5 Things You Need to Know Before Making a Big Decision

Every time I start on a new project, it happens at least once: I formulate an opinion based on something a client tells me. And that opinion ultimately turns out to be completely wrong.

I just had one of those eye-opening incidents recently. Had I not taken the time to verify what I'd been told, I would have reached the wrong conclusion.

No, it isn't just me. I see accomplished executives, entrepreneurs, even successful venture capitalists fall into that sort of trap all the time. We jump to conclusions, make decisions based on limited information, or characterize what we think we heard.

I wouldn't call it cutting corners. That suggests nefarious motives, which are not usually the case. More often than not, our reasons are valid. Sometimes we're behind schedule or over budget. Or the source is a smart guy who knows his stuff. No matter. It's a common cause of bad decisions, missed opportunities, and business failure.

To avoid disaster, I like to do something called, "Trust, but verify." It's an old Russian proverb that Ronald Reagan was so fond of saying that Mikhail Gorbachev once complained, "You repeat this phrase every time we meet."

I guess, when it came to nuclear disarmament, Reagan wanted to be sure that missiles were actually being destroyed. Can you blame him?

It's the same thing with business. If you're going to base an important decision on limited data or formulate an opinion from one person's description, keep the following in mind:

Everyone sees things through their own prism. We all know that human perception is entirely relative but, for some reason, under certain conditions, we're willing to make believe that isn't true. Well, it is true. It's always true. There are no exceptions.

Seeing is believing. Someone once told me, "I don't believe anything I hear and only half of what I see." While that's perhaps a jaded or cynical perspective, I've found it to be a remarkably grounded reality check I've come back to again and again over the years.

Get it straight from the horse's mouth. All too often we get our information from sources that are far removed from their point of origin. That's especially true in the modern era of Twitter and Facebook. If it's important, get it from the source.

There are at least two sides to every story. Not only that, there are exactly two sides to every business transaction. Don't base an important decision on an anecdote or opinion from one side of a business relationship, even if it seems relatively cut and dried. I can't tell you how often I've reversed my judgment after sourcing the other side.

If you want to know the truth, meet one-on-one. If you're considering a business deal, sourcing a client, or considering a job opportunity, meet with multiple key people one-on-one and pledge confidentiality. That's the only way to find out what's really going on. People will say things to you they would never say in front of someone else they work with. That's the truth.

Look, there are all sorts of ways to "trust, but verify;" it depends on your situation. One thing's for sure. Basing an important decision on one data point or one person's perspective is a recipe for disaster. Just don't do it.