Making the Right Decisions

Entrepreneurs are faced with hundreds of decisions. How do they go about making the right ones?

Generally good decisions are made with facts, experience, skills and other people’s input gained over time. Sometimes one’s gut or instinct plays an important role too.

Regardless of how an Entrepreneur arrives at it, the perceived popularity of his/her decision should never be a factor in the decision making process. Do what is right, not what is popular!

Right and wrong does not depend upon how many people are for or against a decision. Entrepreneurial leadership is not a popularity contest, but rather leading people the right way towards fulfilling a common Mission. Popularity comes and goes, but true leadership remains.

Entrepreneurs need to have the courage to make the right decisions.

Ravi Patel

www.patelCFOservices.com

 

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Published in: on February 25, 2014 at 4:51 am  Leave a Comment  
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Are Good Decisions Always Fair?

Leadership is about making optimal decisions for the company as a whole, not only for certain segments of stakeholders. As they say, “you cannot please all the people, all the time.”

Entrepreneurs like to be loyal to people, especially those who helped them start the business and were early employees. However, as the company grows, Entrepreneurs have to make decisions that might be tough, unfair to some, and unpopular.

Good decisions involve doing the right things even it means that some people might be adversely affected by such actions. Fairness is a great moral value, but sometimes business decisions cannot be optimal if everyone’s interest is taken into account. Entrepreneurs, on the other hand, should not in any way go out of their way to make decisions that purposely hurt certain people. That would be grossly unfair.

While difficult, make optimal decisions for your business that are ethical even if they might cause hardship for some people.

Ravi Patel

www.patelCFOservices.com

Unintended Consequences

Good decisions for significant matters take into account all angles, even arguing from other points of view.

Adding to this process of making good decisions, Entrepreneurs should also weigh unintended consequences of their decisions. Did you evaluate, at least for significant issues, potential unintended consequences?

Take an example of developing an incentive program. If you have developed a program that correlates high performance with high reward, it is of course your intended consequence. But, what about unintended consequences of employees cheating or manipulating the system to obtain higher compensation? How have you protected the company against such unintended consequences?

When making crucial decisions consider potential unintended consequences and implement appropriate internal controls.

Ravi Patel

 

Do You Have a Backup?

Entrepreneurs love to do everything themselves as they start and grow their companies. As they build staff, they do delegate operational  responsibilities as required.

However, do they delegate decision-making responsibilities and authority? Is there a clear backup person to whom the growing organization looks to make decisions in the absence of the Entrepreneur? Or, does the company postpone decisions awaiting the return of the Entrepreneur?

It is expected that when the company reaches a certain size, it should be in a position to have a secondary leadership team to run the organization. But what about the period until such a stage is reached?

An Entrepreneur needs to groom a backup person to whom the organization can rely upon and who has the authority to make certain decisions. This allows the Entrepreneur to focus on other issues that may require his/her absence from the business (or even take a vacation!).

Ravi Patel