Paying the Price of Analysis Paralysis
“Paying the Price of Analysis Paralysis”
Better, faster decision-making boosts design firm's sales
But the timing wasn't great. Stephenson had just purchased a building and orchestrated the merger of two companies to form Lykins-Signtek Inc., a Naples, Fla.-based firm that works with residential and commercial developers to design street signs, mailboxes and other specialized items.
Facing tight cash flow and seeking to stabilize the freshly merged companies, Stephenson hesitated to buy the new technology. In fact, he waited six months before finally deciding to take the plunge.
In retrospect, Stephenson concludes that the new equipment would have paid for itself over that six-month period by helping him attract more clients and broaden his range of services. Instead, his dithering cost him potential revenue.
He has a simple explanation for his mistake: Too much analysis leads to paralysis.
In FastTrac, Stephenson learned a better way to make tough decisions. He now conducts due diligence, collects relevant information and promptly decides what to do.
"I overanalyzed and then I procrastinated," he says. "Now I know that instead of beating a dead horse, you ride it. You make a decision and then ask, 'What next?'"
In 2001, for example, Stephenson boldly purchased another building to house his fast-growing company. He didn't waver or repeatedly question whether to proceed.
Today, he's more decisive in hiring people, buying vehicles and making other major investments in his company.
"Now when I have the information in front of me, I act," he says. "I don't engage in too much foot-dragging analysis."
In addition to making him more decisive, Stephenson credits FastTrac with sharpening his ability to plan. One of the most valuable tools he acquired is learning to calculate breakeven points to evaluate the actual cost of sales and growth to his bottom line.
He's currently assessing several scenarios to expand his business, such as opening new branches or buying another company. By projecting the breakeven points of each scenario, he can separate emotional drivers from more substantive, strategic factors that guide his decision.
"What kills most businesses is undercapitalization," he says. "So I'm asking, 'If we close this deal, where will our breakeven point be? How much capital will we need?' I know from FastTrac to answer these questions up front so you have a plan in place."
Stephenson's decisiveness leads to better results. His company's revenues have increased nearly 20% a year over the past few years and annual sales exceed $5 million.
"FastTrac works," he says. "All you have to do is follow the program."