Issue:April 2014
BUSINESS DEVELOPMENT - Traffic Light Decision-Making
All of us have faced decisions in which, if we make the right decision, we are a hero, and if we make the wrong one, we are a bum. This is particularly distressing when it comes to making a business decision with a result that can either make you a hero or get you fired.
There are three positions that you can take in making a business decision: 1) make no decision (worst); 2) make the wrong decision (better than No. 1 but still not that great); and 3) make the right decision (best). This is when traffic light decision-making comes into play.
A red traffic light means STOP. Don’t do anything and remain in place. When this is your position on making a decision, you are not going anywhere. With every decision, there is an element of risk, and your responsibility is to minimize that risk. But freezing in place means you are automatically wrong, not making any progress, and worse, it will most probably come back to haunt you at a later date. Sometimes a no-go decision is the right decision, but this is different from freezing in place.
A green traffic light means GO. This means you motor ahead with a go decision regardless of the risks. The danger is that you have not weighed all of the risks relative to the rewards. This type of decision without checking the “cross traffic” can mean a real problem for you. It pays to check both ways before proceeding.
A yellow traffic light means CAUTION – be prepared to STOP or get ready to GO. Caution is a good thing, but not when it causes you to freeze in place. Assessing the risks and rewards is very wise when you are making a business decision, but you must be working toward the right decision, be it a go or no-go.
I believe sound business decisions should begin with the yellow caution light. Careful assessment of all of the factors surrounding what will become your final decision is a must. Soliciting the opinions of others is very helpful as long as you can separate the objective thinking and opinions from the political ones. Most important is communicating openly with your boss.
What often freezes people into place when having to make a risky decision is the fear of being fired if the wrong decision is made. However, if you make your boss part of that decision, or make he or she very aware of what your decision is and why, then you minimize the risk to yourself if things go south. This is part of the yellow caution light approach.
Remember, if you take the red light approach, then you freeze in place and are automatically wrong. If you take the green light approach, then you increase the odds of you being wrong. Either way, you are at higher risk to do yourself and your career damage.
The yellow caution light approach allows you to take responsible risk, which is what a good decision-maker always does.
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John A. Bermingham is currently the Executive Vice President & COO of 1st Light Energy & Conservation Lighting, Inc. He was previously Co-President and COO of AgraTech, a biotech enterprise. Previous to that, he was President & CEO of Cord Crafts, LLC, a leading manufacturer and marketer of permanent botanicals. More previously, he was President & CEO of Alco Consumer Products, Inc., Lang Holdings, Inc., and President, Chairman, and CEO of Ampad, all of which he turned around and successfully sold. With more than 20 years of turnaround experience, he also held the positions of Chairman, President, and CEO of Centis, Inc., Smith Corona, Corporation, and Rolodex Corporation as well as turning around several business units of AT&T Consumer Products Group and served as the EVP of the Electronics Group, and President of the Magnetic Products Group, Sony Corporation of America. Mr. Bermingham served 3 years in the US Army Signal Corps with responsibility for Top Secret Cryptographic Codes and Top Secret Nuclear Release Codes, earned his BA in Business Administration from Saint Leo University, and graduated from the Harvard University Graduate School of Business Advanced Management Program.
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