Just because you can, it doesn’t mean you should.
In thinking about all the options an organization has to expand into new markets, geographies, or products, it is understandable why a company might get a little carried away. We learn there are a number of elements that may help us make the decision: ROI, cost advantages, make vs. buy decisions, and so on.
Yet, you could have all the calculations in the world that scream, “Danger, Will Robinson!” and a CEO could still turn to the BOD and say, “I think we should go ahead and do it.”
The reason we attend business school, watch CNBC, and network with other professionals is that we’re supposed to get pretty good at making strategic decisions. Ideally, we’re not so stubborn that if we get advice that might point us in a better direction, we will change course.
However, we know that isn’t the case. Perhaps the worst part is that it may not be just one person making the bad decision. Usually it’s a group decision, which is even more frustrating when we know that the group should have had the ability to steer things in the right direction. That’s why there’s “groupthink,” and phrases like: when everyone’s accountable, no one is accountable. It is incredibly easy for a group to make a bad decision.
What should we do?
Keep up a system of checks and balances. If there’s a make vs. buy decision, keep up rigorous criteria each time you need to make that decision. “Oh, I know someone who can hook us up,” isn’t always the best reason to go with one particular firm over another. You don’t want to let opportunity pass you by, but you should be proactive instead of consistently reactive. You’ll never be ahead of the curve if you’re following everyone else.
The key is, whether you need to expand to another country or you want to add another feature to your product, you have to consider the information that is going into your decision. Ask yourself if you really should pursue this new avenue.
If not, look for the next one.
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