How to Place Your Bets When Making Risky Business Decisions
Your whole business could be on the line with a single decision. Here are three steps to make the decision-making process less daunting.
By Jay Turo •
Opinions expressed by Entrepreneur contributors are their own.
The speed at which technology changes combined with massive global competition has made the reality for every business daunting: decide on the right strategy and allocate the right resources to pursue it, or watch your business wither away or get completely run over.
Those same technological and competitive realities that make good decision-making so critical also make it really hard. Take for example Garmin and Magellan. It was not long ago that the portable GPS devices were on top of the world, making excellent profits and selling at high margins, along with generating recurring revenues from on-going software and map updates.
Then, bam! The wide adoption of Google Maps on smartphones made stand-alone GPS devices redundant for most consumers. The result: Garmin's stock price lost more than 70 percent of its value from its highs and Magellan's parent MiTAC's stock price plunged more than 50 percent.
India BPO, an India-based business process outsourcing firms is another example. Not so long ago, the company was on top of the world, with new multi-thousand seat call centers and programming shops being set up around the country. But the core of that business was eroded by lower-cost competitors from places including the Philippines, South America and Eastern Europe.
In both cases, the strategic and competitive threats came quickly and unpredictably. The managers of these businesses were either slow to respond, or their responses were sub-optimal at best.
How do you recognize and accept that there are some things you cannot know and still make high-quality strategic decisions?
Focus on the future. When an entrepreneurial team gets together to discuss strategy, especially one that has worked together for awhile, the tendency is to focus too much on current products and services.
These are of course important, but too much focus on what a business does and sells now can easily distract and distorts the bigger strategic picture. Instead, practice Clean Slate strategy. Imagine the future was empty and you could fill it with whatever you chose.
This is hard to do and can sometimes feel silly, but this is often how breakthrough strategies are born.
Look beyond your industry. One of the great blessings of our modern age is the easy opportunity we all have to expose ourselves to experts and ideas outside of our industry and functional competence.
A client of ours is CEO of one of Los Angeles' largest hospitals. He gets some of his best healthcare client service ideas from the hotels and restaurants he frequents. Similarly, service businesses can learn from online retailers when it comes to how quick and easy it is for customers to buy their products. Companies selling online can learn from the emotional connection established by the most popular social media bands and personalities.
Be confident in your decisions. Never let incomplete information or fear stop you from just making a decision.
The right frame of mind is to gather as much data and intelligence as you possibly can, analyze it intently and then make a decision.
Once you've decided, walk with a strong and resolute step down that chosen path. After doing so for a good period of time, look up and ask if that decision gave your business the results you were seeking.
Focus on the future, look beyond your industry and make decisions with confidence. Then watch the quality of your strategy, and your business results, sky rocket.
