SCAR Papers
The Most Expensive Decision
Nobody Is Examining
Why old decisions still run the business, and how to clear one.
Written for managing directors and general managers, chief operating officers, functional heads new into role, and founder-CEOs of scaling firms.
David Maclean · Founder, SCAR Advantage™
The observation
The decision was rational. The conditions changed. The decision stayed.
Every business is still living with decisions someone made years ago. An extra approval added after something went wrong. A spending limit dropped after a loss. A committee set up in a crisis. Sign-off pulled upstairs when the risk was high.
Each response made sense at the time. Then the business grew, the threat receded, leadership changed, or the market shifted. The decision stayed.
Decision drag: the delay and lost money caused by old decisions that still run the business long after the reason for them has gone.
You see it in decisions that take days instead of hours, calls pushed up to people who should not need to make them, margin lost to caution nobody chose, and good people waiting for permission to do work they already know how to do.
We call the old rule a scar: something protective that stayed in place after the danger passed. The scar is where it came from. Decision drag is what it costs you now.
A client engagement
A manufacturer loses several million rand when a supplier fails. Within a month, every order above a set amount has to go to the executive committee. Ten years on, turnover has tripled, the limit has never been raised, and plant managers plan maintenance around a meeting that happens once a fortnight. The supplier problem never came back. Nobody has looked at the limit either.
Why it survives
Businesses remember through habits.
Research on organisational memory shows that experience gets built into routines and stays long after the people who set them up have moved on (Walsh & Ungson, 1991). Painful events leave the deepest mark (Akgün, Keskin & Byrne, 2012).
Routines built to protect us also stop us questioning them (Argyris & Schön, 1978). And the longer an early choice runs, the more expensive it becomes to leave it behind (Sydow, Schreyögg & Koch, 2020).
Weick’s account of the El Faro shows how costly this gets: old assumptions kept answering a question nobody was asking any more, and conditions changed while the routine held (Weick, 2022).
The reason fades. The rule stays, and repeating it makes it feel right. Nobody remembers why the business chose it. Everyone still lives by it.
Find it
Start with the decision costing you the most.
We start with one expensive decision: the one that, if it moved, would free up the most decisions behind it.
The decision itself is rarely a secret. What is hidden is its story: when the rule was set, what it was set in response to, and how much of that still holds. You can only judge a decision once you can see both where it came from and what it costs today.
Doing that inside a working business, without stopping it, is our job.
Clear it
One decision. Thirty days.
The 30-Day Decisive Loop is how we clear one expensive decision. It runs inside your real work. We agree the decision and the starting numbers, clear what is holding it up, and then the decision gets made and acted on under the new conditions.
Thirty days is long enough to hold senior attention on one decision and test the change under real pressure. At the end you have a decision that moved, a clear owner you chose on purpose, and proof of what changed.
Measure movement
Starting numbers agreed with your finance team on day one.
How long this kind of decision now takes.
How often decisions still get pushed up to someone more senior than they need.
What the delay was costing, confirmed by finance.
The numbers come from your own records. Your finance team sets the starting point and checks the money at the end, so the result stands up to the people who carry the number.
Keep it cleared
Conditions change again. Audits arrive, new leaders inherit old structures, and pressure comes back. Letting go of an old rule on purpose is a skill in itself (Martin de Holan & Phillips, 2004). The Hold is our optional ongoing service: we keep a record of why the decision changed and bring it back when leaders face the choice again.
Evidence and method
Built from research, made for real work.
Our approach draws on research into organisational memory, defensive routines, path dependence, dynamic capabilities (Helfat et al., 2007), organisational forgetting and psychological safety. We turned that into a practical way of finding one costly old decision, changing it, measuring what moved, and keeping it from coming back.
In everything we publish we show the starting numbers, what we did, how long we measured for and who checked the result. Made-up examples are labelled as such, and client results only come from real engagements.
A fuller technical note on the measures and the evidence behind them is available on request.
Selected foundations
- Akgün, A.E., Keskin, H. & Byrne, J. (2012). The role of organizational emotional memory on declarative and procedural memory and firm innovativeness. Journal of Product Innovation Management, 29(3), 432–451.
- Argyris, C. & Schön, D.A. (1978). Organizational Learning: A Theory of Action Perspective. Addison-Wesley.
- Helfat, C.E. et al. (2007). Dynamic Capabilities: Understanding Strategic Change in Organizations. Blackwell.
- Martin de Holan, P. & Phillips, N. (2004). Remembrance of things past? The dynamics of organizational forgetting. Management Science, 50(11), 1603–1613.
- Sydow, J., Schreyögg, G. & Koch, J. (2020). On the theory of organizational path dependence. Academy of Management Review, 45(4), 717–734.
- Walsh, J.P. & Ungson, G.R. (1991). Organizational memory. Academy of Management Review, 16(1), 57–91.
- Weick, K.E. (2022). Arrested sensemaking: typified suppositions sink the El Faro. Organization Theory, 3(3), 1–23.
Every business inherits decisions. The advantage lies in knowing which ones no longer earn their place.
If one decision came to mind while reading this, that is the one to bring. Write to david@scaradvantage.com and we will look at it with you.