Bigger, better decisions

Man playing chess

Not all strategic decisions need the same amount of analysis.  This is something that many founders understand intuitively.  But it’s also something that becomes more complicated as a company grows.

Why?  Because the decisions get bigger and more complicated, what worked for a Big Decision in the past often doesn’t work for the Big Decisions of a bigger company.  In addition, the “decision environment” gets more complicated, with more potential participants and more dynamics among them.  Who do you include?  When?  How?  Who provides input and who participates in the decision?  How is the decision actually made?

What qualifies as a Big Decision?  Something where the payoffs are extraordinary – say, it could have an impact of 20% or more of a company’s revenue, or it could impact more than a third of the employees – and/or where the risks are extraordinary – say, it could take 20% or more of a company’s discretionary resources to implement.

Decisions fall on a continuum – as the stakes rise, so does the need to treat the decision more seriously.

And how do you do that?  As the decision gets bigger, you should add more information, more structure and process, and more focus and energy on the decision before its made.  If you don’t, you can be pretty sure you’ll be spending more time than you’d like or expect after the decision.