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Financial Freedom Is Merely Organized Common Sense
More On Decisions
All decisions include an element of risk. That is why some people have trouble with them. Even people who deal with the risk part effectively and presumably make “better” decisions are sometimes wrong to do it the way they do.
For the weak decision makers, notice that a decision that can be reversed at no cost has no risk. Don’t waste your time over-analyzing it.
For the stronger decision makers, a decision that has had the risk analyzed out is not necessarily a correct decision. Eliminating risk does not make it right.
Decisions that matter, or are hard and expensive to reverse, need more work than ones that are reversible, but good decisions are not capsules. What is the good or even “the best” now, may not end well. Good decisions don’t stop once they happen. In the beginning a “good” decision must include attention to the part that measures the after decision effects. A perfectly sound decision at the point that you make it can turn out wrong and if you don’t monitor it, it will cost a lot.
It is what happens later that prove out whether a decision is good or bad. You measure the goodness in terms of their effects. A weak beginning decision can turn out well. A good one can turn out badly.
Serendipity matters. Think vulcanized rubber, think penicillin, think the glue on PostIt Notes. All are outstanding outcomes that arose from weak opening decisions or accidents.
Some properly made decisions turn out badly. The Edsel, RCA Computers, New Coke. Quitting well-made decisions early is the hallmark of a competent operational manager.
Make sure you know how you will keep track of the decisions. Know who is responsible and how often the decision will be tested. As former CEO of General Electric, Jack Welch has said, “If you cannot measure it, you cannot manage it.”
Decisions are not points, they are time line events. They need to be managed and accounted for over long periods sometimes. When building the decision include the oversight as part of the process and as part of the cost.
Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.
don@moneyfyi.com | Twitter @DonShaughnessy | Follow by email at moneyFYI
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