No Decision Is a Decision

No Decision Is a Decision

Early in my days at Payless, a colleague in Finance said something that completely changed how I thought about the business.

“We sell everything we buy.”

Huh?

That was a very different fact from the retail world I’d come from.

Payless was vertically integrated.

We weren’t selling somebody else’s shoes.

They were ours.

Lock. Stock. Barrel.

And eventually…

we had to sell them.

That shelf space isn’t free

As I spent more time thinking about our four-wall economics, I continued to wrestle with one constraint in particular.

We only had so much shelf space.

And some of that very valuable real estate was occupied by clearance product.

Product that wasn’t moving particularly well in that store.

That distinction matters.

Because we had a lot of customers who loved clearance.

For some, clearance wasn’t something they happened upon while shopping at Payless.

Clearance was why they came to Payless.

They were real customers.

And we absolutely wanted to serve them.

The question wasn’t whether we should serve that demand.

It was:

How could we do it more profitably?

Meanwhile, every few days fresh merchandise kept arriving.

Payless’ shelf space was essentially brick-in, brick-out.

To get our fresh product on the shelves, we needed the “not so fresh” product off the shelves.

That seemed like a pretty obvious problem.

Status quo meant lower product velocity.

What if we tried something different?

So I started proposing tests.

Not grand transformations.

Tests.

One idea was a dedicated Payless clearance store - maybe one serving every 10 to 15 or 20 traditional stores.

Move clearance inventory out of those stores.

Put it somewhere the clearance customer could find a whole bunch of it.

Everything under five bucks.

And free up shelf space in the other stores for fresh product.

Another test was almost too obvious.

Pull the clearance merchandise from shelves - put it in the stockroom.

Get the fresh product out on the floor.

And let’s see what happens.

And then there were the $1,000 transactions.

Every once in a while, we’d see one.

Yes… at Payless.

That’s a lot of shoes!

When we dug into them, they were almost always charities buying up all of our clearance product.

That was a clue.

Maybe we could partner directly with nonprofits to move product our regular store customers weren’t buying and put that shelf space back to work.

Would any of these ideas work?

I didn’t know.

That was sort of the point.

There’s another choice

We didn’t need to open 100 clearance stores.

We needed to learn what happened if we opened one.

We didn’t need to pull slow-moving product from every store.

We needed to try it in enough stores to see whether replacing it with fresh product improved velocity, conversion rates, average check, and overall sales.

And we didn’t need to redesign our entire clearance strategy around nonprofits.

We’d already seen a clue.

We just needed to test whether the clue led somewhere.

That’s one of the things I’ve always liked about testing.

It creates another choice between:

Bet the farm.

and…

Do nothing.

Try something.

Learn something.

Then decide what to do next.

A test doesn’t eliminate uncertainty.

That’s not its job.

A good test converts some uncertainty into evidence.

And good evidence gives us greater confidence in the next decision.

Doing something is harder than doing nothing

Of course, every test had one thing in common.

It required us to do something.

Somebody had to own it.

People had to work on it.

Logistics might have to change.

There would be meetings.

(There are always meetings.)

And yes…

A test might fail.

But that’s information too.

A small failed test can be considerably less expensive than a large bad decision.

And sometimes considerably less expensive than continuing to make no decision at all.

Doing nothing?

Much easier.

No test to design.

No implementation plan.

No new process.

No organizational change.

The alternatives required us to do something.

The status quo required nothing from us - except accepting its consequences.

Waiting can buy you time

And I don’t say any of this to suggest people couldn’t see what was happening.

Many could.

Sometimes you see what’s probably around the corner and hope you can buy a little more time.

Maybe something changes.

Maybe something breaks your way.

Maybe…

you’re not entirely right.

I’ve come to appreciate that more with time.

Sometimes waiting really is the right decision.

It can preserve options.

It can allow new information to emerge.

It can prevent us from acting prematurely.

But waiting is still a choice.

Waiting can buy you time… but time isn’t free.

The business keeps moving while we’re waiting.

Inventory keeps aging.

Shelf space remains occupied.

Product velocity remains lower.

That’s the thing about the status quo.

It isn’t actually standing still.

The status quo is an alternative

When we’re considering something new, we’re usually pretty good at scrutinizing it.

What will it cost?

Who’s going to do it?

What could go wrong?

What’s the expected return?

Fair questions.

But there’s another alternative sitting quietly in the room that doesn’t always get the same scrutiny:

Keep doing what we’re doing.

Doing nothing can be a perfectly legitimate decision.

Waiting can be a perfectly legitimate decision.

But they deserve the same scrutiny as doing something.

And when uncertainty makes the bigger decision uncomfortable, perhaps the next decision doesn’t need to be yes or no.

Maybe it’s simply:

What could we test that would help us make the bigger decision with more confidence?

For lack of a conclusion…

Think about an important decision you’ve been putting off.

Maybe waiting really is the right choice.

It might be.

But ask yourself:

What are we choosing by not choosing?

What are we hoping will change?

What are we preserving?

And what are we paying while we wait?

Then ask one more question:

What could we learn now that would help us make the next decision with greater confidence?

Because doing nothing doesn’t mean nothing happens.

The status quo has consequences too.

And whether we acknowledge it or not…

No decision is a decision.