At one point in my career, after I’d started, grown and sold a couple of businesses, I thought I knew everything there was to know about making good decisions. After all, I was a success! But it took me a few years to realize that, in many respects, I still had a lot to learn about making the best calls. Here are the lessons I learned the hard way back then about the tendencies and motivations of people who are making the worst business decisions of their lives.
Basing Decisions on Ego
If you think you know it all and that your expertise in a narrow field will translate to every other field, you’re just flat wrong. Assemble a team of folks whose experience rounds out your own and reap the benefits of multiple perspectives.
Relying on the Momentum Effect
There’s certainly some truth to the belief that past events can predict future events. The problem with this thinking, though, is that the world is constantly evolving. If you’re sticking with the tried-and-true and refusing to look at other options, you’re likely to misstep.
Entrepreneurs have to be hungry and curious. Make sure you’re looking at the whole picture, and at both the negatives and positives of any potential decision.
If you’re putting off making a choice, you can end up limiting your options down the road. You may be right, you may be wrong, but don’t let yourself get cheated out of success.
Going It Alone
You simply can’t understand all the options and complexities of a given situation on your own. Sometimes the best results come through compromise with a team you’ve assembled.
Making a decision is only 10% of the process. The other 90% is the actual execution of that decision. If you fail to communicate the reasons for your decision to your staff, neglect to plan or follow up, or simply drop the ball, you’re not getting the job done. Make sure you implement your changes in a thoughtful, logical way.
Seeing the Trees Rather Than the Forest
Good decisions are made with the big picture in mind. If you’re focused on putting out fires or only thinking about next week, you’re not going to be able to adequately plan ahead. Leave the short-term decisions to your trusted staff and devote your energy to the long term.
Not Balancing Your Sources
Abraham Lincoln was a great president, but it wasn’t just because he was a smart, thoughtful man. He surrounded himself with a cabinet comprised of his most bitter rivals, understanding the power of hearing from people other than “yes” men. Don’t fall into the trap of listening to sycophants who tell you only what you want to hear. By seeking out contrary opinions, you’ll avoid making decisions based on biased sources.
About the Author:
MIKE MICHALOWICZ (pronounced mi-KAL-o-wits) started his first business at the age of 24, moving his young family to the only safe place he could afford – a retirement building. With no experience, no contacts and no savings, he systematically bootstrapped a multimillion-dollar business. Then he did it again. And again. Now he is doing it for other entrepreneurs. Mike is the CEO of Provendus Group. He is also a former small-business columnist for The Wall Street Journal; MSNBC’s business makeover expert; a keynote speaker on entrepreneurship; and the author of the cult classic book The Toilet Paper Entrepreneur. His newest book, The Pumpkin Plan, has already been called “the next E-Myth!” For more information, visit ww.mikemichalowicz.com.