Making a Decision - How Long is Too Long?
While successful businesses usually have a decision-making process that produces quality decisions, that process can falter, and often it is because too much time has been taken to make a decision. The process of decision-making should be a structure of business procedure, but the time spent in the process for any given decision should be based on the specific decision to be made. This determination is very much part of the art of decision-making.
When decisions take too long, the principal culprit is usually the fear of making a bad decision.
The decision-making policy of a business should demand the involvement of a decision-making group. In an attempt to involve the right people at the right time to make a good decision, that group should include experts with independent knowledge and opinions, involved stakeholders, and those asked to produce results. Now the decision-making group will not take responsibility away from the person authorized and responsible for making the decision, but it needs to be the primary resource for the designated decision-maker. Perhaps the most important acts of the group involve understanding and stating the nature of the decision to be made, how much information is to be gathered, the opportunities for correction, and the time considerations. The use of a decision-making group should be an important part of the decision-making policy of the business.
We understand that to make a good decision there must be information from the platform from which the decision is made and a means of supporting and executing the decision. This leads to a desire to obtain as much information as possible and to build consensus.
What you know today and how long will it take to know more? In his 2016 Letter to Amazon Shareholders (https://www.aboutamazon.com/news/company-news/2016-letter-to-shareholders), Jeff Bezos said, “most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow.” The wait for the 90% information threshold will be much longer than that to assemble the initial 70% of the information.
Often present is the desire to resolve any disagreement. Achieving consensus is a very time-consuming activity. The operation of the business's decision-making process when it produces consistently good decisions will mitigate against the desire for consensus.
These factors may be alleviated to the extent the business can recognize bad results and revise the decision appropriately. Few decisions cannot be ameliorated with corrective action. In a dynamic business planning process, decisions about goals, actions, monitoring, and revision are communicated to all involved immediately. Information can be shared and actions are taken within a framework that takes into consideration how long the decision-making process should take. This time consideration should be communicated on the format of the plan.
The first task of the decision-making procedure should be to define the time limitations existing for the decision process. In a dynamic business planning environment where the format of the plan communicates the goals, actions, monitoring, and revision of the plan, the time limitations applicable to a decision should also be stated on the plan format.