We spend a lot of time talking about financing here, but one thing oft-overlooked is the decisions that lead you to pursue or decline to go after financing. There’s a particular art to the decision that many businesses take years to master.
Or is it science? That’s the argument the Harvard Business Review made recently, making a strong case that far too many offices and far too many executives make decisions based on their “guts,” their “sense” or because “it’s the way we’ve always done it.” They ignore mountains of data compiled by members of their team and go with what they think will work best.
This is a little bit of a God complex manifesting itself, and it has the dangerous side effect of entirely de-coupling your decisions from reality. If you choose to spend a huge portion of your budget on promoting a product that the data shows simply is not popular anymore, you might look like a genius if that product takes off. More than likely, though, you’ll have made the wrong decision for the wrong reasons, which might include fondness for the product, a sense that you can succeed where others have failed or a bizarre desire to be contrary. Okay, hopefully not the latter.
Simply put, this is where many companies go astray. You owe it to yourself and to the rest of your company to carefully consider major decisions and not simply launch on them because you feel like it.
That’s not to say that instincts have no place in the process, because they do. We are instinctual creatures, and our gut feelings about whether something will or will not work are part of the consideration. You may have institutional knowledge that your younger employees armed with reams of data do not, which gives you knowledge they don’t possess. But make no mistake: Making decisions entirely based on emotions is a bad idea for your business.
Ultimately, your approach to making decisions large and small should be a mortar-and-pestle mix of your best judgment and data. Go without one or the other and you’ll eventually regret it.
What does your business decision-making process look like?
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