Why is decision-making important? Because sometimes it involves money. A lot of.
Decision-making is essential when it involves money. In 2010, Nokia stubbornly decided to use Symbian while all developers join iOS and Android. In 2017, Microsoft adopted a similar approach to challenge the duopoly. The Redmond-based company embedded Windows Phone in its Lumia lineup instead of Android. As you’ve already known, this decision lead to billion of losses.
Microsoft knows that the lack of developer support is the reason why Nokia – Symbian failed. Why did the tech giant still take that approach? It is interesting that under specific situations, people tend to take completely known wrong decisions. And it is not only about corporations. It could also happen at the individual level.
Imagine this situation. You have a $1,000 investment and if this year you gain 50%, your money will be $1,500 – that is $1,000 plus (50%$1,000 = $500). The next year, the economy was bleak and affected your investment, so it lost 50%. Your money is $750, which is derived from $1,500 less (50%$1,500=$750). What is the message from this case? Your brilliance could be wiped out easily by mistakes. Decision-making to avoid mistakes should be a priority.
This example of the decision-making fallacy gives us a simple conclusion: do not let your former glory ruin your future. Everything will change eventually, we need to adapt.
After the acquisition of Nokia, Microsoft keeps the Windows (Phone version) as its mobile devices OS. This strategy ends miserably with a $7 billion loss.
Lionel Messi – maybe the greatest player of all time – relies on his dribbling skill. As the player ages, the sharpness of his play deteriorates significantly.
Cristiano Ronaldo – Messi’s greatest rival – begins his career as a dribbler, with many tricks, flips flop. But as he ages, he changes his play style. CR7 becomes more passive, waits in the penalty box, and becomes one of the deadliest poachers. He does not dribble much. He becomes much more efficient. His physical peak has been long surpassed, but he keeps delivering prestigious titles for the club and national team.
What do we learn about decision-making here? Let’s elaborate.