The Stealth Fee: The Heavy Price Of Pondering A Decision (And 2 Ways To Minimize It)

Read time: 5 minutes

Your eye catches the clock — it reads "1:57 pm."

Glancing around the room, you realize a whopping 57 minutes have elapsed with zero progress in this meeting. Every conceivable rabbit hole has been explored, except the meeting's intended purpose. Then, almost magically, the group awakens to the realization that a mere 3 minutes remain. In a sudden burst of focus, the meeting finds resolution, concluding just in time.

What should have taken 15 minutes spiraled into a 57-minute detour, only to miraculously fulfill its purpose in the final 3 minutes.

This is the epitome of Parkinson’s Law.

And chances are, you've encountered it in various scenarios—meetings, projects, reports, or the end-of-day “email sent confirmation” with the "final final final" version (promptly at 5:00 pm).

Parkinson’s Law is the principle that suggests your work (or task) expands to fit the time allotted for completion.

Understanding Parkinson's Law is crucial because it demonstrates how our work often takes more time than required.

And by forgetting about Parksinson’s Law (or downright denying it), we risk squandering attention and energy.

Lately, I've been grappling with Parkinson’s Law and decision-making. But not the act of making the decision; instead, the space between contemplating and actually deciding.

I call this the judgment gap.

What's the cost of the judgment gap?

As a think-first person, I know how easy it is to go into overthinking mode.

While overthinking isn't inherently harmful, it's essential to recognize when it helps and when it hurts. Decisions fall into three categories:

• Irreversible decisions (e.g., starting a family)

• Reversible decisions with a high cost to reverse (e.g., buying a house)

• Reversible decisions with a low cost to reverse (e.g., choosing a show to watch)

For irreversible decisions, calculated deliberation (i.e., overthinking) is perfectly reasonable and will likely benefit you in the long run. However, with reversible decisions, overthinking incurs a cost of wasted energy, misplaced attention, and postponing the results of the decision.

I don't expect this idea to be groundbreaking, but pause and consider how much time we spend in the judgment gap.

Every decision carries a cost (even the right one), so your task is determining the cost you are willing to bear.

• Making a decision (and not acting on it) incurs a commitment gap cost.

• Avoiding a decision altogether results in a passive acceptance cost (dealing with what's chosen for you).

• Making the wrong decision leads to an opportunity/tradeoff cost.

• Making the right decision incurs a fundamental attribution cost (misattributing success to you instead of the situation)

We inherently understand each of these but forget to account for the costs we also spent in the judgment gap.

Re-enter Parkinson’s Law.

The more space we give to ponder a decision, the greater the costs.

Consider this: you make around 70 decisions a day. Some are instinctual, some take a split second, but a few demand conscious attention. It’s these conscious ones when the cost clock starts ticking.

Every minute in the judgment gap requires you to pay a fee.

Here are the three fees of the judgment gap: work credits, shared credits, and self-credits.

The first are work credits:

Charged during active working hours, this is your "hourly rate" for contemplating a decision. Every hour of pondering equals an hour without revenue (plus energy usage). If your hourly rate is $100, then contemplating that decision costs you $100 per hour.

The second are shared credits:

Charged during active off-work hours, it's the cost of allowing the decision to bounce in your head while doing other things (with other people). This cost involves presence and attention — such as not being fully engaged when playing with your kids.

The third are self credits:

Charged during passive hours with yourself, it's the cost of letting your mind mull over the decision while “me-time.” The cost is recursive thinking and sacrificing enjoyment, rest, or opportunity — such as looking at the book but not actually reading it.

Like the decision itself, it's your responsibility to determine the cost you're willing to bear while thinking about your decision. 

Be mindful because Parkinson’s Law is the fee accelerator.

How do you minimize the impact of Parkinson’s Law on the judgment gap?

While most productivity specialists advocate for shortening meetings or imposing hard stops, I've been experimenting with two nuanced variations:

The first I call the "Default, But" method:

Instead of merely assigning a specific time limit for the decision, I make a default decision immediately and then grant myself time to reconsider. For instance, "My default decision is XYZ, but I'm willing to spend $200 in work credits to change it."

The aim is to go from 1 to 2 (challenge the default decision) and not 0 to 1 (nothing to something).

The "Savvy Casino Gambler" Method:

This is about planning how to make the decision (before even thinking about it), akin to a savvy casino gambler who chooses when to stop playing (in advance). Let me use an illustrative example of buying a yearlong software for $2,000. I’d go through these 5 questions:

• Which type of decision is this? Reversible

• What's the face value cost of the decision? $2,000

• What is the potential value of the outcome? 15 hours of work time saved (at least)

• How much should I reasonably spend to make this decision? 1 hour

• At what point do I incur negative benefits from thinking about it? 2.5 hours — of work, shared, and self-credits before dipping into the value of the outcome.

This means I’d have 1-2.5 hours to make the decision before the decision starts to become net negative.

I realize that this post is a lot. As mentioned, I've been grappling with this idea topic precisely because I want to improve decision-making, and I see others ignoring these costs.

If you have any gut reactions, revelations, or thoughts about this concept, please send me an email — I’d love to hear your perspective.

Thanks for reading.

Peter

P.S. Please share this with a friend, colleague, or even a stranger who runs a business — my goal is to get more business owners to think with impact to master decisions, solve more complex problems, and increase business value.

If you missed last week’s post:

Last week, I wrote:

4 Non-Business Lessons I Only Learned Because I Started A Business

It’s about the four remarkable (yet simple) lessons that have made me a better, richer human, and smarter, more impactful business owner. It will make you one, too.

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Welcome to Impact Thinking.

Hi, I’m Peter. I quit my highly-regarded, 6-figure job at Harvard to build a strategy consulting company in 2019.

I’ll help intellectually minded business owners build business value by channeling strategic, critical, and creative thinking to impact decisions.

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