Drew

The concept of reversible and irreversible decisions is not new to me. I’ve read the shareholder letter where Jeff Bezos explains the idea using examples of one-way and two-way doors before. The question of when to make an irreversible decision, however, has always been “as late as possible” without much more guidance. I like the STOP, LOP, or KNOW framework—laid out by Franam Street—aimed at preventing analysis paralysis related to irreversible decisions.

Consider my rule of STOP, LOP, or KNOW. If you stop gathering useful information (STOP), you’re about to lose an opportunity (LOP), or you know what to do (KNOW).

If you stop gathering useful information and there is no prospect of any on the horizon, make the decision. When you’re in charge of operations at a three-letter agency, you make many hard decisions with imperfect information. Once you’ve talked to all the people with useful information, it’s time to act. The problem is a lot of people don’t act. They sit waiting for some magical piece of information that might or might not come that will make the decision clear. I call this unicorn information. We know it’s out there, but we can never find it. You can’t wait for the unicorn, you have to decide. The people that waited for the unicorn didn’t last.

If you’re about to lose a meaningful opportunity, make the decision. Recently a big real estate opportunity came across my desk. While not impossible to reverse, it would have been prohibitively costly. As with any decision that involves a lot of money — the biggest check I’ve ever written, I dove into the details wanting to understand everything. At first, there was no rush to make the decision. When interest rates started to rise, the deal got a lot more attractive. My partner called and asked if I was in because it was going forward with or without me. I had to decide, or I’d lose the opportunity.

If you know what to do, make the decision. When you’re the boss, sometimes you have to let people go. While you can offer feedback and coach and hope things will change, sometimes you wake up and know what to do. Once you know it’s best for both parties to move on, the biggest mistake is waiting.