By Younas Chaudhary
A painful mistake recently taught me that there is a huge tradeoff between speed and thoughtfulness. My company is in the oil and gas production business. We do not typically drill wells with our own drilling rigs, even though we own multiple stacked drilling rigs. However, to try to conserve current high drilling costs, our team made a hasty decision recently to use one of our own drilling rigs to drill a new well. Based on our production team’s analysis, the drilling would take around a month and would save quite a bit of money. Unfortunately, the project ended up taking four months and led to huge losses, and in the end, we lost the new well due to a stuck drill pipe in the hole.
This taught our team that a hasty decision sometimes becomes very costly and produces unpleasant results. The project failed because we failed to acknowledge that our present expertise is in operating oil and gas wells that have already been drilled, not in drilling new wells. We did not have crews experienced in drilling new wells, and that led to the loss of money, time, and a new well. Further, even in the face of problems, our team stubbornly continued to press forward with their losing project in the hope that the next day would be better, despite my advice in the early days to abandon the project and cut our losses.
My hasty decision yielded nothing in the end except wasted money, time, and effort. The haste in attempting to save money ended up in a waste.
Human brains make mistakes when we act too quickly
In life, most of us want quick results. You begin a start-up and want to see ten-figure revenues in a year, but you soon realize that your idea is not being accepted so easily by the market. Our brains make mistakes when we rush and expect immediate positive results.
Does haste inevitably make waste? According to a Vanderbilt University study by Drs. Richard Heitz and Jeffrey Schall, our brain switches into a special mode when pushed to make hasty decisions. “Haste makes waste when a mistake entails dire consequences. But there are many situations in life when the cost of not acting is higher than making an error in judgment. For example, if the decision is whether or not to shut down a nuclear reactor in the presence of a potential meltdown, I’d prefer haste,” says Schall.
A focus on thoughtful growth is what matters more, says the Edward Lowe Foundation, an operating foundation that focuses on entrepreneurship. A prudent, methodical strategy will help us avoid waste.
I should further add that age and experience help us make personal and business decisions that avoid haste. For instance, when searching for a used car, a young person may find it difficult to make a good deal, but an older person with experience in buying used cars, who has had purchased several cars during his/her lifetime, will likely make a quicker, better, and wiser decision.
When I began my oil and gas business in Chanute, Kansas in the late-’70s, I did not have any prior knowledge of the business. So on some days I had to pretend as if I knew my job well and to convince the local farmers to lease their land to me to drill for oil wells. Patience and persistence were key factors in helping me grow my business, and the results did not come fast. Sometimes, it reminded me of a fisherman sitting eagerly for hours waiting to catch fish.
I am a quick decision maker and have more victories than losses in business, but I have had colossal failures also – and many can be attributed to imprudent haste.
5 Core Business Principles That I Always Practice
- Keep a constant eye on cost management. Reduce wasteful expenditures, think long-term, stay on budget, and meet deadlines.
- Focus on your top producers and your least performing ones. Leave the middle alone. Stay firmly on top of developments in your top revenue-yielding work and your worst loss-inducing projects.
- Once you take a well-researched, calculated decision, do not overthink it. Just go for it and be fully prepared to meet the consequences, whether good or bad.
- If something is causing ongoing bleed, try to put a stop to it immediately. Do not think of alternatives for saving the effort, because you will be losing money thinking instead of acting.
- Act now! If an opportunity comes in front of you, do not get stuck by over-analysis paralysis. Instead, decide and move forward.
The views, thoughts, and opinions expressed in this article are my own and do not represent the opinions of any entity with which I have been, am now, or will be affiliated. Further, I make no warranty regarding the accuracy or effectiveness of my recommendations, and readers are advised to consult other advisors as well as their own judgments in making business decisions.