Perhaps you’ve heard the saying, “He or she who hesitates is lost,” or “He/She who hesitates is last”? The 1930’s iconic actress Mae West once remarked “He who hesitates is a damned fool.” Hesitation can be a more comfortable stance, especially in uncertain times such as we’ve seen in 2020 and carrying over into the current year. Yet good leaders understand that uncertain times also call for decisive action. Slow decision-making can endanger the business further when margins and revenue are already at risk.
Nike’s famous tagline ‘Just Do It’ may be a bit too aggressive a stance for businesses in an uncertain environment, but the opposite, ‘Don’t Do Anything’ may actually be riskier. When companies are faced with a strategic decision such as adding new capabilities or investing in new technology, when future quarters seem hazy, it’s prudent to consider the opportunity cost of NOT moving forward with anything new until everything is perfectly clear (which it seldom is). Selectively pursuing the right initiatives not only could bring the future more into focus, but also capitalize on uncertainty in the market, and help leapfrog the competition.
Before we look at ways to tackle hesitation, let’s try to understand why leaders and businesses are prone to hesitation.
Fear of making a bad decision
Decidophobia is defined as the irrational fear of making decisions. In its most extreme form, it could manifest as panic. Princeton University psychologist Daniel Kahneman won a Nobel Prize in 2002 for the work he did in the 1970s with colleague Amos Tversky on prospect theory. They found that decision-making often occurs through cognitive shortcuts called heuristics that have the potential to cause errors in how we estimate risk. As humans, we’re prone to make judgments based on information that’s easily recalled due to recent exposure or because it’s based on personal experience. We might therefore overestimate the risk of taking action when prior actions didn’t result in favorable outcomes. In other words, we can be prone to think or even expect the worst. And this negative thinking can cloud decision-making abilities.
Fear of change
Metathesiophobia is yet another phobia defined as an intense fear of change that can be paralyzing. But even in less extreme forms, resistance to change can stunt unique opportunities or help a business avoid the dangerous extremes of economic downturns. Actually, our fear of making a bad decision feeds our aversion to change. And in general, as humans, we like things to stay the same. Case in point: A recent study had a group of people view a painting that they were told was done in 1905. The next group viewed the same painting but this group was told that the painting was done in 2005. The 1905 group rated the painting much more aesthetically pleasing than the other group. Conclusion: we like that which has been around for a while. The most obvious reason for this is that we don't like change, or at a minimum, the absence of change creates the illusion of certainty, which, as humans we much prefer.
One of the skills that can be helpful in a downturn like we’ve witnessed with COVID-19 is financial ambidexterity, or the ability to look at both costs and revenue reinventions when bouncing back from a crisis. It’s far too easy to just look at the expense or investment lines and think all of our solutions to present circumstances are based on reductions in OPEX and CAPEX. A recent study by Deloitte showed that almost 50 percent of companies that pursue cost reduction measures fail to meet their targets anyway. Cutting costs or investments can put additional strain on businesses and can demotivate employees when those cuts take the form of layoffs, elimination of pay/bonuses, or projects/programs that can help employees become more efficient and effective in their roles. Sometimes the timing of these cuts could not be worse - they may look a lot like taking the legs out from underneath an already wounded soldier.
The word apathy derives from the Greek word pathos. It describes a state of indifference or inertia, where inertia is scientifically described in Newton’s First Law: a body in motion stays in motion, a body at rest stays at rest. Translation: businesses that already weren’t taking action tend to find it easier to adopt the status quo when times get tough. In a paper titled Overcoming Organizational Inertia (Godkin & Allcorn), it’s suggested organizational inertia appears when managerial responses to environmental activity are too slow or the information gathered is insufficient to guide taking informed actions. Businesses, or rather the people that run them, tend to not like bad news and and even avoid it, and on top of that, reactions to bad news can be slow or non-existent. The preferred path is always to stay informed, study market dynamics and drivers (perhaps even more so when times are tough), and be prepared to react promptly and decisively to any insights that are gathered that can suggest change is not only preferred but necessary.
Better data analysis, proactive insights
Collecting and using data helps businesses not only react faster but also be more proactive in their approach to the market. Regardless of your industry or target customer base, data drives insights that help facilitate better decision-making. Lack of data or poor data can create blindspots. Having data and using it to full advantage can open up opportunities for growth where none was thought to exist. Anomaly and trend detection, market and customer segmentation, predictive modeling and forecasting, and real-time analytics and optimization technology can all be leveraged to create better outcomes -- from pricing products and services, to determining which products to sell or what offers to make to which customers.
Upgrading practices and approaches
When there’s a disruption to business, it’s often an ideal time to rethink your organizational structure and your processes and systems so that when business returns to normal, or a new normal, your organization has retooled its approach to addressing and executing on the needs of the market. Changes might take the form of designing more efficient workflows or implementing technologies to improve workflow. It might also mean looking for ways to help your people do their jobs better, easier and faster - through automation, business process improvement, or digital transformation. If your organization doesn’t adapt and change internally when the external world clearly has, you have to wonder if you are aligned properly to meet the new realities of your industry.
Transformative technologies can both (1) drive operational efficiencies that bring additional cost savings and (2) allow companies to compete more effectively in an increasingly digital business environment. And in times of uncertainty, both benefits could make the difference in results and market value. Digital disruption was already well underway at the beginning of the pandemic, and many highly competitive companies have found the need to accelerate their investment and projects to facilitate automation, implement AI/cognitive technologies to become more intelligent in everything from their manufacturing practices to their use of data to better serve customers and grow market share. Some companies have invested or re-invested in eCommerce and supply chain platforms to facilitate the changing dynamics of trade and purchasing channels, while others have taken this opportunity to upgrade their ERP infrastructure to help improve their cost management practices at a time when accelerating costs are a hot topic.
A good first step in understanding where you stand is to take a look at how you are performing relative to your peers. Zilliant offers a complimentary interactive B2B benchmarking report, customized for your business, that will reveal underlying margin and revenue leakage and even suggest how to capture incremental gains without looking elsewhere (cost-cutting, downsizing, mergers, and acquisition) to grow the top and bottom-line. Not only will this report identify deficiencies that can be corrected and opportunities that can be captured, but you’ll learn specifically what the opportunity cost of hesitating further could mean to your business.
And when and if you are ready to talk about embracing a change and implementing new technology, you needn’t fear the worst about upgrading and integrating new applications to solve deficiencies with your existing infrastructure. Zilliant's Real-Time Pricing Engine allows upgraded B2B pricing and sales capabilities to be easily integrated in real-time to existing systems. This facilitates better and faster commercial decisions in the form of pricing and sales guidance within the systems that are already in place today (ERP, CRM, CPQ, eCommerce or Marketing Automation Systems).
If you don’t want to hesitate any longer and wish to learn more about how Zilliant is helping businesses take proactive action amidst uncertainty, connect with me on LinkedIn, send me an email or contact our team here.
Kyle Nations is Sales Director at Zilliant helping global B2B companies realize improved financial performance using advanced technology for optimal pricing & sales effectiveness.
About the Author
Kyle Nations is Sales Director at Zilliant helping global B2B companies realize improved financial performance using advanced technology for optimal pricing & sales effectiveness.Follow on Linkedin More Content by Kyle Nations