Three types of reversible decisions: Hats, Haircuts, and Tattoos

Reduce analysis paralysis with reversible decisions

This article contains excerpts from my new book Unblock: Clear the Way for Results and Develop a Thriving Organization.

When should we act fast and take informed risks, and when should we act more slowly and deliberately? It helps to distinguish between reversible and irreversible decisions.

To put this idea into practice, James Clear, the author of Atomic Habits, suggests categorizing decisions as: hats, haircuts or tattoos. He argues that most decisions are like hats. You can try one, and if you don’t like it, you put it back and try another. Since the cost of a mistake is low, you can decide quickly and try many of them.

Some decisions are more like haircuts. If you get a bad one, you can’t fix it immediately, and you might feel embarrassed for a while. But after a few months, it grows out, and nobody will notice it anymore. You won’t be stuck for long with your choice, so there’s no point in spending hours or even days searching for the best option.

However, a few decisions are like tattoos. Once you make them, you have to live with them. Even years later, you’ll be reminded of the choice you made. When facing an irreversible decision, move slowly and think carefully. (Of course, strictly speaking, tattoos can be removed, but it won’t be easy or come cheap.)

A proportionate amount of effort

Few decisions are ever fully reversible or irreversible; it’s a spectrum. If a decision is cheap and easy to undo, spend minimal time and resources deciding whether to do it. If it’s costly and difficult to undo, be more careful.

If the cost of doing the wrong thing is high, and the time spent on deciding is worthwhile, then put in the effort to try to make the best choice. Slow down the decision-making process, conducting the necessary research to explore possible scenarios, quantify risks, and reduce uncertainty. Then, think deeply and decide carefully.

But even if a decision is irreversible, consider the negative consequences of doing it wrong. If those are acceptable, you can still make the decision quickly.

After making a decision, set a reminder to check the outcome at a future date. Use any learnings from this to correct your course.

Reducing analysis paralysis in your team

To accelerate decision-making, we should become comfortable with making decisions with incomplete information. Amazon’s Jeff Bezos said:

“Most decisions should probably be made with around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow.”

If your team feels uncomfortable making a decision when there is incomplete information, advise them to ask themselves one of the following questions:

• This is a reversible decision, and if it fails, we can return to the drawing board and try something else. So can we decide it quickly?
• Making the wrong decision seems manageable. So, what can we decide now?
• Is it worth spending time and money gathering more information and delaying the decision?
• We seem very eager to make the perfect choice; what is the worst that can happen if we get it wrong?

Decide quickly, then learn

Often, the chances of making the right choice without trying something out first are low. For example, a new app isn’t likely to drive the outcome you are looking for immediately, without a little trial and error. You’ll probably need to keep iterating, tweaking, and experimenting until you reach the desired result. In these cases, the only way to know what works is to put something out there, learn from what happens, and then course-correct it.

Here are a few more helpful questions:

• What can we say “yes” to quickly that allows us to discover whether this is the right direction?
• How can we make the decision smaller to feel comfortable acting on it now?

When you’ve successfully accelerated the decision-making process for some decisions, ask the team to reflect on their progress, and estimate how much time they saved. This will help solidify the behavior change.

Dive deeper

If you want to learn more about improving decision-making, check out my new book: Unblock: Clear the Way for Results and Develop a Thriving Organization.