Oftentimes l will have somebody come into my office and sketch something out pretty quickly and then look for a decision on the spot. Now if you don’t make the decision quickly you’re holding up progress but there’s always the risk that by making the decisions without the right information, you leave yourself open to down the road having a whole bunch of problems. So I think there are three big questions I like to ask myself before making a big decision. Some of them may seem obvious but it’s worth taking the time to ask just in case the person that is asking for the decision either a) hasn’t thought of it or b) hasn’t thought to share it.
- What’s the risk? - I put that question broadly and vaguely in hopes that the person on the other side will take a second and think about what are all the things that could wrong with this before they just move forwards. It’s surprising how regularly they’ll say something that makes me change the answer that I was going to give.
- What’s the cost? - This should almost always be followed up by: did you think about how much it’s going to cost? Too often people don’t think about internal resources having a cost. When you’re trying to make these decisions you have to take into account that there’s almost always some level of effort involved in it and you have to weigh that against what we’re going to get out of it. This is where I get to the next question.
- What do we get out of it in the near term and what do we get out of it in the long term? - So maybe that is two questions but I normally ask as what will we get out of it? From there I will break down it down further into those two parts. Again it doesn’t have to be all about near term benefit but it’s awfully nice to know that all the benefits aren’t all far out. The problem with benefits that are a ways out are that if it takes that long to get to where you’re going, sometimes the benefit is not enough to make that decision worthwhile. The other part of it is weighing the value of the dollar and the resources of what you have now vs. the benefit that is so far out in the future.
You don’t want to become somebody who manages everything in the near term of this quarter, this quarter, and this quarter. Although one of the nice things with managing with an eye towards the near future is that oftentimes things that build value now are things that will build proven value. They result in long term value on the basis of accruing things at a faster rate than the things that are 6 months, 8 months, a year, 2 years, 5years down the road. Certainly it’s important to build towards a larger strategic value as well, but I will say be careful of the allure of things that are only going to benefit you months and years down the road.
So those are my big three questions.
- What’s the risk?
- What’s the cost?
- What’s the benefit?
Those are pretty basic things that you should ask yourself before you ask for a management decision or make a big decision yourself.