Organizations have always struggled with making decisions. One McKinsey study found that more than half of all business time spent making decisions is ineffective. In an average Fortune 500 company, McKinsey estimated that decision paralysis cost $250 million of wasted labor costs per year.
But decision paralysis is particularly acute in the face of an uncertain future. And decision making has been hampered even at the personal level as the pandemic reveals new surprises.
The American Psychological Association found that 32% of adults (and 48% of Millennials) are “sometimes so stressed about the coronavirus pandemic that they struggle to make basic decisions, such as what to wear or what to eat.”
Art Markman, a professor of psychology at UT Austin, said:
“Stress decreases our working memory capacity, so we have fewer cognitive resources to wrap our heads around all the different options, even for things that are relatively inconsequential. Even minor decisions take a certain amount of cognitive effort, and there’s a limited amount of that we’ve got in a day before we’re sort of done.”
For leaders today, it’s important to be aware of this paralysis in our teams and in ourselves. One piece of advice for businesses from McKinsey that resonated with me is to “make the critical small choices.” Be aware of when we’re stalling on the inconsequential things, or they’ll pile up.
Spinning out on small decisions can make it even harder to get our heads around the large ones.
Here are a few related cartoons I’ve drawn over the years, including a really old one from 2004: