In an Inc. magazine article, from October 2014, Geoffrey James outlines 5 reasons why entrepreneurs make bad decisions:
- Misleading Analogies (analogies that don’t correspond to facts).
- Ad-Hominem Arguments (who’s making the argument rather than the argument itself).
- Irrelevant Anecdotes (a story that attempts to establishes a fact).
- Unproven Causality (just because two things happen at the same time, or closely in time, does not mean that one of them caused the other).
- Foregone Conclusions (when a question makes assumptions in such a way that there’s only one possible decision).
The article is spot-on but I'd like to add one more reason why business owners make bad decisions:
Deciding not to make a decision.
This prevalent behavior, in my opinion, is the root-cause of misfires in a business. This is not the “if it ain't broke don't fix it” syndrome, but rather “something isn't working right so let’s ignore it and it'll go away”.
Why do business owners, who took a huge risk by deciding to start a business, choose (yes, it is a choice) not to make decisions that can resolve obstacles to growth? Here are some examples:
I am too busy to deal with this right now.
I don't think it is as bad as you think.
We can’t afford it.
How do you know that this is going to work?
Let’s wait and see if things get better.
This type of indecisive behavior never goes unnoticed by employees. Your team looks to you for leadership, mentorship, and guidance. Here’s what employees think when you play the avoidance game:
She’s afraid to be wrong
She wants us to make decisions but she never makes any. It is not my business.
She doesn't care about growing, she’ making enough money.
She is afraid of change.
It wasn't her idea so she'll just ignore it.
Deciding to decide is as important as the process of analyzing and making decisions. More importantly, the price of indecision far outweighs the cost of making mistakes.