The main barrier blocking aspiring entrepreneurs is the fear of the unknown. Will they earn enough and see their business idea through? What challenges and sacrifices lie ahead? This uncertainty never fades, and the only way for startup founders to cope with it is to accept it.
Our research shows that the healthiest way to deal with doubts is to be comfortable with decisions. After studying over 175,000 startup founders and their journeys, we can certainly say that decisiveness is essential. It helps entrepreneurs stay sane and at peace with ambiguity.
In this article, we will break down what decisiveness is, what it is not, how it affects leadership, and what tactics can improve decision-making skills. Lastly, we have prepared intriguing facts and figures from our Entrepreneur DNA Analysis about notably decisive startup founders.
Decisiveness or Decision Making?
Decision-making is happening consciously or subtly at any given moment. For example, at this moment, you’re choosing to read this post, or you’re opting out of an idea, which is also a decision.
Often, decisions are forced; you need to make them because they’re timely. In that case, decision-makers don’t give them too much credit, don’t tie them to their future, or even want them. They don't require special skills or knowledge. Decision-making can be mundane, with many decisions being random, everyday choices.
Alternatively, decisiveness is the ability to make diligent decisions fast and efficiently. While it can be viewed as a competency that develops over time, it’s also a character trait that some personality types possess naturally.
Ideally, successful entrepreneurs use their decisiveness for high-level decision-making.
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How assertive do you think should an entrepreneur be?
Decisiveness Styles
Similarly to communication styles, some entrepreneurs have different decision-making approaches then others.
Research published by the Journal of Global Entrepreneurship Research recognizes multiple decision-making styles that can also intertwined with each other:
''Scott and Bruce (1995) define decision-making styles in behavioral terms: rational style is characterized by a thorough search for information and logical evaluation of alternatives, intuitive style is characterized by a reliance on hunches and feelings, dependent style is characterized by a search for advice and direction from others, an avoidant style is characterized by attempts to avoid decision-making and a spontaneous style is characterized by a feeling of immediacy and a need to make decisions quickly. According to Scott and Bruce (1995), the patterns of correlations between five style scales suggest conceptual independence.’’
The same study concludes that people who lean more toward intuitive and spontaneous decision-making show a higher entrepreneurial intention. This statement corresponds well with the high speed of startup reality, where the only actual failure is not acting on time.
Decisiveness and Leadership
Startup founders usually make decisions that influence the whole team. If they are hesitant or arrogant decision makers, the consequences influence everybody. Therefore, entrepreneurs who weight the pros and cons precisely, respond to challenges quickly, and involve others in the decision making process are viewed as assertive and resourceful leaders.
Repetitive poor decisions or lack of insight contribute to bad team morale and eventually a lack of trust in the authority figure.
A divisive leader is an illustration of a leader who is not decisive. Such founder makes decisions on their own and doesn’t require anyone’s input. As a result, they create a wall between themselves and others, and their image is not positive, it can be associated with fear and manipulation.
''Unfortunately, in many situations being seen to be a 'strong', assertive decision maker is confused with being an effective decision maker. In many cases, the divisive decision-makers ego is intimately linked to being seen as a ‘strong decision maker and the decisions they make’’, Lynda Bourne shares in her examination of decisive VS divisive leaders. ''
Learn more about psychologically safe startup team environments
Advantages and Risks for Highly Decisive Entrepreneurs
As with any trait, high decisiveness can lead to both positive and negative outcomes, depending on the context and a personl's awareness.
Benefits:
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Highly decisive founders weigh their decisions without overthinking them. Their mastery lies in solid evaluation and above-average intuition. Nevertheless, experience plays a big role in shortening the time needed to make decisions.
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Decisive leaders are contagious. They include others in the decisions they make and are not afraid to delegate responsibilities.
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Entrepreneurs with a knack for making quick and confident decisions will most likely stick to them. Meanwhile, they’re not afraid to admit if their judgment has been wrong, therefore, are ready to pivot. Ego remains aside.
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Risks:
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On the other hand, fast decisions are not always good ones. It’s easy to slip into making wrong choices with conviction.
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Overly decisive leaders might become too authoritative and neglect different points of view, which can harm the team.
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Some decisive people refuse to ever doubt their actions and become blockheaded.
Founder Institute’s Findings about Decisiveness
Over the past 15 years, Founder Institute's research into entrepreneurs has generated a vast dataset on the traits that distinguish successful startup founders. Among these traits, the ability to make well-informed decisions quickly stands out.
Based on comprehensive analysis, including test results, evaluations by mentors and peers, and meticolously tracking startup growth, we've identified key behaviors of decisive founders:
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Startup Founders Who Scored High on Decisiveness:
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Possess a natural talent for quickly evaluating data and feedback to make informed decisions.
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Utilize past experiences effectively to demonstrate strong conviction in decision-making.
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Exhibit inherent leadership qualities that attract others.
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Are excellent at resolving conflicts.
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Are able to act swiftly without delay.
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Startup Founders Who Score Low on Decisiveness Can improve by:
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Utilizing a routine that includes making multiple small decisions daily.
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Watching and learning from people who are efficient decision-makers
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Building their own system or using tested decision-making frameworks
Find valuable advice on decisiveness and popular frameworks here
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The Role of Decisiveness
Decisiveness is a critical component of an entrepreneur's drive, reflecting their energy, determination, and persistence. It's part of a broader set of traits that includes perseverance, self-reliance, motivation, achievement, risk tolerance, and competitiveness.
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Balancing Decisiveness
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High decisiveness benefits from balancing with patience, collaboration, and reflection.
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Low decisiveness can be compensated by enhancing traits like risk tolerance, self-reliance, and proactivity.
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Global Insights
Our research shows that the top five cities with the most decisive startup founders are Frankfurt, Munich, Zurich, Rome, and Paris. In fact, entrepreneurs in Europe scored more on decisiveness than any other region.
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Impact on Startup Growth
Decisiveness is crucial during the initial stages of a company's development. Founders who combine decisiveness with proactivity, competitiveness, and risk tolerance are often rated highly by our accelerator program and make rapid progress in the early stages of their venture.
End Notes
Well-developed decisiveness not only benefits the individual entrepreneur but also has a profound positive influence on the entire team. In times of uncertainty, such decisiveness acts as a buoy, keeping the team's enthusiasm high and steering the group towards clear objectives.
Moreover, a decisive leader sets a tone that empowers others to act with confidence. By demonstrating commitment to their choices and the willingness to adapt as situations change, they create a dynamic decision-making model that encourages flexibility and resilience within the team. This approach ensures that the team not only survives but thrives.
Discover how decisive you are and learn to make tough choices fast and accurately
The Founder Institute is the world’s most proven network to turn ideas into fundable startups, and startups into global businesses. Since 2009, our highly-structured accelerator programs have helped entrepreneurs raised over $1.75BN in funding across over 200 cities worldwide.
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