This post is based on an article by Richard Levin, of LEVERAGEDWISDOM, a peer-to-peer learning organization for CEOs of privately held businesses who want to build the equity value of their enterprise while creating a better life/work balance.
Process Choke Point: Indecision is a Decision.
Being CEO/Owner means you have to make decisions in a timely and effective manner.
Yes or No…Heads or Tails…Left or Right.
However, too often, leaders insist on more information and more time…more meetings and more opinions, more of this and more of that.
Bottom-line, if the decision process takes too long it becomes a Choke Point.
Collin Powell, former Commander of the U.S. Armed Forces and Secretary of State offers the following structure for timely decision-making:
- Part I: “Use the formula P=40 to 70, in which P stands for the probability of success and the numbers (40 to 70) indicate the percentage of information acquired.”
- Part II: “Once the information is in the 40 to 70 range, go with your gut.”
Acting with less than 40% of the information would be careless and any more than 70% means it’s too late and the opportunity has passed by. In other words, if the path forward has become inevitable then someone else is most likely way ahead of you.
The best decisions advance and re-enforce your vision. Therefore all decisions have to be about where you’re going, not where you are or where you’ve been.
Every resource that is deployed, time, money, personnel and every marketing, sales and PR strategy must be measured against a return on the vision. Therefore all decisions have extraordinary clarity in that they must help increase the equity value of the business.
Additional perspective on your decision making can be gained by imagining yourself 6 months into the future, looking back. From the perspective of time shifting, ask yourself is there something else I wish I had done or regret was done.
At LEVERAGEDWISDOM, the CEO/Owner Members have committed to running their businesses to increase the equity value of the enterprise…this is their vision. In this scenario, every expense is an investment for which the owner is looking for a return that enhances the value of the business. When an Opportunity or Issue is worked on by Members in a LEVERAGEDWISDOM meeting, the decision-making process always ends in an Action Statement by the presenting CEO.