I’m sure, we have all witnessed scenarios where an individual or organisation procrastinates for so long over a decision that, when they finally do decide on a course of action, many interested parties will have forgotten the original justification behind the decision.
Another familiar situation we often encounter, is of companies with no clearly defined direction or where that direction or vision is poorly communicated to internal stakeholders. This situation causes confusion to people outside the business, be they potential investors, clients and even possible buyers.
The Importance of Fast Decision Making
“Great entrepreneurs and business leaders don’t doodle, they do”
Have you ever been frustrated by the length of time it has taken one of your prospective clients to come to a decision which directly affects you? Have you ever then looked inwardly to cast a critical eye over the decision-making timeframes within your own organisation? It’s can be an interesting exercise. Long periods of contemplation in business often serve no purpose - apart from simply delaying the decision. There is no positive rationale.
Firstly, we should focus on the reasons that fast decision-making is important. Why not take your time in any decisions that you need to make? I think that the concept of taking your time is not so valid sometimes as is delaying the decision. There are occasions when you don’t really have to make a decision “right now”. If you are undecided, delaying the decision until you have more accurate information available or until a project has progressed further, can be a legitimate strategy.
Delaying or Procrastinating?
You need to ask yourself, are you genuinely delaying the decision until a time when you will be in a better position to make that decision or, are you merely procrastinating? Sometimes time can give you a new viewpoint or a better informed or advantageous perspective from which to make a decision. However, this is not really making a slow decision rather, it is simply delaying the decision until perhaps you have additional data and therefore, a better perspective following more progress. I always think of it like travelling on a long journey in which you know you have to cross a ravine in an area where you have never been before. You could sit and make plans and decide how you are going to cross the ravine before you set out on your journey or you could wait until you get there and make a decision once you are able to survey the area.
The question here is what are the disadvantages of being slow to make business decisions. This is probably a fault more often seen in highly analytical, introverted personality types that don’t naturally make fast decisions; probably not a category frequented by the likes of Richard Branson. He is known for making fast decisions based on years of experience - An advantage of getting older - So the passing years are not all bad news J
You Don’t Have to Be Right 100% of the Time
While it’s important to be analytical in your decision making, it’s also important to take action when opportunities arise. The best entrepreneurs have a common predisposition towards making quick decisions. They will accept that 70% of their decisions will be right and a percentage may be bad but they understand the need to maintain pace and increase momentum, which is not achieved by endless contemplation. Entrepreneurs also accept that they will simply have to recover from any poor decisions - And they will.
Internal Communication of a Vision
Giving direction and having a vision is important for all organisations, no matter how large or small. You may be surprised to learn that, in the M&A process, we encounter companies where the senior management team has a vision (not always the same vision) yet the staff of the company have no idea as to what that vision is. Having a clearly communicated vision helps to unify people and gives clear direction to the whole organization. In fact, when the vision is consistent, it becomes a point of reference that can help the company gain pace.
Clearly, communicating an aligned vision also ensures that valuable time is used in pursuit of that vision and not in taking the company off at a tangent wasting effort on unrelated tasks. It is also imperative for everyone in an organisation to understand the role their work plays in attaining short and long-term company goals. According to the Gallup Research Institute, there are 3 categories of employee - A to C, with A's being the Drivers, B's the Doers and C's the Detractors. The three types of employees can be identified as follows: A's work independently and have vision, B's follow instructions, C's tend to slow the others down and generally detract from the work process.
"67% of employees require clearly communicated instructions to perform at their best" - Gallup
To clarify, approximately 16% of employees are A's, 67% are B's and 17% are C's. Those employees who are B's form the majority of staff in most organisations and therefore, it is vital that they receive clear communication as the company's success largely depends upon them understanding the mission and vision of the management team.
At Boss Equity, once we engage with a company, it is astonishing how often we uncover a variety of conflicting stories from employees, senior executives, the company website and company literature. Sometimes, this is the remnants of past objectives and visions; other times, it is simply because the business leaders have not spent the time or have not been effective enough in communicating the unifying vision.
Internal Alignment = Increased Productivity & Pace = Increased Equity
The ability of your company to attain the desired level of productivity and profitability can be tracked back directly to the aptitude and performance of your employees in working towards achieving their individual goals. This, in turn, bears a direct relationship to the ability of the business leaders in your company to “market” their vision and goals to employees in a way that is easily understood and makes sense. In simplicity, there is genius and, in most great companies, there is a simple, core message, which is used to unify. Aligning the Board and senior management, the business leaders and all employees has the knock-on effect of creating a more clearly defined, less confusing impression of the company, making it easier to understand and engage with. It also makes the business a more attractive and likely acquisition target.
With clear direction and pace you can achieve more in less time. Top-down alignment, communicated throughout the organisation, will add process efficiencies, enabling everybody to be more productive, whilst, at the same time, increasing the equity value of your business.
