I’m Krzysztof Nyrek
a Project Manager Storyteller Writer

The Hidden Cost of Decision Paralysis in Projects: How Indecision Destroys Value and Talent in Your Organization

In a fast-paced business world, where the speed of innovation and adaptation is key to survival, many organizations face an invisible yet powerful enemy: decision paralysis. It is a silent drain on resources that does not appear in financial reports as a separate item, yet costs companies millions of dollars a year, inhibits development, kills innovation, and leads to the loss of the most valuable talent. Have you ever wondered how much it really costs your organization each month, quarter, or year to wait for a key decision? The purpose of this article is to expose these hidden costs and provoke reflection on how indecision affects your business and your people.

The silent price of indecision

The project team is waiting in the starting blocks, ready to go. He waits and waits, and time passes. One month, one quarter, the first year, the second year. During this time, directors meet, discuss the topic, consult with lawyers, present the concept to the board, and the board orders an analysis of the idea. Principals return, meet, talk, determine, and consult, but no progress is visible. When asked when we will be able to start the project, they answer: “We still have to determine the final details, and we are going.” However, time passes, and the project still hasn’t started.

On the one hand, this is a normal thing in large companies. It is well known that large projects require extensive analysis and preparation. But do you realize that this time costs money, often more than the project itself!

The problem is that while the project itself has a budget and every zloty is meticulously accounted for, no one counts the time directors spend on decision-making and endless conversations. These costs include not only the direct expenses of maintaining the team, but also the lost benefits of untapped market opportunities that disappear over time.

Speed is the new business currency

In a fast-paced business environment, speed is a currency. It is not without reason that large corporations, seeking greater flexibility, have begun creating startups to test new ideas quickly. Such a startup is free from the paralysis of corporate decision-making. Decisions are made rapidly, and ideas are implemented without unnecessary decision chains.

The only question is, do large corporations really need to create startups to break the deadlock in decision-making? Where does this decision-making inertia come from? This paralysis results in projects in organizations being stuck for long months, and sometimes years.

Speed allows you to react dynamically to market changes, stay ahead of the competition, and win new customer segments. Companies that can make decisions quickly and implement innovations gain a significant advantage, while those that are stuck in processes lose market share and customer trust.

The cost of system stabilization and dilution of decision-making

On the one hand, it is the cost of stabilizing the system. It’s natural for small businesses to be agile because they’re looking for a profitable, repeatable way to make money. When they find it, they create procedures, and the industry begins to scale. The company grows and begins to lose its original flexibility. At this stage, no one is bothered by it yet because the company consistently generates profits. Problems start when the market changes and you have to adapt, and sometimes introduce something innovative to gain a competitive advantage.

Another problem is the blurring of decision-making. While in small companies everything is decided by the boss, who is “at the fingertips” of each employee, in larger companies, there is a formal “way to management” that most people do not have access to. They see the problems they face daily. They see the problems customers face but pass them on to their superiors, only for their voices to get lost in the corporate wilderness.

A supervisor will sometimes mention these problems at a meeting with his supervisor, but he has other problems and does not intend to deal with “individual reports” from employees. In turn, the employees’ direct supervisor spreads his hands and conveys to the reporters that he has passed the topic along, and that they have to wait for decisions that will never come. This lack of clear channels of communication and accountability for decisions leads to frustration, a drop in morale, and, in turn, the loss of valuable ideas that could drive innovation.

Avoiding responsibility for decisions made

Leaders and managers, especially high-level ones, are prepared to make decisions in an uncertain environment, basing their decisions on risk and opportunity assessments. They learn to make decisions in the face of stress and uncertainty, yet in their daily work, they tend to postpone decisions, hiding behind the need to research the topic in depth. It takes time to collect the necessary data and analyze the topic.

Even if you ask the principal, “What do you need to make a decision?” you will not hear a specific need; instead, you will listen to generalities and empty phrases that are impossible to implement. This avoidance of responsibility often stems from a fear of failure, a lack of clear indicators of success, or simply an organizational culture that does not promote risk-taking.

