The cost of indecision: how much money companies lose by not deciding

Series: Decisions that Move the Needle: Article 1 of 10

There is an expense that does not appear on any income statement, that no one budgets for, and that nevertheless drains more cash than many cost items combined: the cost of decisions that no one dares to make. The project that has been "under review" for months. The hire that has been approved in theory for two quarters. The campaign launched "after the season ends." None of those things appears as an accounting loss, but all of them consume capital, energy, and market window.

This article does not intend to moralize about executive procrastination. The objective is more practical: to size how much not deciding really costs, to show what the evidence says about the relationship between decision velocity and financial performance, and to provide a simple procedure so that any SMB can audit its own "indecision account" this very week.

What the evidence shows: indecision is a measurable cost

The most frequently cited source on the topic comes from McKinsey & Company. In its global survey on decision-making, the consulting firm calculated that, for managers of an average Fortune 500 company, decision inefficiency translates into more than 530,000 days of lost working time and roughly US$250 million in wasted labor costs each year (McKinsey, 2019). It is worth pausing on that number: it is not the cost of making bad decisions, but the cost of making them late or poorly managed: duplicate meetings, approvals escalated without criteria, decisions that are remade three times because no one assigned an owner.

The same McKinsey research found that executives spend an average of nearly 40% of their time making decisions, and that 60% of them believe that time is poorly used (McKinsey, 2023). Translated to the reality of an SMB: if your executive workweek is 50 hours, about 20 hours are spent making decisions, and probably a good portion of them on decisions that someone else could (and should) be making with criteria defined by you.

The key point that the evidence reveals is that slow is not the same as careful. McKinsey data shows that organizations that decide quickly are nearly twice as likely to make high-quality decisions as those that decide slowly (a factor of 1.98 in their survey) (McKinsey, 2019b). The executive intuition that assumes "if I take longer, I make fewer mistakes" is not only false: excessive analysis usually produces worse information, because the context of the problem has already changed by the time the decision is made.

And the relationship with money is direct. Bain & Company, which studied the "decision effectiveness" of thousands of companies for years, found a 95% correlation between companies that excel at making and executing key decisions and those that achieve top-tier financial results (Bain & Company, 2012). In a subsequent analysis, they measured that, on average, companies that excel in decision-making and execution return to their shareholders more than 4 times what their peers return over a five-year period (Bain & Company, 2020).

Where the cost hides: the three invisible billions

When a decision is delayed, the damage does not arrive as an invoice. It arrives through three channels that almost no one tracks:

1. Opportunity cost of the market window. The opportunity has an expiration date. A channel that is cheap today, a segment that is underserved today, or a partner that wants to partner today will not wait for your committee cycle. The perverse part is that this cost is never invoiced: the company simply "did not grow," and non-growth has no assigned owner.

2. Cost of delay in internal projects. A key hire delayed by three months means three months of productive capacity that does not exist, of clients who were not served, and of extra burden on the existing team. Add the same to a technology decision, a price change, or opening a channel: each month of delay accumulates resources spent on maintaining the current situation, which is exactly what you want to change.

3. Decision quality cost. The central paradox of indecision: waiting does not improve information, it degrades it. The data you used to make the decision in month one is already old history by month four. Deciding late is not deciding with more certainty; it is deciding with an outdated map and, on top of that, with less room to correct.

Added to this is a cultural effect that any midsize team knows: when decisions are delayed, the organization learns to wait. People stop making proposals because they learned that proposing does not lead to decisions. The decision speed at the top ends up being the maximum speed of the entire company.

The cost of indecision in an SMB: a conservative estimate

If your company is not Fortune 500, how do you translate this to your scale? An honest (and conservative) exercise is to audit only executive time: take the decisions that are currently pending, estimate how many weekly hours of how many people the meetings, reports, and follow-ups generated by each one consume, and multiply that by the real hourly cost. It is not an accounting figure, but it is real: it is money you are paying for not having a decision-making process.

Then add the most painful channel: frozen projects. Each initiative approved but not executed carries three associated costs: what you have already invested (and depreciates while you wait), what it will cost to implement when the context is worse, and the revenue that did not come in while no one was deciding. None of those three numbers appears in your accounting, and all three are direct consequences of the delay.

Framework: the decision inventory (audit in 5 steps)

This is the minimum tool to stop guessing how much not deciding costs you. It is a table; complete it with your team in a 90-minute session.

Two golden rules for that inventory. First: most operational and tactical decisions are reversible and should be made in days, not months (later in this series we dive deeper into Bezos's one-way and two-way door matrix in the article on the founder's bottleneck). Second: the cost of a medium decision made on time and corrected quickly is almost always lower than that of a perfect decision made three months later. The McKinsey evidence on speed and quality cited above exists precisely because that pattern is systematic, not anecdotal.

How to start this week

1. Run the decision inventory in a single meeting. Do not delegate it as "homework"; the 90-minute session with the executive team is the starting point.
2. Choose the 3 most expensive decisions by delay (not the most important: the most costly to wait on) and assign them an owner and a deadline this very week.
3. Set up a decision SLA: no tactical decision remains open for more than 15 days without an owner and without a deadline. If by that date there is not enough data, decide with what is available and document the rationale.
4. Measure the effect in 90 days: closed decisions per month before and after. That delta is the first metric of "executive velocity" your company will have.

Indecision is the only decision made by default, and it is the most expensive one on the menu. The first step to stop paying for it is to make it visible in a spreadsheet, with an owner and with a deadline. The rest is execution.

Sources consulted

1. McKinsey & Company (2019). Decision-making in the age of urgency. McKinsey Quarterly. Accessed October 14, 2026: https://www.mckinsey.com/capabilities/people-and-organization/our-insights/decision-making-in-the-age-of-urgency
2. McKinsey & Company (2023). How to make better decisions in the age of urgency. McKinsey Guide to Excelling as a CEO. Accessed October 14, 2026: https://www.mckinsey.com/featured-insights/mckinsey-guide-to-excelling-as-a-ceo/how-to-make-better-decisions-in-the-age-of-urgency
3. McKinsey & Company (2019b). Three keys to faster, better decisions. Accessed October 14, 2026: https://www.mckinsey.com/capabilities/people-and-organization/our-insights/three-keys-to-faster-better-decisions
4. Bain & Company (2012). Score your organization to improve decision effectiveness. Accessed October 14, 2026: https://www.bain.com/insights/score-your-organization-ame-info
5. Bain & Company (2020). Tested by Fire: Three Keys to Making Better Decisions Through Disruption. Accessed October 14, 2026: https://www.bain.com/insights/tested-by-fire-three-keys-to-making-better-decisions-through-disruption