

One rea­son we avoid mak­ing a de­ci­sion is the fuzzi­ness of its im­pact. The hu­man mind does not like un­cer­tain­ty be­cause it may hide threats, af­fect­ing our sur­viv­abil­i­ty. At oth­er times, we feel that try­ing this in­no­v­a­tive idea could af­fect our self-im­age, since its fail­ure could ru­in our rep­u­ta­tion as as­tute en­tre­pre­neurs.

The rea­son for mov­ing out of the com­fort zone is for a bet­ter deal. If the re­wards are un­clear and the in­vest­ment is un­cer­tain, then wait­ing for more in­for­ma­tion is the pre­ferred choice. De­ci­sion anx­i­ety sets in when the fear of fail­ure could snow­ball in­to a cat­a­stro­phe. Cat­a­stro­phiz­ing is a cog­ni­tive dis­tor­tion that can be ei­ther a mag­ni­fi­ca­tion of some­thing or a domi­no ef­fect of an out-of-con­trol present de­ci­sion.

En­tre­pre­neurs are of­ten stressed and tired. Since the brain re­quires a larg­er share of our en­er­gy, chal­leng­ing judge­ments can po­ten­tial­ly suck even more out of us. The best course of ac­tion is post­pone­ment. Burnout can be par­tic­u­lar­ly harm­ful when we are men­tal­ly tired from stress.

De­ci­sion ma­chine

Some de­ci­sions aren’t made for the present, or shouldn’t be. Some­times we fall in love with mak­ing judg­ments when none is need­ed. At times, the best de­ci­sion was not to make one. When Coke de­cid­ed to change its for­mu­la in 1985 to a sweet­er ver­sion to bet­ter com­pete with Pep­si, it led to a back­lash. They quick­ly re­alised that they were tam­per­ing with an Amer­i­can icon.

Some de­ci­sions should have a re­ver­sal op­tion built in. The Co­ca-Co­la com­pa­ny did not know that a very risky de­ci­sion re­quires some risk man­age­ment. They should have kept the old brand and in­tro­duced a sweet­er one.

De­ci­sions re­quire a cer­tain lev­el of cog­ni­tive ab­strac­tion. It is not the same as Al­bert Ein­stein work­ing through his equa­tions for the the­o­ry of gen­er­al rel­a­tiv­i­ty; the num­bers in en­tre­pre­neur­ship re­quire some guess­work and cal­cu­lat­ed risk-tak­ing. How­ev­er, one way to de­cide in an un­cer­tain sit­u­a­tion is to do a busi­ness ex­per­i­ment. Test your idea with lim­it­ed re­sources, as­sum­ing it will be a learn­ing event in a worst-case sce­nario.

A de­ci­sion with­out a dead­line is a wish. Not on­ly do you set a goal, but con­sult with your team or a men­tor if it is a dif­fi­cult de­ci­sion, as Shan­non did. Of­ten, the de­ci­sion-mak­ing process re­quires dif­fer­ent per­spec­tives; a team mem­ber with a re­tail back­ground may see shelf life as af­fect­ing mer­chan­dis­ing sched­ul­ing and, there­fore, the trade’s ac­cep­tance of it.

Some­times the so­cial crit­i­cism can be a huge over­hang. To in­crease your chances of suc­cess, you should break the de­ci­sion down in­to small­er pieces, as project man­agers do. If you do fail, think about it as part of your per­son­al cur­ricu­lum, and your fu­ture tool­box will sharp­en your fu­ture de­ci­sion-mak­ing.

Fi­nal­ly, you should have a de­ci­sion-mak­ing sys­tem that clear­ly states the process for mak­ing choic­es. First, de­fine the goal for the ac­tion need­ed. If we have cramped stores and a call for a new lo­ca­tion in an un­der­served area, what course of ac­tion should we take? Sec­ond, what op­tions do we have? Can we ex­pand the ex­ist­ing lo­ca­tion’s space, open longer hours, sell more on­line, or con­sid­er a new branch?

Third, what in­for­ma­tion is re­quired to study each op­tion? Fourth, de­vel­op cri­te­ria to eval­u­ate each op­tion and as­sign weights to each; this is the next step. If the least risky op­tion that re­quires less cap­i­tal in­vest­ment is to ex­pand the cur­rent lo­ca­tion, then this might be the short-term de­ci­sion. De­ci­sions, how­ev­er, are made and of­ten re­vis­it­ed as new in­for­ma­tion emerges. If a va­cant build­ing is for sale in the pre­ferred lo­ca­tion, it may be worth ex­plor­ing. And the de­ci­sion-mak­ing process starts all over again.

When hu­mans make de­ci­sions, they can have some bi­as­es. Us­ing da­ta and soft­ware can in­fuse log­ic. Con­sult­ing in­de­pen­dent peo­ple can al­so take an im­par­tial per­spec­tive. An­oth­er is­sue is the lack of per­fect in­for­ma­tion, and while act­ing on what you have is some­times bet­ter than wait­ing for more in­for­ma­tion. Oth­er times, we have con­fi­dence in our as­sump­tions as they have worked in the past. The Coke brand was strong, but it does not have blind fol­low­ers.

De­ci­sions are at the core of a self-sus­tain­ing or­ga­ni­za­tion, and mak­ing them fast gives firms a com­pet­i­tive ad­van­tage. One ad­van­tage SMEs have is their agili­ty, which gives them the up­per hand when deal­ing with large, bu­reau­crat­ic com­pa­nies. En­tre­pre­neurs should nev­er com­pro­mise their de­ci­sion-mak­ing com­pe­tence, as it will rel­e­gate the firm to di­nosaur sta­tus.

Saj­jad Hamid is an SME & Fam­i­ly Busi­ness Ad­vi­sor Fel­low of the Fam­i­ly Firm In­sti­tute and au­thor of Build Your Lega­cy Busi­ness: Solo­pre­neur To Fam­i­ly Busi­ness Hero. He can be con­tact­ed at www.linkedin.com/in/saj­jad­hamid and at en­tre­pre­neurt­nt@gmail.com