Small Business Inertia – Analysis Paralysis

It is good to do your analysis properly. But there is a downside to the analysis process that is lurking in the background. This is commonly referred to as the paralysis of analysis. The term "analysis paralysis" refers to a situation where the effort put into analyzing a particular aspect of your business exceeds the benefits that will be gained from continuing that analysis. The trick is knowing when to call a halt to the analysis process and to start to take action or at the least head in another direction.

When the disease of paralysis by analysis overtakes you, your analysis is actually taking you back, rather than forward. The costs include not being able to take hold of opportunities quickly, the demotivation of your employees and a falling lack of confidence in your ability to manage a business from various people.

We all have vast volumes of information either sent directly to us or we have it available at our fingertips through various media. Just think of the information that comes to you through letters, e-mail, the internet, phones, mobile phones, memorandums and faxes; and this list is not exhaustive. The sheer volume of information can overwhelm us and make us feel despondent. This can be particularly so if you have a personality type that likes to analyze things in depth prior to making a decision. The curious paradox is that all of this information, in theory, should help us to make better decisions but, instead, the volume of information can impede the decision making process by slowing down and cluttering it with large volumes of irrelevant information.

The design phase of a new product, service or software item can all suffer from the disease of analysis paralysis. The real manufacturing or producing of the product or service usually can not start until the design phase is completed. When the design phase is taking too long all types of costs can increase. People that had been engaged to produce the product might have to sit around and "twiddle their thumbs". Machinery and other resources may have to be diverted to less productive work. These are but a few problems that could be stated.

How do you break out of the cycle?

  • Firstly, you need to recognize that you are in the cycle. This is the hard part. When you are in the depths of your thinking, testing your theories and doing your research, you have to kindly stop and evaluate where you are.
  • Keep focusing yourself on the benefits of what you are doing. If possible, talk with other people about this and get their views. This is not to say that their views will be correct but it will give you another perspective on your position.
  • Be on guard against perfectionism. There is nothing wrong with doing your best but being perfect is a standard to which human beings can not be obtained. If you are a perfectionist by nature, you will find it difficult to accept this. Perfectionism alone can send you down the highway of analysis paralysis repeatedly.
  • As much as possible, try to define what you are trying to achieve before you get into a heavy period of analyzing information.
  • Recognize that very often 80% of the results that you achieve come from 20% of the work that you undertake.
  • Be honest with yourself. Do you and your people really have the skills to undertake the investigation / research / thinking that you are doing? Do you need external help?
  • Strive for simplicity at all times. As long as the benefits are there, keeping it simple will almost always be the lowest cost route.
  • Divide and conquer. Do not be overwhelmed by massive undertakings. Break the project into small pieces and win the war by winning a number of small battles.
  • If you are undertaking a big project, program in predefined times when you will stop and completely evaluate what you are doing.

Wishing you easier business.