Excerpts from “The unwritten laws of Business”
Making decisions is the most difficult and important part of manager's job. Some managers have a terrific struggle deciding even minor issues, because they never get over being afraid of making mistakes. Few principles that will help in decision making :
1. Decisions will be easier and more frequently correct if you have the essential facts at hand. It will therefore pay to keep well-informed and to bring out the relevant facts before attempting a decision. Sometimes you may not have all facts and are still expected to make a decision , when in doubt ask yourself "Am I likely to lose more by giving a snap judgement or by waiting for more information?.
2. You do not have to be right every time. It is said that a good executive needs to be right only 51% of the time, although a better percentage will serve you better.
3. The very fact that a decision is difficult usually means that the advantages and drawbacks of the various alternatives are pretty well balanced, so that the net loss cannot account to much in any event. In such cases it is frequently more important to arrive at some decisions - any decision - promptly than to arrive at the best decision ultimately. So take a definite position and see it through.
4. It is futile to try to keep everybody happy in deciding issues involving several incompatible points of view. By all means give everyone a fair hearing, but after all parties had their say and all facts are on the table, dispose the matter decisively even if someone's toes are stepped on.
The following criteria are helpful in choosing a course of action when the factors are indecisive; ask yourself these questions:
Does it expedite and forward the undertaking, or does it only produce procrastination and delay?
Is it fair and square and aboveboard?
Is it line with established customs, precedence, or policy? A good reason is generally required for a departure.
Is it line with a previous specific decision or understanding?
What are the odds? Can we accept the risk ? How does the possible penalty compare with the possible gain in each of the alternatives offered?
Do not allow the danger of making a mistake to inhibit your initiative to the point of "nothing ventured, nothing gained". It is much healthier to expect to make mistakes, take a few good risk now and then.
Leadership in Practice
When the founder and CEO of a leading e-commerce and cloud company decided to launch Web Services (their cloud services division) in the early 2000s, the path was far from clear. The company was primarily an online retailer with no expertise in enterprise cloud computing, and the move would require massive capital investment in infrastructure with uncertain returns. Internal skeptics questioned whether the company should distract itself from its core retail business. The founder didn't have complete information about market demand or competitive response, but he had enough data points: the company had built robust internal infrastructure to handle peak loads, other companies faced similar challenges, and waiting for certainty meant competitors would capture the opportunity. The founder made the call in the mid-2000s to launch their cloud services division publicly, despite incomplete market validation and resistance from those who wanted the company to focus exclusively on retail. The decision wasn't universally popular internally, and it stepped on toes of those invested in the status quo. Yet the founder applied his famous "two-way door" principle-if it failed, the company could retreat. More importantly, he understood that the cost of delayed action exceeded the risk of being wrong. Today, their cloud services division generates over billions of dollars in annual revenue and accounts for the majority of the company's operating profit. The decision that seemed risky in the mid-2000s became obvious in hindsight-but only because the founder had the courage to decide when the outcome remained uncertain. His willingness to make a consequential decision with incomplete information, communicate it clearly, and execute decisively transformed the company from an online bookstore into a technology infrastructure giant.
Leadership Framework
**The RAPID Decision Framework**
Implement this five-element structure to accelerate decision quality and build leadership respect:
**1. Recognize the Decision Type**
Categorize each decision as reversible (two-way door) or irreversible (one-way door). Reversible decisions require 70% confidence and rapid action; irreversible decisions justify deeper analysis but still demand a deadline. Most decisions are more reversible than leaders assume.
**2. Assemble Essential Facts, Not All Facts**
Identify the 3-5 critical data points that genuinely matter, then set a hard deadline for gathering them. Distinguish between information that changes your decision and information that merely confirms what you already know. Stop researching when additional data yields diminishing returns.
**3. Process Diverse Perspectives**
Create explicit space for dissent and alternative viewpoints, but timebox it. Use "disagree and commit" protocols: everyone gets heard, but once decided, everyone aligns. This builds psychological safety while preventing consensus-seeking paralysis.
**4. Implement Decisively With Clear Communication**
Announce decisions unambiguously with supporting rationale, expected outcomes, and success metrics. Assign clear ownership and timelines. Ambiguous decisions create confusion; clear decisions enable execution even when people initially disagreed.
**5. Document and Learn**
Track your decisions and outcomes systematically. Review both successes and failures quarterly to calibrate your judgment. Leaders who learn from their decision patterns improve their accuracy rate significantly over time.
**Critical Success Factor:** The greatest danger isn't making wrong decisions-it's creating a culture where people avoid deciding. Model comfort with uncertainty, reward thoughtful risk-taking even when outcomes disappoint, and address decision paralysis more firmly than decision errors.
"In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing." — Theodore Roosevelt
Comments