Sunday, February 3, 2008

Analysis Paralysis

Prudent advice is to "look before you leap". This is especially applicable when exploring investing options, new business opportunities and new ventures. When you jump in unprepared or make hasty decisions - the outcome may not be what you anticipated.

I agree that the overall emphasis on caution and thorough analysis is valid but the big question is - when is it enough? A typical conundrum would be entrepreneurs find themselves in analysis-paralysis. A self-sustaining and self-defeating situation where one continues to explore, prove and disprove theoretical scenarios. There is certain lethargy in being stuck in this recursive loop - you never get to the lets-do-it part.

To avoid analysis paralysis, is there a clear signal to watch out for?

I guess the one indicator that you might be stuck in analysis paralysis is history. If someone's projects or ideas never get beyond a theoretical extrapolation of numbers, risks and market limitations - one should wonder about their motives. Some people enjoy wondering about situations but have no intention of ever committing to one. So enjoy the daydreaming - at least its good mental exercise!

The other and more potent symptom of inaction is fear. Fear of failure, fear of the unknown and fear of change. To actually take a step, the first step, is much harder since it requires venturing into unknown territory. The fear of the unknown versus the comfort of the known (however unpleasant it may be) will hold you back. Elongating the review cycle can obviously prolong that tentative jump-off point.

If you are hesitating to make that commitment and seek solace in revising numbers and business plans - my suggestion would be review this snippet for breaking this cycle.

"Various ancient Greek commanders and the conquistador Hernando Cortes supposedly made a practice of burning their own armies' boats after landing on the coast of a hostile land. With no way to retreat, their armies had to succeed -- or die trying. Whether these stories are true or not, raising the cost of failure is a time-honored way of motivating oneself for success."

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