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In Decision Making: Is It Requirement or Desirement?

There’s a decision to be made. You weigh the options and ask for more information. Then it’s time to choose. But wait.

Is the thing you have to decide a requirement or a desirement? Decision making can get clouded by issues or priorities that are more a desire than a requirement.

To oversimplify the argument, think about buying a car. You need transportation. The requirements include a motor, wheels, steering wheel, seats of some sort, and safety equipment. You can get those in a wide variety of simple and economic solutions. Yet your desire for style, comfort, and even luxury complicate the choices when it comes to car buying.

Henry Ford only made Model T’s in black. General motors started as a new car maker by offering the first alternative colors on automobiles. The competition has been fierce ever since.

Needs and Wants

It can be as simple as needs versus wants. Teaching children about the difference between needs and wants is a daunting challenge. My 5 year old grandson often points out things he thinks he “needs”. What he is really saying is he wants that. Every time he starts down the “I need that” routine, I tell him, “No, you need clothes and food, but you want that toy/object.” By the way, he’s not amused by my logic.

The Entrepreneur’s Bind

If you own your company, decision making can become more difficult  due to your own biases. Your pride of authorship/ownership can cloud good decision making. The thing you desire for success of your business can obstruct solid management principles.

I know an owner who should have closed his business long before it folded. The model made sense on paper, but was not being well received in the market. His own pride of creating the idea blocked his ability to “see the forest for the trees.” The company was bleeding precious investment capital; the burn rate was far faster than the growth of revenues.

He should have recognized the problem by analyzing his actual cash flow including a focused look at the sales pipeline predictions for actual receipts. The math wouldn’t work. Yet his gut feel for just knowing this idea should work kept him chasing new deals and borrowing way too much.

The Corporate Mindset

When we shift to look at executives in a more corporate role, the desirement factor is more about bonuses and performance ratings. If your bonus is tied to particular standards for budget or cost control, your decision making can be skewed. The economic aspects of a particular decision can be tipped by the mere fact that a soon-to-be-awarded bonus is at risk.

Or in company cultures where performance ratings are force ranked, one’s ability to make the right choice can be compounded by the perceived impact it may have on the next ranking cycle.

The Fix

To become a better decision maker you have to objectively weigh the forces around you. Eliminate the desirement factors and stick to requirements.

Question: When was the last time your own needs and wants got in the way of making a good decision?

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