Every day, we make hundreds of decisions. Some shape our future, while others have little impact.
Thinking takes effort, and time is limited. Wasting mental energy on trivial choices leaves us drained when it comes to important ones. By identifying the decisions that matter most, we can focus our thinking where it counts.
With so many choices competing for our attention, how do we decide which ones truly deserve our time and effort? The answer lies in prioritisation and focus.
The key is to prioritise decisions based on their significance and reversibility.
Some choices require deep consideration, while others can be made quickly and left behind. Understanding this distinction helps us think more effectively and avoid unnecessary cognitive overload.
The Two Key Factors in Decision-Making
One way to prioritise our thinking is to focus on decisions that are:
1️⃣ Consequential – Will the outcome have a significant impact on our lives or business?
2️⃣ Irreversible – Once made, is the decision difficult or impossible to undo?
A Decision Matrix
From this, we can make a simple matrix with four options (see right).
Decisions in Category 1 require the most critical thinking; those in Category 4 the least.
Category 1: Consequential and Irreversible (Major impact, cannot be undone) Choosing to have children is both highly consequential and irreversible. It will reshape your life in profound ways, and there’s no undoing it once the decision is once they're born. Other examples include:
- Merging with or acquiring another company – A fundamental shift that permanently alters the business.
- Selling the business – Once ownership is transferred, you can’t undo the sale.
- Going public (IPO) – Once a company goes public, it must comply with stringent regulations and scrutiny.
- Firing a key executive – The long-term impact on leadership and company culture can’t be reversed.
- Entering a legally binding, long-term exclusive contract – Can lock a business into a path with no easy way out.
This is where we should apply our most critical thinking.
Category 2: Consequential and Reversible (Major impact, but can be changed)
Examples include:
- Expanding into a new market – If unsuccessful, operations can be scaled back or shut down.
- Changing pricing strategy – Can be adjusted in response to market feedback.
- Rebranding the company – Though costly, it can be undone or modified.
- Relocating an office – While disruptive, businesses can move again if needed.
- Launching a new product line – If it fails, the company can discontinue it.
Category 3: Inconsequential and Irreversible (Minimal impact, cannot be undone)
Examples include:
- Distributing marketing materials containing and error – Once distributed, they can’t be retrieved.
- Rejecting a minor partnership opportunity – The same deal might not come again.
- Missing an industry networking event – The chance to connect is gone forever.
- Giving an offhand remark in an interview – Even if insignificant, it’s now public record.
Category 4: Inconsequential and Reversible (Minimal impact, can be changed)
Choosing what to eat at a restaurant is neither particularly consequential nor irreversible. That’s why I often order the first thing I see on the menu that I like. I know I’ll enjoy it, and I can always try something different next time. Plus, by making a quick decision, I free up mental space to focus on the conversation—likely the real reason I’m there.
Other examples include:
- Changing the office coffee supplier – If employees dislike it, switching back is easy.
- Adjusting a social media posting schedule – Can be modified with no long-term effects.
- Rearranging office seating – Easily changed based on feedback.
- Trying a new project management tool – If it doesn’t work, switching back is an option.
- Offering a limited-time discount on services – The promotion ends, and pricing reverts to normal.
- A/B Testing a change to an email or web page – You get real-time feedback and can easily revert it.
For decisions in this category, it may not make sense to overthink things. Instead, we should develop a culture of learning by controlled experimenting.
Understanding Decision-Making as a Spectrum
Of course, not all decisions fall neatly into “consequential” or “inconsequential,” “reversible” or “irreversible.” These qualities exist on a spectrum, making some choices harder to evaluate.
Examples:
- Hiring someone is reversible - you can still part ways - although this may be difficult and expensive depending on your labour laws. Firing someone may be less reversible as they amy not be amenable to returning!
- Launching a new product is a significant decision, yet adjustments can be made along the way.
Change the Decisions
Sometimes it is possible to change decisions so that they are less consequential and more reversible.
Strategies for Making Consequential Decisions Less Consequential
1️⃣ Diversify Investments to Spread Risk
- Example: Instead of betting heavily on one new product, a company can develop multiple smaller products in different market segments to mitigate losses.
2️⃣ Build Redundancy into Operations
- Example: A logistics company expanding to a new region can keep partnerships with multiple suppliers instead of relying on a single vendor to reduce dependency risks.
3️⃣ Create Parallel Options Before Committing
- Example: Before committing to a major software change across an organisation, test two different solutions with separate teams to evaluate performance before rolling out one company-wide.
4️⃣ Use Temporary or Scalable Resources
- Example: A retailer testing a new sales channel can use pop-up stores instead of permanent locations to gauge demand before committing to long-term leases.
5️⃣ Implement Contingency Plans
- Example: A business entering a risky market can have an exit plan in place, including financial reserves and alternative strategies, to ensure a quick pivot if conditions change.
Strategies for Making Irreversible Decisions More Reversible
1️⃣ Use Trial Periods or Pilot Programs
- Example: Before committing to a full international expansion, a company can launch a small pilot in a new country to test market viability before full investment.
2️⃣ Structure Contracts with Exit Clauses
- Example: When signing an exclusive supplier agreement, include termination clauses that allow exit under specific conditions, reducing long-term risk.
3️⃣ Phase Implementation Gradually
- Example: Instead of a complete company rebrand overnight, update branding in stages across different channels, allowing room for adjustments.
4️⃣ Lease Instead of Purchase
- Example: A business looking to relocate can lease office space rather than buying property, making it easier to move again if needed.
5️⃣ Use Contingent Workforce Over Permanent Hiring
- Example: Hiring contractors or freelancers for key roles before offering full-time positions ensures flexibility in case the business strategy changes.
Strategic Decisions Deserve the Most Thought
When it comes to business strategy, most decisions are both consequential and have long-lasting effects. These choices shape the future of your company, take time to execute, and require significant resources. That’s why strategic decisions fall into the top priority category—they deserve your best thinking.
So, how can you ensure your strategic decisions receive the attention they deserve?
✅ Take the time to evaluate options carefully. Avoid knee-jerk reactions and "shiny new thing" syndrome, and consider long-term implications.
✅ Use tools to structure your thinking. Platforms like StratNavApp can help you map out strategies and assess potential outcomes.
✅ Seek external input. Sometimes, a fresh perspective can uncover insights you may have missed. Consult widely.
Make Smarter Choices
Not all decisions warrant the same level of attention. By focusing your thinking on consequential and irreversible choices, you can free up mental bandwidth for what truly matters.
If you need help thinking through your strategic decisions, drop me a message—or try StratNavApp. Whatever you do, make sure your strategy gets the attention it deserves.
Remain Reflective
Socrates said: "An unexamined life is not worth living".
We should remain reflective about our decision making at all times:
- Circumstances change. A decision which seemed consequential and irreversible once may no longer be so. New options to make it less consequential and more reversible may have arisen.
- Consequence turn out differently to what we'd imagined. We should reflect on past decisions and whether they turned out as we intended. What can we learn from them? What could/should we have done differently?
Recording your key decisions in a decision journal, or using something like a Strategy Alternative Matrix (SAM) in StratNavApp can support reflecting and learning.