Hasty Decisions and Unintended Consequences

Posted: July 1, 2009 in Powerful Ideas

I once worked for a Colonel in the military who taught me a thing or two about decision-making. One day, a colleague and I were briefing him on a topic that we felt required an immediate decision on his part. Once we had completed our presentation and given our recommendation, he simply looked at us, said “thanks,” and set the file aside. We were a bit surprised about the turn of events, having expected a quick decision in the “military” style.

When we questioned him about this, the Colonel said that no decision was required at that particular time and that the situation could change, which would obviate the need for that particular decision. Alternatively, there might be a completely different need down the road.

Needless to say, my colleague and I (well, especially me) were quite frustrated by the turn of events. After spending all that time preparing for the briefing and making what we felt were very good recommendations, we were crestfallen at the prospect of leaving his office without the immediate decision we felt was required. When we inquired further, we could see that he was starting to lose patience, but he took the time to explain a bit more.

“Why do I need to make a decision now? Just because you guys think it is required? Don’t you think there might be other issues at play? I know you did a lot of good work on this, but I disagree about the haste that you think is required. I think there is more than enough time to decide on this if the situation objectively requires it in the near future. Moreover, there are many other issues that require my attention, and I can only expend effort and decision capital in a measured way. Every decision has consequences, and right now, I choose not to have to consider the effects of this particular decision you’re asking me to make. I also prefer to keep my options open and maximize my future freedom of action.”

I can’t say I enjoyed his non-decision at the time, but I subsequently came to understand what the Colonel was talking about. Every decision has consequences, some of them intended, but most unintended. We can intend one particular effect, but end up with a host of other effects that we hadn’t even imagined. Every decision also advances us further down the road of a particular course of action, thereby limiting freedom of action from that point on.

If there is no objective reason to make a decision, then it is often better to let the situation evolve in order to see if it will resolve itself over time. I’ve since observed that in about 80 per cent of cases, issues I had thought required a hasty decision turned out to be overblown fantasies on my part, or unimportant in the greater scheme of things. Often, either the situation resolved itself, or it changed to such an extent that the original course of action would have no longer been applicable.

As an illustration of this principle we can look at the political pressure that was brought to bear by the U.S. president and Congress on financial institutions that were receiving government bailouts. It readily illustrates this “law of unintended consequences” and the wisdom of avoiding hasty decisions unless they are truly needed. As a result of this pressure, many companies, not just in financial services, moved to curb their spending on conferences and meetings in resorts and hotels. In some cases these were rewards for rank-and-file employees. As reported in the July 6th edition of Fortune magazine, this has had a devastating impact on the hotel industry so far this year, just when the full impact of the fall of tourism travel was starting to be felt. In other words, a large number of politicians decided to pressure the corporate “fat cats” in a fit of demagoguery, with unforeseen consequences for the hospitality industry and the employees of the companies.

I’m sure there are corporate executives who maintained their events, judging that “this too shall pass.” They held off on making a hasty decision that they would regret down the road and moved to keep their options open and to maximize their future freedom of action. Many others though made a hasty decision based on what they perceived as a pressing need, with unintended consequences to be mostly felt by others.

To be a leader means making decisions, sometimes-difficult ones, and occasionally hasty ones. It is prudent to make plans to guard against certain contingencies that may occur in the future. It is also prudent to change one’s course toward the attainment of an objective when the going gets overly risky. However, one must guard against too many course changes and overly hasty decisions. Barring an immediate emergency, it is usually wise to consider all potential intended and unintended consequences before deciding on a course of action. The same also applies to not deciding, which is just as much of a decision as it also has causal effects in the world.

We live in a society that lionizes decisive leaders and denigrates those that are perceived as indecisive. This is a burden that leaders must bear. But prudence and wisdom demand that leaders keep forces in reserve and maintain their freedom of action and decision capital so they can act decisively at appropriate times, or recover from mistakes gracefully.

© 2010 Richard Martin. Reproduction and quotes permitted with proper attribution.

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