Decision Making For Entrepreneurs | Growth Lending (2024)

Why are easy decisions often the hardest part?

Our psychologist, Heather Bingham, explains how to work your decision-making muscles and avoid the pitfalls of overcomplicating things when decision making as an entrepreneur.

What is decision making?

Decision making refers to the cognitive process of making choices when more than one option is presented. It is achieved by understanding the problem, often in detail, identifying the options, seeing how each will affect the future, and then choosing one or more paths forward.

Decision making as an entrepreneur

Entrepreneurs know how to make difficult decisions. You wouldn’t be where you are today, had you not made a number of tough choices during your journey. Decisions such as:

1. Devoting all your spare time to developing your idea – often over a long period, crafting the product you want to bring to the marketplace. You’re usually in the workplace during this period, so a lot of time taken from the rest of your life. Family time, time spent with friends, time relaxing… you forgo an awful lot of this as you work your way through your plan. This is often the first difficult decision you take.
2. Leaving your job with “nothing to go to” – of course, you have plenty to go to, but this is still a hard decision. Being a driven person, you will have worked hard to get where you are. You will be used to your professional standing, your status among friends, the pride of your family and the security of your monthly pay cheque: whether or not you are risking everything, you are risking some of this, which is a difficult step.
3. Whether you need a partner or are going to go it alone – this is a very big decision and needs to be right for the individual. It is worth bearing in mind that mental wellbeing is often challenged by going down the entrepreneurial route, so deciding whether you will best thrive on your own or in a partnership is a very important and multi-layered decision to take.
4. Finding funding – for some entrepreneurs, this is the most exciting phase of building a business, but for others they have to decide how they are going to sell both themselves and their product or service to others. Choosing the strategy is no straightforward task, so another difficult decision must be made. If you’re lucky, choosing from a range of funders is another tough decision to make.
5. Hiring your first employee – you may have absolutely no experience of recruitment, but you have to craft a role, pitch it to the right people and pay a salary – often, even before you pay yourself. This can be an incredibly difficult step. Even if you aren’t giving a chunk of your business away, you’re still sharing something that you’ve worked on for a very long time with someone you don’t know. It’s an exciting decision, but a tough one nevertheless.

There are a few gamblers in the entrepreneurial community who achieved all of the above using hunches, rough odds and fingers in the air, but the vast majority who find themselves as business leaders have learned to make decisions through hard practice.

You know how to weigh pros and cons, identify gaps in understanding and have probably become a master of your crystal ball. You can blend multiple factors and move forwards, expertly blending the information from both your head and your heart. By the time you’re the boss, your capabilities around making difficult decisions are honed, toned and in beautiful shape.

What about the easy decisions?

The next challenge is to learn to spot the easy decisions. This is vitally important to both your wellbeing and also to the preservation of your decision-making capabilities.

I’ve worked for a dedicated and kind boss who put the same level of deliberation into choosing the instant coffee in the kitchen, as they put into creating a five year strategy. This person regularly started work at 5am, knocked off at midnight and ended up on the edge of reason for their pains. They were absolutely overloaded with decision making, and it showed; they were obviously exhausted, no one liked the coffee they chose (which, incidentally, they rarely drank themselves anyway) and they were disappointed with their five-year strategy. Absolutely not for want of trying, their decision-making skills were out of whack and this is because every decision they made was a tough one – they could not spot the easy ones.

If I inject a metaphor, this is akin to the body builder who puts all their efforts into building their upper body. They look great in half-length shots, but won’t allow full-length pictures, because everything they’ve worked on is held up by puny little legs that look like they will snap. They need to balance their workout, and in the same way business leaders need to develop their full range of decision making skills.

Having learned how to sweat the hard stuff, you keep everything in shape by learning to recognise and take, or delegate, the easy decisions.

“Easy” doesn’t mean unskilled

Some decision making is enabled through dispassionate thought, based on models like cost/benefit analysis, but “irrational” factors are also important, often based on emotions or belief systems. Balancing out the rational and “irrational”, with the known (past and present) and the unknown (future) takes a lot of practice. These are hard-won skills, and successful people tend to prize any and all skills that they acquire. The better you get at it, the more you want to do it.

However, recognising easy decisions is also a very worthwhile skill. Rather than thinking of recognising “easy” decisions as taking away from the decision making skills you’ve acquired, it’s good to think of it as an additional skill – another tool in the armoury. Recognising easy decisions is a complementary skill; it doesn’t detract from you being able to make tough decisions, but rather enables you to save yourself for when they’re needed.

Recognising an easy decision

There are some simple questions to help anyone to recognise an easy decision:

• How many consequences hang on this particular decision?
• If you take this decision and it doesn’t work, how hard will it be to change tack?
• Do you actually care about this decision?
• How many options are under consideration?

If I work through these four points:

1. Number of consequences involved: If you come to a decision that has a number of related consequences, then it is a difficult decision. If, however, the consequences are not complex or far-reaching, or do not have a knock-on effect, then it is an easier decision. Do you still have to make it, or can someone else?
2. Opportunities for correction: Here I’m borrowing from Agile. Sometimes moving forward feels impossible, because there are so many factors that you know will come in later, but you cannot quite grasp now. It is easy to get stuck with a decision if future ramifications are complicated and potentially wide-ranging. However, a mini-decision that moves you on, when you know you can correct it once you’ve tested the outcome, can save you a lot of searching.
3. Caring about the decision: Entrepreneurs take a lot on their shoulders when they start a business and they will carry a lot on their shoulders as they lead a business. However, once your organisation forms, you no longer have to care about every choice that is made. If I go back to an earlier example, the boss I worked with really didn’t care about the coffee choice – he did not drink it anyway – so he could so easily have asked someone else to take on that choice. Don’t sweat the small stuff, if it takes your attention and energy away from the issues that really matter to you.
4. Number of options available: Binary choices can be the toughest, because you can be choosing between black and white. If there are many options, however, that can actually make a decision far easier, rather than harder. Trust yourself to narrow your options down as quickly as possible by concentrating on identifying red flags, and then decide with what you have left whether it fits the other three tools listed here. If not, you’ve got a meaty decision to take.

As a leader of an SME, you have probably become a difficult-decision-taking machine. This is massively to your credit.

However, don’t lose touch with the simple decisions that come your way and don’t seek to overcomplicate. It’s that old phrase, “don’t look a gift horse in the mouth”. If something easy comes your way once in a while, and you’ve applied the tests and are sure it’s easy, just take it or delegate it.

The more you do it, the more you’ll feel an enhanced sense of control, and when the tough stuff comes your way, you’re ready for it.