You are here: Home   »  Product Development  »  Bad Decision or Wrong Decision – There’s A Big Difference
img

Bad Decision or Wrong Decision – There’s A Big Difference

by Paul Forsythe

in Product Development

We all make hundreds of decisions every day.

None of us gets them all right and, fortunately, the decisions we get wrong aren’t usually life-changing. If we’re rational about it, we learn from our mistakes and move on.

It would be great if we could make the right decision every time but reality says that we won’t.

We don’t have the time to get perfect information and I’d even go as far as saying that the wealth of it on the Internet can make it more difficult to take clear decisions within deadlines. Not all of the information is reliable, opinions and facts can be confused, and when do you stop looking ?

If other people are involved, of course, we can never know for sure what they really want or how hard they will fight to get it. In fact, I reckon that if we get two decisions out of three correct we’re doing pretty well. We just have to make sure that they include the ones that are really important to us. There are plenty of systems available to improve the odds. I like my clients to first become familiar with thinking creatively so that they have more options to decide between.

I’d like to relate a story to illustrate the difference between wrong decisions and bad decisions. Wrong decisions are the ones that we take when we’ve looked at all the options, decided what’s best and it just hasn’t worked out. For example, we researched a car, bought from a reputable dealer, found it great to drive but a few hundred miles later the transmission failed. A bad decision would be cancelling the breakdown insurance.

A few years ago, a company I was involved with was closing its manufacturing business in the USA.

Among the equipment was a European-built machine that was perfect to meet the requirements of its European subsidiary. The project manager involved estimated that the cost of the team of engineers for three weeks to dismantle the equipment, the crane hire and replacement of all the electrical equipment would be about $200 000 – about the same as a new machine. It was therefore auctioned as a fire sale and raised $12 000.

He knew that I had personally installed and commissioned the equipped. If he had thought to ask, I could have told him that three of us had installed it over a weekend with the aid of a fork-lift truck and some skates. Conversion of the electrics to European specification involved flicking a switch in the control cabinet.

At the heart of most bad decisions, is a failure to ask some key questions :

  • What are the worst possible consequences if the decision is incorrect ?
  • How likely is the decision to be incorrect ?
  • Are the consequences and the risk acceptable ?
  • If not, what can we do to reduce them to an acceptable level ?

As the story above illustrates, however, there is another question that should be asked right at the start of any decision making process :

  • What are the facts and where is the most reliable source ?

Don’t let over-confidence lead you into making this mistake

If you would like to discuss this subject further, please contact me via the link below and also receive my report Ten practical tips to find original answers to any business problem”.

Previous post:

Next post: