Musings And Dialogue On Entrepreneurs And Decision Making (Part 4)

The following backdrop and questions apply to this part of the series of musings and open discussion on entrepreneurs and decision-making (See Part 1, Part 2, Part 3. Note that there will likely be a total of six parts for this series with a recap summary of feedback at the end):

New research is uncovering differences in types of decisiveness – for example, someone who can’t decide which dessert they want after dinner may not be the same as someone who puts lots of research into buying a car. When does a lack of decisiveness come from the need to get more information, and when is it simply putting off a decision (procrastination)?

It is very hard to generalize. As context, my immediate gut thoughts are that, in general, there are both emotional (e.g., "in the moment") and rational factors (e.g., looking at data) that entrepreneurs need to balance in order to make good decisions. Successful entrepreneurs will tend to be those that either have good business instinct from prior experience in the industry or comparable market and have an ability to look at facts. Alternatively, successful entrepreneurs may be those that have exceptional, innate, outlier-type business instincts and abilities to judge and facilitate people which compensates for weaker abilities to in analyzing factual information systematically (alternatively they may partner with someone who has these skills). I think it would be the rarer exception for a successful entrepreneur to be someone who can only look at rational factors, but this could work in areas like the hard sciences where intellectual property and ability to appropriate profits is high.

With that as my frame, to the question "When does a lack of decisiveness come from the need to get more information, and when is it simply putting off a decision (procrastination)?" my thinking is:

  • If the entrepreneurial team has a balance of experienced emotional- and rational-based decision makers, then putting off a decision is procrastination when the team cannot articulate what additional information or context would be needed to make a decision.
  • Alternatively, if the entrepreneurial team is made up of primarily experienced, emotional-based decision makers, then putting off a decision is procrastination either when they have made similar judgment calls in the past with substantially less information and risk or when they do not identify what complementary resource they need to help with the decision (e.g., legal counsel).
  • Alternatively, if the entrepreneurial team is made up of primarily rational-based decision makers, then putting off a decision is procrastination (presuming context such as market timing is right) either when past experience and knowledge is needed (e.g., prior entrepreneur consultation or complementary resource such as sales VP) and not sought or when excessive analysis is performed.

The basic gist is that I feel that entrepreneurs procrastinate (presuming the market timing is right) to make a decision when neither can they articulate what additional information is needed to make a decision nor are they actively seeking the complementary resource (in terms of balancing functional and emotional/rational decision-making traits) that they need to make an informed decision.

What are your thoughts and experiences?

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5 Replies to “Musings And Dialogue On Entrepreneurs And Decision Making (Part 4)”

  1. That’s a great one. I find that it can be easy to focus on near-term stuff and regular business habit without stepping back and seeing whether goals should be changed.
    As another item, I just ran into an article about the “founder’s dilemma”, “where the founder doesn’t want to let go of certain aspects of the business idea for fear of not being in control” at http://www.businessweek.com/smallbiz/content/aug2009/sb20090828_793414.htm

  2. Seth Godin says to make “make a decision” a mantra http://sethgodin.typepad.com/seths_blog/2009/10/make-a-decision.html and that indecisiveness is usually the wrong decision. Although I agree with Seth on many items, in this case I am not convinced his argument is the right way to look at things, even for a snippet-type post. I’ve posted on this blog a number of situations where a bias towards making decisions too hastily can be bad. That said, I myself may be overly biased towards making decisions earlier than later – I find that unresolved decisions often “eat at me from the inside”.

  3. Entrepreneurs are prone to procrastinate, but a management consulting firm advising can exploit a particular market situation or employ a new marketing strategy.

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