The Sad Truth About Small Business Decision-Making… 1

ColorsProblem: One of the things I really like about startups and small businesses is also a frequent problem with the way they make decisions. Let me explain.

I love how so many startups and most small businesses are communities that work like small groups without a lot of hierarchy and structure. It’s so often like mice gathering around a big piece of cheese. Everybody finds something to do.

And in a lot of these businesses, with a community atmosphere, decisions are made by the whole group. When the whole company is only five or 10 people, they’ll often talk about a decision, weigh pros and cons together, and come to a conclusion.

But here’s the thing: As the company grows, it breaks into jobs and responsibilities and functions, but it often keeps that atmosphere of sharing and discussion. So over time, processes get bogged down. The bookkeeper is unhappy that the package is red when she wanted it green. The sales manager doesn’t like the way an accounting clerk deals with late unpaid invoices. And the web developers don’t like the messaging on the marketing pages. And that’s the sad truth.

Unfortunately, consensus doesn’t often lead to the best decision process. Generally you want the marketing person to decide about images and messaging in ads, the web developers to decide on platforms, hosting, security and such; and the finance people to figure out cash flow and accounts payable and accounts receivable.

Somebody told me once that when colors are chosen by committee they always come out beige.


About the Author Tim Berry is the founder and chairman of Palo Alto Software and Follow him on Twitter @Timberry. Follow Tim on Google+ Read more »

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