Decision Thinking · Lesson 3 of 4

Reversible decisions and second-order effects

"And then what?" asked three times is the cheapest protection against a plan that works exactly as intended.

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Reversible decisions should be made fast; irreversible ones deserve the slow pass. Much time is lost agonising over reversible choices and much damage done rushing the other kind. Ask first: if this is wrong, what does it cost to undo?

Second-order effects are what happens after the thing you intended. You cut prices, sales rise — and then your best customers learn to wait for discounts. The first-order effect is what you planned for; the second-order effect is what you live with.

The habit is one question asked twice: and then what? Ask it two or three times past where you would normally stop. Most avoidable damage lives one step beyond the plan.

See it happen

You are considering cutting your prices by 30% to win a stalled deal.

The read that arrives on its own

It gets the deal over the line and we need the revenue this quarter.

The same situation, with this idea

And then what? They sign. And then what? They mention the price to the two customers who referred them. And then what? Either I hold two prices for the same thing, or I have repriced the whole book.

What changed

Three rounds of "and then what" turned a reversible-looking discount into a decision that is very hard to walk back — and that is the distinction worth spending time on.

The takeaway

"And then what?" asked three times is the cheapest protection against a plan that works exactly as intended.

Easy to take the wrong way

Spending equal care on reversible decisions. Something you can undo next week should be decided fast; saving the deliberation for what cannot be undone is the point.

Try this

Take a decision you have made. Follow it out three steps: then what, then what, then what?