A McKinsey study estimates that decision paralysis costs Fortune 500 companies a staggering $250 million annually in wasted labour. That’s money spent debating, overanalysing, and revisiting choices, instead of taking action. The consequences? Missed opportunities, delayed innovation, and declining productivity. Even if the cost isn’t as high in smaller companies, the issue is still very real.
Yet, most companies don’t address these hidden costs. Why? Some key reasons we often see in my consulting work include:
- Managers fearing failure
- Managers being experts, not leaders
- Lack of exemplary leadership at the top
Take one of our clients, for example.
An operations manager and a technical expert were tasked with collaborating—one overseeing the team, the other handling machine failures. With no clear objectives, responsibilities, or goals, they relied on their own expertise, but soon found themselves working against each other. The team was confused, and both managers complained to their shared manager. Overwhelmed and unsure of how to assign blame, the manager asked for more data. As a result, the situation dragged on for months, with contradictory data and no real progress.
The outcome? An inefficient, disorganized, and burned-out team, all because the leaders who should have decided didn’t. The lack of unified leadership and decisive action created chaos that could have been avoided.
Why This Happens:
Fear of Failure
Many managers hold back from making decisions because they fear failure. They worry that a wrong choice could reflect poorly on them, jeopardizing their standing or even their career. This fear often stems from the belief that failure is a sign of weakness or incompetence, especially in environments where mistakes are penalized rather than seen as learning opportunities. Instead of taking decisive action, they may delay decisions, overanalyse the situation, or avoid making a call altogether, ultimately stalling progress and preventing the team from moving forward.
Experts, Not Leaders
A common pattern is that managers are often promoted for their technical expertise. They excel at problem-solving, optimizing processes, and mastering their specific domain, but leadership requires a different set of skills. When they move into managerial roles, many continue to rely on their technical knowledge, trying to control every aspect of their domain. They get bogged down in data, looking for the perfect solution, and fail to trust their team or delegate effectively. Instead of leading, they get caught up in the minutiae, making decisions harder to come by. This focus on technical expertise over leadership skills creates a bottleneck in decision-making, leading to indecision, delays, and a lack of direction.
Lack of Exemplarity
When senior leaders fail to lead by example, it sets a dangerous precedent. Their indecision or reluctance to take responsibility for key decisions trickles down to the rest of the team. Employees begin to mirror this behaviour, waiting for someone else to step up or avoid making choices altogether. Without strong, decisive leadership at the top, the organization becomes stuck in a cycle of hesitation and fear, where no one wants to make a move, and everything gets delayed. Leaders need to model accountability and show that taking ownership—even when things go wrong—is crucial for progress.
General Management's Expectations
The traditional theory suggests that general management should rely on their leaders or experts to present solutions based on what they believe is best, then choose the one that aligns most closely with the company’s vision. However, in reality, this often doesn’t happen. General management rarely communicates clear objectives to their subordinates, leading to confusion, lack of clarity, and poor delivery of solutions. When results don’t meet expectations, general management demands more data and evidence, further delaying decision-making. Instead of empowering leaders to provide clear options, general management may become too involved in the process, expecting more than just solutions. This creates a vicious cycle of indecision and inefficiency, with no one feeling confident enough to make timely decisions.
Too often I hear
“Making decisions without enough information can lead to costly mistakes.”
But as a leader, it’s your job to set the example. The goal isn’t to rush decisions, but to combine speed with strategy.
Six tactics to improve decision-making
1. Decision-Making Is a Skill
Like any skill, decision-making improves with practice. If you’re not confident yet, that’s okay. You don’t become an expert overnight, but you have to start.
2. Fewer Choices, Easier Decisions
More options lead to overwhelm. Narrow down choices to what aligns with your goals, and the decision becomes clearer.
3. Perfect Doesn’t Exist
It’s tempting to gather all the data, but waiting too long only delays action. Make decisions when you have about 70% of the information.
4. Nothing Is Set in Stone
Your decision can always be adjusted. Don’t stress about making the perfect choice—failure is an opportunity to learn.
5. Trust Your Gut
Data and analysis are essential, but don’t underestimate your intuition. It’s often based on experience and subconscious knowledge. Trust it.
6. Action Beats Inaction
Indecision is a decision, and it’s often a costly one. Taking action—even imperfectly—creates clarity and momentum. The most successful people aren’t always right, they just act despite fear.
Combine Speed with Strategy.
Decisiveness doesn’t mean being reckless. Find the balance between speed and strategy. Gather just enough information, set a deadline, make the decision, then adjust as needed.
At the end of the day, decisive leadership is about progress, not perfection. The cost of indecision can be enormous, but by applying these six tactics, you’ll shift from paralysis to action, driving growth and productivity.
