Decisions, Decisions

(FORTUNE Magazine) – "Nothing is more difficult, and therefore more precious, than to be able to decide," Napoleon said. The Frenchman definitely made some major calls, such as invading Russia. Now that was a decision. A big, cold decision 1,000 miles long, with no food, bad clothes, and a lot of unfriendly locals. And you see what Napoleon was talking about. Some decisions leave you wearing an emperor's crown; others leave you in pajamas on Elba.

It's horrifying, really. If there's one thing we humans abhor, it's uncertainty. The Romans dealt with it by worshiping Fortuna, goddess of randomness. The Persians had another approach, which Herodotus recorded around 430 B.C.: "If an important decision is to be made, they discuss the question when they are drunk. The following day, the master of the house submits their decision for reconsideration when they are sober. If they still approve it, it is adopted; if not, it is abandoned. Conversely, any decision they make when they are sober is reconsidered afterwards, when they are drunk." They were mysterious, the ancients. Or maybe just loaded.

For modern decidophobes, business is a bad hiding place. Strategies, careers, companies--they're all made of decisions the way glass is made of sand. The quality of your decisions is what makes you valuable. And the hardest ones roll uphill: A CEO's job, it's been said, is to make the decisions that can't be delegated.

You'd think people would give serious thought to such a serious business. But most of us get ... what? Campfire stories about Johnson & Johnson's pulling Tylenol from the shelves. Warmed-over parables about visionaries who saw the future. Shopworn examples of famous blunders (the Edsel). The lesson? Go with your gut except when it's wrong. And don't be stupid.

Hey, thanks. But what am I to do with this memo telling me to "reduce headcount" in my department? That's where this issue comes in. Part two of FORTUNE's 75th-anniversary celebration is devoted to decisions--and to helping you make better ones.

We're serious about this. Yes, we wanted to create a package of delectably good reads. But visiting a flaming Colorado mountainside ("In the Heat of the Moment," page 125) or the hallways of the Pentagon ("How I Make Decisions," page 106) or the Siberian oil frontier ("Billion-Dollar Bets," page 138) isn't just a way of bringing decision-making alive. You'll come away with a set of ideas, tools, and questions that you can carry into any decision-making context.

Now a question for you: Are you serious about decisions? Start with the Latin decidere. It means, literally, "to cut off." Decisions force us to foreclose other opportunities--jobs not taken, strategies never attempted, options unpursued. Would that sales gig in Houston have worked out better? You'll never know.

Most of us will do just about anything to avoid uncertainty. We might defer decisions endlessly (thus surrendering what power we do have to control our own destinies) or, like ripping off a Band-Aid, pull the trigger all at once. Making a call takes guts. It means inviting uncertainty into your home, offering it a drink, and asking it to stay for dinner. Uncertainty is a creepy houseguest, but not your captor.

If surmounting your anxieties is step one, step two is letting go of your inner perfectionist because there is no such thing as a perfect decision-maker. Even if you had all the information in the world and a hangar full of supercomputers, you'd still get some wrong.

But there's a big difference between a wrong decision and a bad decision. A wrong decision is picking Door No. 1 when the prize is actually behind Door No. 2. It's a lousy result, but the fault lies with the method. A bad decision is launching the space shuttle Challenger when Morton Thiokol's engineers predict a nearly 100% chance of catastrophe. The method, in this case, is no method at all.

The distinction is important, because it separates outcomes, which you can't control, from process, which you can. Wrong decisions are an inevitable part of life. But bad decisions are unforced errors. They're eminently avoidable--and there are proven techniques to avoid the most predictable pitfalls (see "Great Escapes," page 97).

There is, of course, no one archetypical decision. Some are drawn out and deliberative, others made at the flick of a switch. If you find yourself at the receiving end of an Andy Roddick serve, for instance, pausing to weigh your options (forehand? backhand? law school?) is not an option. You have to jump, right now. For bond traders too, the time between analysis and action lasts milliseconds.

Now imagine you're responsible for a whole floor of bond traders. Orchestrated well, their decisions mean a great quarter; guided poorly, they'll dig a billion-dollar hole. You can't tell them what to decide, but you can train them how to decide, and select who does the deciding. That's how you build a decision-making machine--like GE or the Marine Corps. "If you explain to your subordinates the end state you want and the timeline you'd like to get there," says Gen. Peter Pace, "you can observe progress, provide resources, and know they're going to do things to get you to the goal. Maybe differently than you would do it. Often better. Sometimes worse. But inside the lines you've painted."

Some of our decisions will outlast us. We have those fading Polaroids because Edwin Land, in 1943, decided to answer his daughter's question, "Why can't I see the picture right away?" We have U.S. Steel because Andrew Carnegie wrote "$480 million" on a piece of notepaper and J.P. Morgan said, "I accept this price." And in 1929 a woman named Lila Luce was given a list of names and picked one: Fortune. Her husband, Henry, had favored Power or even Tycoon. But her decision held--and lives on, more than 1,000 issues later. ■

Decisions That Shaped History page 58

Jim Collins on Tough Calls page 89

Predictable Pitfalls page 97

How I Make Decisions page 106

Fire on a Mountain page 125

Billion-Dollar Bets page 138

In Defense of Dumb Questions page 157