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Business Unplugged™
This blog features Carol Roth's tough love on business and entrepreneurship, as well as insights from Carol's community of contributors.

The Horseshoes and Hand Grenades Guide to Business Decisions

Written By: Nicole Fende | No Comments

In my dark, nefarious past as an actuary, there was an insidious disease called Analysis Paralysis.

The person afflicted became so obsessed with analyzing every possible scenario and variable that they became unable to make any decision at all.

Unfortunately, this terrible sickness can affect anyone, even people who hate numbers and normally shun long involved studies.

Those suffering from Analysis Paralysis are like a deer caught in a car’s headlights.  Unable to take action, they get struck down.

Find out if you have it and how to cure it today.

Do You Have Analysis Paralysis?

  • Although you’ve analyzed at least 34 different possible scenarios, you still think you need to review a few more before you take action.
  • You need to make a decision about a new software solution, but you haven’t looked at how it will affect the last 1% of your clients (who haven’t purchased from you in at least 12 months).
  • You’ve asked “what if” over 73 times about the same simple decision.
  • Someone asks what you’d like to serve for lunch at the seminar you’re organizing.  Your response is that it will take at least a week and two surveys to get back to them.

If you’ve answered yes (or a long drawn out noooo because it isn’t exactly like your situation) then you are suffering from this disease.

You have Analysis Paralysis.

What drives this behavior?  Often, you are so focused on not making the wrong decision that you fail to act at all.  Perhaps you are concerned that you are overlooking one really important fact that could change everything.  Or you simply are not sure of exactly how others will react.

Like the deer blinded by headlights on the highway, the outcome for this behavior is not promising.

The hard, cold truth is that life is uncertain.  Although it pains this numbers geek to say it, even the most well-crafted, well-thought-out model is still a guess – a really educated guess, a guess built on a complex, multipage spreadsheet that does everything (except windows).  But it is still a guess.

Treating Analysis Paralysis

Does this mean you get to just throw out a number and run with it?  No.

Here’s the other danger of Analysis Paralysis: you can’t just stop evaluating decisions.  Imagine if you did.  For instance, if the deer in our earlier example immediately jumped out of the way, and right into oncoming traffic.  Not good.

Yet, choosing not to act at all could get you splattered too.

Here are some questions to consider before you act.  They will help you understand the impact, but not let you get tripped up with the minutia.

  • How will it affect your top 20% of clients?
  • How do you expect this change to affect your profits (rough guess is fine)?
  • If you feel that you have covered at least 80% of the likely scenarios, what else are you waiting for?  Will that information really make an impact on your decision?

Close Enough!

Often business decisions are like playing horseshoes or lobbing hand grenades, close is good enough.  If a small horde of invading barbarians is rushing your position, do you:

  1. Close your eyes and ponder your various options?
  2. Throw a hand grenade at them?

Choosing (a) means getting captured and maybe even killed.  Choosing (b) should stop at least some, if not all the invaders, increasing your chances of survival.

The next time you are struggling with a decision, I suggest you open your eyes to check for barbarians.

Please share a time that you have suffered from Analysis Paralysis.  How did you overcome it?  Or if you didn’t, what was the result?  Let us know in the comments below!

Article written by
Nicole Fende is The Numbers Whisperer™. Her mission is to free small business owners from the fear of finance and humor is her weapon of choice. In her new book, How to be a Finance Rock Star, Nicole draws on her worldwide experience in companies large and small to help businesspeople overcome their fear while making finance fun. Want to give your finance fears the boot? Sign up for Nicole’s free eCourse.