By Younas Chaudhary
In life and in business, we must make flexible, fast, and adaptable decisions to survive and beat the competition. So, how do you make them?
Growing up in a remote Pakistani village, my mother taught me to make quick, common sense decisions as a child. She was a fast decision-maker and never procrastinated on anything. As I grew up, the values of quick decision-making and thrift were repeatedly reinforced in my life.
My mother’s dictionary did not carry the word “waste”, and she didn’t let us waste anything. During my childhood days, my home had no trash, or at least minimal trash compared to what I see here in our American homes every day. This early on-site education, mostly through observation of my mother’s creative habits, taught me the value of money.
I’ve always made calculated, quick decisions thinking on my toes while doing business. When oil prices fell to $8 in the mid-eighties, I quickly decided to shut down all non-profitable wells, and I acted immediately upon that decision. I made the decision without panicking and doing so helped me survive the downslide in prices and avert major losses for my oil companies.
Similarly, when oil prices went negative last year, I immediately shut down all my oil wells and cut costs wherever possible. Luckily we did not have any pre-sale contracts at -$34 a barrel, and when the oil prices rebounded the next day, we quickly ramped up to our normal oil production schedule.
Change happens in split seconds, therefore calculated, quick decisions are necessary. I am fortunate that I am free to make those kinds of decisions without any board meetings, phone calls, approvals, chains of command, rehearsals, or multiple layers of bureaucracy.
When making decisions, I rarely rely on “deep analyses” involving multiple teams asking multiple people multiple questions. I never went to business school to learn these sophisticated tactics. Instead, I use good old common sense, make up my mind fast, execute my decision and never look back.
The price of oil that we produce and sell daily from oil wells varies by the moment. Oil and gas prices depend on global geopolitical forces and not what happens in your county, state, or country. Quick decision-making thus becomes a life and death mechanism on a daily, weekly, and monthly basis in the oil business. This requires speed, agility, and a flexible way of thinking. You can master it over time, but let me warn you, it’s not easy and comes with ample failures and disappointments.
As we practice making quick decisions, we should stay true to our vision of our business and the big picture. Once you know the big picture, make sure you understand different systems in digestible pieces so that you can make the complicated simple. You will have to take calculated risks, and listening is important. Listen to the chatter around you, understand what’s happening in that particular moment, and make a decision in view of the long-term.
Good managers should empower openness in their teams and allow individual contributors to make quick and effective decisions. This will increase collaboration, provide a feedback loop, and help the team analyze the strength of those decisions and their impact on the bottom line.
A 2019 study by the consulting firm McKinsey found that “ineffective decision making has significant implications for company productivity. On average, respondents spend 37 percent of their time making decisions, and more than half of this time was thought to be spent ineffectively. For managers at an average Fortune 500 company, this could translate into more than 530,000 days of lost working time and roughly $250 million of wasted labor costs per year.”
The more you needlessly sit around while making decisions, the more time and money you will be wasting.
One strategic advantage I had when making quick decisions was that I always thought of my roots, coming from an undeveloped Pakistani village to a modern Canadian city (Edmonton) in late 1973 with just $30 in my pocket. So, each time I had to take a major decision, I took it boldly without worrying too much about the consequences. After all, I started with only $30, so what did I have to lose?
“Focus on taking action, not being in motion,” says James Clear in his bestselling book “Atomic Habits.” The best option when we have to decide is to go for it, rather than keep waiting….
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.