Companies, especially big ones, pursue thousands of initiatives every year. These initiatives range from new product lines, to geographic expansion, to mergers or acquisitions. Each of these initiatives creates a raft of supporting material and requires numerous decisions to be made, the most critical of which is "are we going to pursue this or not?”
I’m always amazed at the extreme disparity in activity levels that the answer to this question creates. Rarely does a single decision lead to such opposing behaviours.
If the answer is "yes, we are going to pursue this initiative” it stimulates a frenzy of action; project teams are hastily assembled, purchase orders are drawn up, project implementation plans are created and budgets are allocated. In turn, all of these activities lead to more decisions, more documentation, mountains of emails and endless meetings. The flow-on effect of the "yes” decision creates a paper trail as long as your arm and deep analysis about the initiative and everything involved with it.
However if the answer is "no, we’re not going to pursue this initiative” it stimulates, well, nothing.
At first this seems straight forward and logical. We decided not to pursue that initiative and therefore we’ll scrap what effort we’ve put into it so far and move onto the next initiative. Afterall it’s the new products, new office locations and new acquisitions that deserve the resources.
All this is true, except for one major issue. An issue which most companies end up wasting vast amounts of resources on; if you simply pack-up and move onto the next initiative what is to stop you repeating this process in the future?
How are you going to answer that all important question: have we done this before?
When companies decide to pursue an initiative it creates lots of activity and lots of evidence about the "yes” decision. However if the decision is not to pursue the initiative more often than not there is little or no evidence of the decision and it is almost never available to the wider organisation, it’s known only to those people who were directly involved.
The impacts of this are obvious once you think about it. However it’s a problem that is rarely understood or even acknowledged. Most organisations don’t realise that the "no” is just as important as the "yes”.
By formalising the "no” decision and making that decision readily available to the wider organisation you dramatically reduce the risk of repeating the same initiatives and wasting precious resources on something you’ve already addressed. As the workforce becomes more geographically dispersed and as turnover occurs more rapidly there is a greater risk that one of your colleagues in another location, or even the new guy who joins your department, will think they have come up with a great new idea and start investing their time into it without realising this initiative has already been evaluated and declined. Your colleagues could spend weeks or months on this before the initiative gets shutdown all over again.
By formally recognising the "no” decision and making it available to others in the company you can prevent this wastage.
Reducing this wastage is usually motivation enough, however there is an even more important reason for addressing this issue: if the "no” decision is not properly recorded then in future it won’t be properly understood, and if you don’t understand why you decided not to pursue the initiative how do you know if the decision is still valid.
Business conditions change all the time; profit margins shrink or grow, technology enables new functionality, foreign exchange rates shift and product lines vary. With all of these changes comes the opportunity to review past decisions in a new light. Just because we decided not to pursue an initiative two-years ago it doesn’t mean this decision is still valid if conditions have changed.
However it’s almost impossible to review and revise a previous decision if the reasons for making the original decision are not understood in detail. Often it’s the how and why of the decision that are the most important elements; we know we decided not to pursue that initiative two-years ago but we don’t really know why we decided that, which means we don’t know if the decision is still feasible or if it needs to be revisited.
Knowledge retention is becoming a key issue for most companies. Thousands of decisions get made every day, some of those decisions generate new initiatives and some of them kill-off an initiative. However all of these decisions have value and all of them should be definitive, accurately captured and readily accessible.
Understanding why the decision was a "no” is just as important as a "yes” because otherwise you’re destined to chase the same rabbit down a different hole.
By James Cattermole, Founder and CEO, Hexigo