Revisiting decisions – why and when?

Opportunities present themselves when managers revisit decisions, but what about the dangers of flipping and flopping?

There is a time for every decision, when postponing it further would potentially cause a loss, or miss out on an opportunity to make a profit. Most decisions can be postponed until that time, which the manager has to judge, and during that postponement the decision has every chance of being improved with better and more pertinent information. But when the decision is made and one goes forward with the effort and expense to attain the end sought, is there any occasion in future to revisit it?

The answer is Yes; you may revisit the decision provided certain conditions are met. The first question to ask is whether there have been changes in the environment that nullify any of the assumptions under which the original decision was made. Such changes could possibly make another way of proceeding more efficient than the original decision. The matter has to be re-examined.

Furthermore, the change in the environment could be so substantial as to supersede the very objective of the original decision. Another objective may appear on the horizon that holds potential for higher profit and opens up many more opportunities. If so, there is a definite need to re-examine the original decision.

Since revisiting decisions seems to have advantages, managers may be tempted to do it  for all their decisions. That would lead to much waste of corporate energy; the manager should do a quick calculation whenever there is a temptation to flip a decision. What if anything has changed to cause a review? Have some of the constraints that attended the original decision been removed altogether or substantially loosened? The original objective of the decision may still be valid, but the means to achieve it can be improved.

Unless the manager is quick to recall the original constraints and enumerate which ones have changed he will be perpetually tossing in his mind, unsure of the correctness of the decisions already taken. Therefore, the wise manager notes in his day-journal when a decision of importance is made (i.e., one that entails significant expenditure of effort): (1) what was the objective of the decision, (2) what were the reasons for adopting the stated means to achieve the objective, and (3) more particularly, what were the attendant constraints at the time.

Far more drastic changes may mean the very objective of the original decision needs to be questioned, and a different objective could hold more promise. However, there is a sunk cost from having pursued the original decision. That needs to be taken into account, and could entail continuing on the same path and reconsidering at a later stage when the next investment period comes up.