Good decisions are hard - sometimes it's cheaper to just flip a coin.
Today's tip is about decisions. The bottom line? If it costs more to research and make a decision than the impact that decision will actually have, flip a coin instead.
The Importance of Decision Making Management
In my first corporate job, we needed a laser printer for our programmers. The executives met to discuss it. After all, a $600 laser printer would only save twelve programmers hours worth of hassle. The marketing department had one, true, but then, they needed one. Otherwise, how could they print drafts of the billboard they erected, celebrating the company’s “Great Beginnings.”
In the end, they didn't buy the printer. The programmers would just have to make do. And at night, I lay awake wondered: was this somehow my fault? In retrospect, perhaps I overestimated my own importance.
But I didn’t overestimate the decision’s importance. The decision not
to buy the printer took four executives three one-hour meetings to
make. The executives made about $100,000 a year, apiece, which is $50/hour. Multiply by four executives and three hours, and we’re talking $600 worth of management time to make that decision. They should have just spent the $600 on the darned printer.
Why Decision Making is Important
This was the first time I saw that decisions cost money. And if it costs more to make a decision than the amount you’re deciding about, it’s more sensible to flip a coin or spend the money without further discussion. That's why some businesses don't even require receipts for small expenses when employees travel. It's cheaper to reimburse $5 than handle the paperwork to document the expense.
In my example, the cost was the executives' salaries, but indirect costs can mount up, as well -- costs of delays while the decision is being made, the cost of the distraction of having to make the decision, the cost of gathering information, and so on. And sometimes researching one decision leads you to expand the issue way, way too much.
Don't Waste Time
For example (hypothetical, hah!), imagine the motor in your front-
loading washing machine burns out for the sixth time, and you decide
to buy a new washer. You call a saleswoman and she recommends an $800 model. But you want to be sure you’re making the right choice. So you demur and research begins.