Making Decisions With Incomplete Information: A Founder’s Reality (Part 2)

In the previous post, I talked about gathering input when the information surrounding a decision is incomplete or conflicting. But eventually there comes a moment when a leader simply has to decide.

When I’m weighing a decision, I usually start by examining the downside. I ask myself what the worst realistic outcome would be if the decision goes badly. Is the damage reversible? Can the company absorb a mistake?

If the downside is survivable, the decision often becomes easier. Many early-stage companies get into trouble because leaders become paralyzed by the possibility of making the wrong move. In reality, most decisions are not catastrophic — they are simply lessons that inform the next decision. I can't tell you the number of sleepless nights I had worrying about decisions I had made that ultimately had no consequence at all.

Then I look at the other side of the equation. What is the potential upside? Could this decision materially move the company forward? Is there a big enough opportunity here that justifies taking the risk?  I have found that many of the best decisions in early-stage companies are ones where the downside is manageable but the upside is meaningful.

Another factor that is often overlooked is timing. Even though it may not seem that way at the outset, not every decision needs to be made immediately. Sometimes you can make an interim decision and defer the final decision until more information emerges. Sometimes you can define the conditions under which the decision will be made later.

At first glance this might look like indecision. But managing the timing of decisions is itself a form of leadership.

Finally, there is the issue of communication. As a leader, while it’s important to exhibit confidence in a decision, I find it is more important to be honest with your team. They usually understand the struggle you have gone through to make the decision.

Explaining your reasoning and how you arrived at the choice helps people stay aligned, even when the outcome is not guaranteed, even if they disagree with your verdict.