When Flipping a Coin is Being More Decisive
Jess, the owner of a small business, is upgrading an important piece of equipment used in the company’s manufacturing process. The decision has narrowed down to two pieces of equipment and the company’s CFO has compared the financial impact of the two choices. Both options produce very attractive financial returns with little difference between the two. The plant manager is anxious to get the new equipment installed and, although having a preference for one of the choices, is not opposed to the alternative. Jess has a difficult decision to make since the choice between the two pieces of equipment is so close. If you were in Jess’s position, how would you decide?
You could ask both the CFO and plant manager to do some more detailed analysis, fine tuning their projections but you would in all likelihood be better off flipping a coin!
I’m an analytical person by nature so it is tempting to “sharpen the pencil” and do more analysis. I also like winning and look on second place as “first place loser”. So why flip a coin and risk making a sub-optimal solution?
This kind of decision requires forecasting the future and therefore forces us to deal with uncertainty. Even if we could look back after the decision is made we would not necessarily know what the other outcome would have been. This is an example of perfection being the enemy of excellence. Both choices are excellent and you will never know which one would have been closest to perfection. Pick one and don’t waste time doing further research and analysis. Use the time you have created to focus on your strategy for achieving your long term goals or to pursue your non-business passions.
Better and quicker decision making will always help a business owner increase their focus on long term goals and do a better job of work/life integration.