James Dyson does not usually retreat, so when the billionaire founder of the United Kingdom consumer electronics group last week abandoned his project to build an electric vehicle in Singapore, it was a surprise. He confessed to employees his regret at ditching a “fantastic car” in what was described as “a humbling U-turn”.

Humbling, but probably wise. Mr Dyson is unsentimental about unsuccessful experiments. “Didn’t charge enough. Learnt that lesson,” he once told me about Dyson’s failed attempt to make washing machines. Better to admit defeat now than after having thrown away hundreds of millions.

For any business to thrive, difficult decisions need to be made. This applies not only to new projects but to corporate strategy.

John Flint was ejected as HSBC chief executive in August because Mark Tucker, the bank’s chairman, thought he was avoiding hard choices.

“The job of the CEO, everyone knows, is to make decisions,” wrote Ram Charan, a veteran strategy adviser.

This is especially true when entire industries are facing disruption to their business models. Manfred Knof has taken over as head of retail banking at Deutsche Bank with a warning that he has only “a modicum of patience” about pushing through €1.4 billion in annual cost savings. He must be keenly aware that executives do not have long at Deutsche to prove their worth.

Compare that with Boeing, which was last week accused of indecisiveness for having waited so long to split the roles of chairman and CEO following two fatal crashes of its 737 Max jets. Having assured investors this year that there was no need for him to take over from Dennis Muilenburg as chairman, David Calhoun, Boeing’s lead independent director, altered course.

Indecision is common in companies facing myriad possibilities, when executives are struggling to assess alternatives for future strategy. Many managers become frustrated by the glacial pace of corporate decision-making. McKinsey, the consultancy, surveyed executives who complained of “over-reliance on consensus and death by committee”, among other irritations.

It is not always the chief executive’s fault. Some managers are comfortable with making simple decisions but struggle when they are promoted to a level where they are exposed to ambiguity and uncertainty. They need to employ their judgment, rather than consulting the data like an oracle.

Their indecision can also infect the CEO. “It’s not a democracy. I’ve seen some executives become prisoners of their direct reports. They succumb to endless debate, or they may just want to be liked,” said Prof Charan in a Harvard Business Review article tartly headlined, “You Can’t Be a Wimp.”

Noel Quinn, now promoted from head of commercial banking to interim CEO at HSBC, uses a “five second rule” to prompt executives who report to him to reach decisions. After they have summarised the alternatives and options for any strategy, he tells them to pause a few seconds and pick one.

He allows time after that for executives to ponder further on their instinctive choices and change their minds if they wish. But being forced to use intuition after considering the evidence helps to avoid being paralysed by a question when there is no easy answer.

There are rewards for being decisive, beyond the risk of the company drifting and you losing your job if you are not. Investors and the media are drawn to confident stories and dislike uncertainty. There is no point in holding a strategy day if you cannot settle on a strategy, or say how it will be executed.

It is also more enjoyable, both for the chief executive and the rest of the company. Daniel Kahneman, the Nobel Prize-winning psychologist, observed that “managers think of themselves as captains of a ship on a stormy sea” who respond skilfully to the elements around them. It feels better to pick a destination and sail in that direction than to wallow around.

But Prof Kahneman won his economics Nobel for research on the cognitive biases that affect human choices. Making quick decisions, even informed by experience and expertise, is valuable but not foolproof. As he noted, “intuition feels just the same when it’s wrong and when it’s right, that’s the problem.”

Those who consider a challenge from all angles and act prudently and decisively may still be wrong. “Even highly experienced, superbly competent and well-intentioned managers are fallible,” Prof Kahneman wrote.

Among the traps is the “halo effect” of believing that an executive who has succeeded before will make any project work. It follows that leaders should not be trapped by their decisions, or the confirmation bias of believing that the chosen path must be correct.

Mr Dyson was clear-headed enough to abandon his electric vehicle despite having declared his belief in it publicly and hired 500 staff. Having crossed the Rubicon, he crossed back when he discovered rough terrain on the far side.

It is tougher when a leader puts the entire company on another course, only to discover the pitfalls. It may take a successor to come along and reverse those choices. But decisions will at least prove right some of the time; indecision is always mistaken. FINANCIAL TIMES

ABOUT THE AUTHOR:

John Gapper is associate editor and chief business commentator of Financial Times.