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Why Decision Latency Is the Hidden Cost on Your P&L

  • Writer: Brainz Magazine
    Brainz Magazine
  • 5 hours ago
  • 4 min read

Dr. Leticia Lilleström is a Strategic CFO, executive advisor, and author specialising in financial leadership, AI integration, and conscious business transformation.

Executive Contributor Dr. Leticia Lilleström

Most companies measure everything except the thing quietly killing value time between “we’re ready to decide” and “the decision is made.” That gap is decision latency. It compounds like interest, but in reverse: IRR bleeds, competitors ship, and your best people learn that speed doesn’t win here.


The image shows a clock, a P&L document, and arrows illustrating the time delay between a proposal and a decision, labeled "Decision Latency."

This isn’t about recklessness. It’s about matching the clock speed of the choice to the reversibility of the outcome, and then running your calendar, meetings, and evidence to that clock.

 

What decision latency really costs


Every week, a decision waits. Three things happen:


  1. Value decay. Windows close, customer momentum cools, and teams context-switch.

  2. Risk drift. More time invites new variables, market moves, politics, and extra “must-have” analyses.

  3. Morale tax. If reversible bets are routinely slowed, people default to safety and stop proposing bold options.


You already pay this tax, you just don’t book it anywhere.

 

Diagnose the latency tax (One afternoon)


  • Time-to-Decision (TtD): For the 10 most material decisions in the last 90 days, count days from “proposal ready” to “decision logged.”

  • Door type mix: Label each as Two-Way Door (reversible) or One-Way Door (hard to unwind). If two-way decisions take > 48 hours, you’ve got drag.

  • Decision journal: Can you find who decided what, when, and on which assumptions? If not, latency is elsewhere too.

  • Calendar signal: Count standing status meetings vs. decision forums. If “status” outnumbers “decision” 5:1, you’re funding latency.

 

A clock for every choice


Match clock-speed to reversibility:


  • Two-way door (reversible): 48 hours. Lightweight memo, owner + 1 reviewer. Default = decide and learn.

  • One-way door (hard to unwind): 7-14 days. One-page memo, explicit options, pre-mortem, kill-criteria, and escalation lane.


The point isn’t perfection; it’s predictable tempo, everyone knows when a call will be made, and what “good enough” evidence looks like.

 

Three operating practices that reduce latency


1. The weekly decision room


Replace sprawling status updates with a 45–60 minute standing forum.


  • Agenda: Options first → Decision → Owners → Risks → (only then) status.

  • Artifact: A one-page Decision Memo (structure below).

  • Rule: If a decision doesn’t fit the clock, de-scope or escalate, don’t park it.


Why it works: You move information to the decision, not the decision to endless meetings. Public deadlines create clarity.

2. The 1-page decision memo


Force clarity without a 40-page deck. Use:


  • Decision & by when (Yes/No)

  • Context (≤5 lines): What’s true; what changed

  • Options (max 3): ROI/learning upside + reversibility

  • Irreversible risks: Mitigation & contingency

  • Assumptions & evidence: Sources; sensitivity

  • Stakeholder impact: Who wins/loses; trade-offs

  • Recommendation: Choice + explicit kill-criteria

  • Next checks: Signals that would change the call

  • Links: Model; diligence notes


Why it works: Inputs can sprawl; one page forces the narrative tension of what, why, and now.


3. Pre-set kill-criteria


If a bet must be unwound, it’s faster (and kinder) to do it by rule, not debate:


  • Define thresholds (date, metric, risk) at funding time.

  • Assign an owner and a review cadence (monthly works).

  • If a threshold triggers, the default is stop or reshape, with a path to escalate on new information.


Why it works: You depoliticise stopping. Latency loves ambiguity; rules remove it.

 

A CFO-friendly scoreboard


Track a few leading indicators:


  • Median TtD (two-way; one-way)

  • Two-Way Door SLA Hit Rate (% decided ≤48 hours)

  • Decision Yield (% delivering expected value/learning within 90 days)

  • Kill Rate (% of funded initiatives stopped/reshaped per quarter)

  • Meeting Mix (decision forums vs. status meetings)

  • Proposal Throughput (are people still bringing options?)


Report monthly in the exec pack; capital productivity and culture will follow the numbers.

 

Common failure modes and fixes


  • More data syndrome. If it’s reversible, act and instrument learning; if it’s not, timebox diligence and commit to a date.

  • Consensus confusion. You don’t need everyone to agree, only to feel heard and see the logic. Record dissent, then move.

  • Calendar creep. Guard the decision-room agenda. If updates don’t change the choice, send them asynchronously.

  • Vague risk. Require likelihood + impact + mitigation; otherwise, park it.

 

A quick vignette


A mid-market tech company had a six-week lag on reversible choices. They set two clocks (48 hours for reversible; 10 days for irreversible), installed a weekly decision room, and switched to one-page memos. In one quarter:


  • Two-way decisions fell from 19 days to 2 days

  • Release cadence improved 30% without extra headcount

  • Portfolio reviews started celebrating smart stops, capital exited mediocre projects, and funded winners


The product didn’t magically get better. The clock did.

 

Your 14-day latency sprint


Day 1-2: Audit 5-10 recent decisions; label door type; compute TtD.

Day 3: Publish the two clocks; send the decision-room invite.

Day 4: Share the 1-page memo template.

Day 5: First decision room, make two real calls.

Week 2: Track SLAs; write the first kill criteria; remove one meeting that steals time from decisions.

Day 14: Share the scoreboard; choose one practice to improve.


You’ll feel the difference before you measure it.

 

Bottom line


You can’t remove uncertainty from leadership, but you can remove indecision. Set the clocks. Shorten the distance from proposal to decision. The savings won’t appear as a neat line on the P&L, but you’ll see them everywhere else: time back, focus up, momentum restored.


CTA: This week, run one Decision Room with two real decisions and a single page each. Hold the clocks. Create value faster, not by knowing more, but by deciding on time.


Visit my website for more info!

Dr. Leticia Lilleström, Strategic CFO & Executive Advisor

Dr. Leticia Lilleström is a Strategic CFO, executive advisor, and published author with over a decade of experience in finance, leadership, and business transformation. Bridging analytical precision with emotional intelligence, she guides organisations into future-fit strategy, AI integration, and conscious growth. She is known for her bold voice and her commitment to redefining wealth beyond numbers.

Books by Dr. Lilleström:



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