Digital Disruption, Energy Transitions, Economic Downturn: The business world is full of ever new surprises. Even the near future is becoming less predictable - with the result that familiar management methods fail. Completely new approaches are sought, which sometimes surprisingly lie close: Core elements of a different way of thinking and acting in dealing with uncertainty have long been found in the repertoire of successful and innovative entrepreneurs. An example is the way entrepreneurs make decisions. The entrepreneur, a hesitator and ditherer? This idea turns common perceptions on their head. It contradicts the image of the bold, heroic decision-maker as well as that of the smart medium-sized entrepreneur who competes with rigid large organizations through agility. On closer inspection, it becomes clear: In the everyday life of entrepreneurship, entrepreneurs make quick and accurate decisions. However, when it comes to major, existential decisions, they are by no means the heroes they are often portrayed as. Here, they hesitate and dither, leaving every possible escape route open for as long as possible - and for good reason. The entrepreneur knows that they are operating without a safety net and can crash at any time. At the same time, they realize that they cannot rely on the rational decision-making models of business administration. This makes them cautious - and decision specialists beyond rationality.
Intelligence instead of Rationality
The idea that decisions should be made rationally runs through business administration. However, the models based on this classical decision theory have a significant flaw in uncertain times: they assume predictability, which requires a transparent environment. Following the decision-making process of the entrepreneur, it is advisable to rely on intelligence instead of rationality. Rationality means fully grasping the situation - intelligence, or one could also say cleverness, on the other hand, means making an appropriate selection from the entire wealth of aspects, evaluating them, and acting accordingly. This incremental approach, which contradicts the classical planning ideal, not only contains a lot of wisdom but also aligns with newer theoretical insights, including agile methods that, unlike classical decision theory, assume a complex environment.
Accurate and Quick: Decision-Making in Everyday Life
Entrepreneur-led organizations make accurate and quick decisions in their everyday operations. This is where the reputation of the lean, agile medium-sized entrepreneur lies, who can compete with the big players due to their short, swift decision-making processes. It pays off that the entrepreneur is deeply involved, knowledgeable about the subject matter, and therefore intuitively correct in their decisions. Because intuition requires that the decision-maker is on familiar ground and has a keen sense of changes in their field.
When Existence is at Stake
The situation is quite different when a major, exceptional decision is pending, such as acquiring a competitor, entering a completely new technology, filling a key position, or even succession planning. Now the entrepreneur is moving on unfamiliar territory, so they cannot rely on their intuition. Consciously, they postpone the decision to gather new information or observe the course of events for a while. This does not mean they abandon the decision-making process; on the contrary, hesitating is a strategy to intensely engage with the decision - to have further discussions, research new aspects, and weigh the risks against each other. In a still unclear decision-making situation, "you have to wait until you understand it better," explains dm founder Götz Werner in an interview. This caution allows taking risks. The reversibility of decisions or individual decision steps also plays a significant role. Götz Werner again: "Either the matter is completely clear to me, then I can do it - or it is still unclear, but easy to correct, so I can say: Let me try it out."
Strategy of Hesitation and Dithering
The decision-making mode is therefore: not committing for as long as possible, keeping an escape route open. The aim is to break down the decision-making process into small, reversible steps to delay the final irreversible decision for as long as possible. This approach would be problematic if it were to turn into mere vacillation. However, in most cases, the entrepreneur consistently follows their decision-making process, even if they choose a path that is anything but straightforward. They understand how to keep the decision-making process reversible for long stretches and continuously adapt to new insights and unexpected events. Because of their caution, they can take risks. The inclination towards reversibility is not a sign of indecisiveness but reflects a unique entrepreneurial quality. "Delaying" is a conscious strategy to avoid making mistakes for the long-term security of the company.
Avoiding Major Mistakes
When asked how some companies manage to survive for more than 100 years, the long-time CEO of a well-known family business said: "Perhaps the most important condition for survival is to avoid major mistakes. Maybe it is enough to be less foolish - and to avoid mistakes made by others, or at least to correct mistakes made quickly." Wolfgang Zimmermann, the management expert for times of change, speaker and visionary for entrepreneur-led organizations.
