#11 Reversible and irreversible decisions

Or why not all decisions should be considered in the same way

In his shareholder letter, Jeff Bezos writes about two types of decisions - reversible and irreversible. To understand the difference, ask yourself - is the decision I'm about to make is a one-way door or a two-way one?

Type I decisions are irreversible and these decisions should be made slowly, methodically and with great deliberation. If you walk through the door, you can't come back easily if you don't like the outcome.

But most decisions aren't like that. Most decisions are type II - they are reversible. If you are deciding which shampoo to buy, even if you make the wrong choice it's easy to go back and buy a new one. But when you are deciding who you want to marry, or which house to buy, they are harder to reverse.

Reversible and irreversible decisions fall onto a spectrum. To understand how reversible or irreversible a decision is, ask yourself how expensive it would be to undo a decision.

Understanding the difference between these types is crucial. Usually, we put all decisions into one category which results in slow decision-making. Faster decisions are a competitive advantage. An imperfect decision executed today is better than perfect decision executed next week.

If the decision you are making is reversible, move fast. If it's irreversible - move slow.

Read Jeff Bezos annual letter.