The Irrefutable Law of Decision Making

When we go to business school, we were trained to think rationally, using the full set of analytical skills and subject knowledge that we have been taught. Whilst it is not possible for us to be taught solutions to every possible business problem, the broad-based curriculum of most business schools prepares graduates to make informed decisions based on available data and possibilities. As a result of such education, many of us function methodically, and to a certain extent – logically.

Yet, when you start looking at some of the greatest inventions in the world, and some of the smartest business decisions in history, very often you will find that these flout the established ‘logic’ and ‘truth’ of the day. In fact, some of the greatest businesses of all times were built against what was then common sense, and defied conventional wisdom.

THE BEST BUSINESS WISDOM IS NOT EVEN WISE

When Steve Jobs re-joined Apple as its CEO after a stint outside the company, one of his first initiative was an odd looking all-in-one PC called the iMac – bucking the trend for ‘clones’ and customisation at that time. The result? The iMac became one of the best selling PCs of all time, and Apple today continues to lead the PC industry.

Similarly, when Genting founder Lim Goh Tong proposed to build a resort in a mountain far from the city, his closest friends thought he has gone crazy, and bankers stayed away from what they thought was an illogical, completely emotional decision. We know better now.

Employees and suppliers thought Ingvar Kamprad was not thinking straight, when one day he declared that IKEA furniture will be flat-packed and customers will have to assemble it themselves! Defied conventional logic, they sure did!

Sometimes, the wisest thing to do is not even wise at all. As entrepreneurs, we need to balance our entrepreneurial instinct with what we know to be logical. Once in a while, we need to act irrationally, defy logic, and let our instinct take charge.

TOO MANY CHEFS KILL THE BROTH

Like this famous proverb, sometimes, too much education kills our entrepreneurial instinct. I’ve known many great business people, some with close to zero formal education, and many with letters piling up behind their names. With few exceptions, I find that the more education one has, the longer and more thorough the person tends to think things through.

I’ve seen MBAs that put out spreadsheets and charts just to arrive at the same decisions they would have without the spreadsheets and charts. Don’t get me wrong – I’m all for informed decision and measurability. But very often, in business, speed is the essence. And if you are going to get your CFO to crunch the numbers to arrive at a decision that you know you need to take anyway, you may have lost not just time, but precious opportunity.

Another case in point is this publication. While our team works towards ensuring we’ve the best articles, the best layout and the best strategy in place before each issue, our less thorough competitors are taking advantage by making empty promises with the hope of delivering them later. Not surprisingly, they achieve some short term success at our expense. Would I do it differently? I don’t know. But what I do know is that the better educated one tends to be, the less risk one is willing to take. Professional and academic pride kicks in, clouding one’s judgement and allowing one to hesitate a moment too long.

Just compare the street-fighting style of Richard Branson, Steve Jobs and Donald Trump, and you will understand the secrets behind their success. Despite the huge conglomerate that they head, they remain entrepreneurs through and through. Not surprisingly, their competition, headed by paid CEOs, may have better management, featured more often in ‘Best Place to Work’ lists, and are loved by investors and analysts alike. Yet, our street fighter trio continue to kick asses again and again. Unlike Trump who actually finished school, Branson and Jobs never did. And all of us know another genius of our time who never completed school – who now work full time giving away his money.

Again, don’t get me wrong. I am not against education. People like Lee Iacocca, whom I admire, was an excellent scholar. What I am advocating is a need for us, entrepreneurs, to realise that sometimes, we need to stop analysing and follow our instinct. Our intrinsic need to worry and our self-doubt rob us off precious time. If all of us are to do things the way they are meant to be, the world will truly come to a stop.

The irrefutable law of decision making, dear readers – is to just do it!

---------
This article appeared in the December 2009 edition of SME Magazine . Get a copy of the SME Magazine at your nearest bookstore!