In the popular children’s movie Kung Fu Panda, the primary character, Po, is faced with a dilemma. Should he follow a difficult path to an unknown future destiny or quit and return to something more predictable and comfortable. Po expresses his concerns to an old and wise Kung Fu master who advises him: “Quit, don’t quit . . . You are too concerned with what was and what will be. There is a saying: yesterday is history, tomorrow is a mystery, but today is a gift. That is why it is called the present.” Essentially, the Kung Fu master is counseling that the problem was not choosing between the two options. Instead, the problem was not taking advantage of the moment, making a choice, and moving ahead. In real-life business scenarios, similar indecisiveness has led to the failure of many a business.
A Business Culture of Maybe
In a business setting, this dilemma of choice is observed when the business devolves into a “culture of maybe.” A culture of maybe develops when a decision that impacts the business needs to be made and the company’s leadership group or owner avoids a “yes” or “no” determination. Instead, they want to gather as much information as possible before a final decision is made, so much so that they find themselves trapped in what is often referred to in business and leadership texts as “analysis paralysis.”
What is Analysis Paralysis?
Analysis paralysis occurs when a business leader or owner constantly delays decisions and actions because he or she believes that just a little more information and analysis might illuminate the path that should be taken. After the acquisition of the desired information, additional questions arise thus prompting the business leadership team or owner to feel that these questions and concerns must now be addressed before the decision is made. Analysis paralysis is a vicious cyclical pattern where a final decision is never reached because with every piece of new information acquired, additional questions develop, thus creating a back and forth structure which, by nature, will never reach a final outcome.
This need, however, is within the mind of the owner or leadership team and not truly a necessity to reach an intelligent and informed decision. When analysis paralysis occurs, those responsible for making the decisions essentially abdicate their responsibilities as decision makers and assume of the tasks of information gatherers. While on the hunt for increasingly larger and more nuanced amounts of information, an ultimate decision is unable to be reached until it is too late to take advantage of the opportunity being analyzed. Ultimately, the accurate initial response to the opportunity is “no” because a timely decision was not reached.
What are the Root Causes of Analysis Paralysis?
Analysis paralysis partially has its foundations in the fear of failure. For example, a businessperson or leader may remember a past decision that led to a less than successful outcome than anticipated. Instead of seriously examining the details of why the decision led to the unsuccessful outcome (which sometimes may include the potential determination that outside forces beyond the decision-maker’s control were the root cause) and/or developing concrete steps to avoid the problem in the future, the decision-maker rationalizes that had he or she only gathered a little more information that the bad choice would have been prevented. Instead of realistically examining the decision itself, the decision-making process or procedure is blamed as the ultimate culprit. This rationalization and flawed focus leads to the ever increasing desire for additional information before any decision is made – analysis paralysis at its core.
Surprisingly, analysis paralysis also occurs when a business has been very successful. In this circumstance, a leadership team or owner is always looking for the next big business opportunity or decision that will catch “lightning in a bottle” a second time. As such, over-analysis of every potential future business decision is compared to the template of the past triumph. If the new potential business opportunity or decision does not exactly align with the criteria of the prior success, the leadership team or owner looks for evidence or data to alleviate their concerns about moving forward, which can never fully occur. Ultimately, a decision is not made in a timely manner (if at all) and the opportunity is lost.
This state of affairs often leads to a business passing on multiple “good” or “very good” business opportunities because its leaders are myopically pursuing the “perfect” opportunity instead. In addition, this approach often leads to rigid thinking which cripples the business until it is unable to innovate or adapt to any new business opportunity because these new prospects cannot fit into their template of past success. An examination of the evolution of the personal computer and internet industry over the past 30 years is full of examples of successful companies who were unable to take advantage of innovations because these advances did not fit with the pattern of past success their company had enjoyed. These once successful companies were eventually eclipsed by new companies who would quickly adapt and innovate to the changing computer and internet landscape.
Companies like Blockbuster Video and Borders Books fall squarely into this category and provide examples of what happens to a company when it cannot escape analysis paralysis. Blockbuster and Borders Books saw how their customer base was evolving to an internet-based and download/streaming focus. They also both saw the initial success of their competitors (i.e., Amazon and Netflix) and were provided options to quickly expand into the same market. However, instead of taking advantage of their large financial capital and market presence, they would not and could not swiftly make a determination on the next steps forward because the decision was so foreign to their past successful formulas. As a result, their adaptation to the new market occurred too late and they had already been eclipsed by their competitors.
Steps a business can utilize to avoid analysis paralysis and the culture of maybe will be discussed in a subsequent post.
© 2015 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved
This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.