The first decision-making step is determining whether a decision should be made at all. Many choices are made unnecessarily, which can cause a loss of decision-making resources, generate opportunity costs, and put a person or a company in a worse position than before the decision. Sometimes, postponing a decision will significantly expand decision-making options and greatly increase the probability of good decision-making outcomes. After reviewing decision-making pressures and the potential value of delaying choices, this article sets forth factors to consider when determining when a decision should be made.

Decision-Making Pressure and Larger Objectives

The decision-making process is affected by cultural pressure. Many people assume that making a decision, regardless of whether the decision-making logic is sound, is positive and postponing a decision is negative, even if not deciding helps avoid negative consequences.

A person who makes a decision, even if others are not ready to do so, is often perceived as more quickly grasping a situation and being able to deal with it. A person who waits to decide is often viewed as unable to understand what is occurring, afraid to commit to a course of action, and allowing a situation to worsen. These cultural pressures often push people to favor rapid decision-making processes over more deliberative ones.

Decision-making cultural assumptions often do not match decision-making consequences.

Yet, cultural assumptions about decision-making often confuse the decision-making process with decision-making goals. Decision-making is not an end unto itself; it is one of many tools to achieve a larger objective. If we are walking on a tightrope between two buildings, the goal is to get to the other side, not make decisions about tightrope walking. Decision-making is only helpful to the extent it improves the chances of making it safely to the other building.

The process of decision-making should not be confused with the goal of decision-making.

People and organizations often make decisions that, even though they sound like steps forward, do not advance broader objectives. Decision-making can reduce the probability that the broader objective will be achieved. Considering the tightrope example again, constantly making decisions making decisions about whether to go forward or turn back will likely direct energy away from the focus required to prevent from falling.

Decision-making can have other negative consequences besides not advancing a broader objective.

Misuse of decision-making resources. Decision-making, particularly for complicated matters, often requires a significant amount of time, energy, and resources: research has to be done; possible courses of action have to be outlined; and the advantages and disadvantages of different decision-making outcomes have to be considered. Dedicating resources to this process takes them away from other matters where they might be able to be used more productively.

Breaking thought and work flow. Productive thinking and work are often done in a state of flow when distractions can be blocked out, and a significant amount of energy can be focused on a single matter. If a person has to stop what they are doing to make a decision unrelated to what they are concentrating on, it often takes time to return to their previous state of concentration. This changing of concentration gears, particularly when it occurs at an organizational level when many people are involved, can cause many compounding inefficiencies.

Negative decision implementation momentum. Once a decision is made, many decisions require action to be taken. Once actions are taken, they can set in motion many dynamics that are hard to reverse. If a wrong decision is taken, negative momentum can continue for a long period and generate other negative consequences.

Decision-Making Traps

Apart from cultural issues, several dynamics often pressure people to make decisions that are not in their best interests.

False time pressure. The first dynamic that often forces premature decisions is time pressure. One of the oldest sales tactics in the world is to suggest that if a decision is not made very quickly, once-in-a-lifetime opportunities will disappear or highly negative consequences will have to be faced. While there are times when making quick decision is necessary or strategically useful, on many occasions decisions can be postponed indefinitely without any negative repercussions.

The Flyer’s Dining Dilemma. The second dynamic is what might be thought of as the Flyer’s Dining Dilemma. For many people, dinner time on a budget airline is not one of life’s culinary high points. The dining car rolls up to your aisle and you are asked, “Chicken or pasta?” You ask the steward for their recommendation and from their offering the remainder of the ketchup and other condiments they have, you realize that neither choice is good. While you are trying to watch what you eat and neither of these choices is healthy, you simply choose the pasta.

The Flying’s Dining Dilemma is by no means limited to budget airline flying. In life, we are constantly being asked to choose between two outcomes when neither outcome is in our interest. The Flyer’s Dining Dilemma occurs because it often takes far less energy to choose between two suboptimal options than to create an optimal one.

It often takes far less energy to choose between two suboptimal options than to create an optimal one.

The shell game and the inexistent ball. A third decision-making dynamic is the shell game. In the typical shell game, a person is presented with three shells and has to guess which shell hides the ball. In reality, however, the ball is not under any of the shells.

Why many decision-making options are not presented to perpetuate fraud, they often resemble shell games in that none of possibilities presented contain the solution to the underlying problem. While people are focused on the moving shells the problem can worsen and the solution can move farther and farther away.

The Economics of Optionality

Having addressed downsides of rushing into poor decisions and the pressures that cause this to occur, we will now look at the potential upsides of postponing decisions. This requires first considering the economic value of optionality.

Decision-making optionality has economic value.

The concept of optionality refers to the ability, but not the obligation, to do something. To take an example from finance, a stock option is the right to buy a stock in the future at a certain price. This has value because if the value of the stock increases beyond the strike price, we can exercise our option to buy it. If the price of the stock does not increase beyond this point, we can simply not buy it. Since the price of the option is fixed, and the price of the stock could be much greater than the stock price, a stock purchase option can be very valuable.

Optionality applies to every decision-making area. Any time you have the ability choose between multiple options, you gain if the one of the options becomes more valuable. For example, suppose that you can speak two languages, French and Italian. If job opportunities for French speakers decline, but the job possibilities for Italian speakers increase, the optionality has the value of what can be earned in the Italian job market.

Decision-Making Scenarios

All decisions represent the possibility of furthering the larger objective or setting it back the possibility of generating non-decision-related positive or negative consequences. This can be illustrated with three decision-making scenarios.

Scenario 1	Scenario 2	Scenario 3
Decision furthers objective/creates positive externalities	Decision furthers objective/does not create positive externalities	Decision does not further objective/does not create positive externalities

The key decision-making process objective is to increase the probability of Scenario 1 outcomes and reduce the probability of Scenario 3 outcomes. At times this can be done by making decisions in the present and sometimes it can be done by postponing decisions.

There are several issues that drive decision-making optimization dynamics.

Objective determination. To increase the probability of Scenario 1 outcomes, it is important to have a clear understanding of what the key priorities are. If there is no sense of this, every decision-making item can seem equally important. This makes Scenario 3 outcomes much more likely.

Time frame determination. The second step is to determine how urgent the decision is. If it is highly relevant to the key objectives or otherwise presents a major risk to a person or a company, it should be decided right away. If not, it is possible to potentially postpone the decision.

Postponement Considerations. If the decision can be postponed there are several factors to be consider.

What are current trends? Is it likely that the situation will get better or get worse?
The higher the likelihood that it will get better, the stronger the argument for postponing the decision.

What are the resources required to make a decision? Are these resources better spent on other matters? The more likely that resources can be used more productively on other issues, the stronger the argument for postponing the decision.

What is the likely consequence of implementing the decision? Is it possible to return to the status quo or will it be very difficult to return to the point before the decision was made? The greater the possibility of returning to the status quo and avoiding negative momentum issues, the stronger the argument for postponing the decision.

Conclusion

This article discussed issues related to pressure to make decisions and the value of postponing decisions. The next article in this decision-making series will address the components of a good decision.

Thanks to Yi Liu for the photo for this article from Unsplash. Beautiful Free Images & Pictures | Unsplash