Risk of delaying decisions in time

There is a lot of talk about risk management in an organization. Still, since I have been running projects, I have not seen anyone enter “decision paralysis” into the project risk register. This is quite common in organizations. Not only does it prevent the organization from implementing key projects that may give it a competitive advantage, but it also leads to:

• Erosion of productivity in project teams: Teams that wait for decisions lose momentum and become demotivated. Time spent waiting is time wasted that could be used for real actions. Meetings without concrete results, unclear goals, and a sense of meaninglessness lead to decreased efficiency.
• Killing innovation: Ideas that could revolutionize the market are lost in a maze of bureaucracy and delays. Competition does not wait, and innovative solutions that could give the company an advantage become obsolete before they are even implemented.
• Deterioration in business profitability: Delays in projects mean that new products or services do not reach the market on time, leading to lost market share, lower margins, and customer dissatisfaction. These costs often exceed the project’s budget.
• Talent losses in the organization: The best employees who like to act and see the results of their work will not wait forever for decisions. The frustration of fruitless waiting leads them to seek opportunities to grow in other companies.

Project team costs

Maintaining a project team costs money, whether the team is completing project tasks or waiting for a decision. If we create a project team using body leasing, we limit some costs until the project is launched. But let’s be honest: it’s often used to lease people’s bodies to immediately launch the project after deciding to implement it, and not waste time looking for resources.

Based on average market rates in 2025, the cost of maintaining a small project team consisting of a Project Manager, a Business Analyst, three developers, and a tester is about EUR 107 thousand per month. Maintaining a larger project team, including a Product Owner, three additional developers, and one additional tester, costs about EUR 194 thousand per month. It is easy to see that the cost of delaying a business decision for half a year may exceed one million euros, and we are only talking about the cost of maintaining the project team. However, these amounts are only the tip of the iceberg; the real costs are much higher, including lost opportunities and value erosion.

The advantage of being the first to market

Team maintenance costs are not the only cost of decision-making paralysis. In most industries, being the first gives you a crucial competitive advantage. Sometimes it helps you consolidate your position in the market, and sometimes it enables you to conquer new markets. If you’re not the first, you’re starting to have problems. Customers come to you and say: “The competition has it, and you don’t, where will it be with you?”.

I’m ignoring the fact that an emerging innovation becomes synonymous with a specific solution, and no matter how good a solution you offer, the majority, when thinking about a particular type of solution, will talk about the one that appeared first on the market. For example, “ChatGPT” has become synonymous with widespread access to AI. It is not essential that currently the competition makes better language models available for widespread use; all of them are categorized in the general consciousness as “ChatGPT”, thus becoming the first choice for those who are not proficient in a given topic.

Every company would like that, after all, it’s free advertising and a free source of new customers. It is others who have to prove that they have solutions better than “ChatGPT”. Being the first is not only about innovation but also about building trust and customer loyalty, which in turn drives the company’s long-term value.

Inflation of the Project Scope

Another cost is the inflation of the project scope. Projects that are suspended in the pre-launch phase tend to be more open to adding new functionalities, which will “allow us to gain an advantage on the market”. In combination with decision paralysis, this is an explosive mixture. On the one hand, there is no decision to launch the project; on the other hand, we are expanding its scope, which means we need to revisit valuation, risk estimation, and cost-effectiveness calculations. It’s like a perpetual motion machine; the cycle between scope expansion, pricing, and analysis will never end.

The other extreme is to freeze the project’s scope for the duration of the decision-making process. After half a year, a year, or two years, we finally have a business decision that allows us to launch the project – and what? The first step is to revise the business’s scope and requirements, as they have long since become obsolete. The valuations of the development team, even if they were, are already outdated because the technology stack has changed, key team members have left, and the new analyst sees it all differently.

As a consequence, the project team has to perform a reanalysis and revaluation, which results in the project being presented to the management board again and in the need to convince management to reinvest. In short, we have returned to the starting point, irretrievably losing valuable time and resources.

Erosion of human capital

In the previous paragraphs, I mentioned that talents in a company don’t like to get bored. The best talents like to act; they want to show that they have the knowledge and skills to deliver value to companies. What happens when these talents are waiting for a business decision? They cannot fulfil themselves, they cannot develop, they cannot show themselves and others that they have talent.

The first step is demotivation and cynicism. People begin to doubt the employer’s decision-making, and this lowers their morale and commitment. Why should they make an effort, why should they come up with a solution, if every proposal is met with decision-making inertia? “We would have done it ourselves yesterday” – these or similar phrases are often used at retro or other design meetings. “Couldn’t decisions really be made faster?” – Project team members can’t understand the problem. In project meetings, if a problem arises, the team gathers, talks, and finds a solution. The solution is implemented, and if it doesn’t work, the cycle repeats until a satisfactory solution is obtained. Agile teams do this very intuitively.

On the other hand, at the decision-making level, this mechanism does not work in this way at all. Directors throw beautiful slogans that the organization is Agile. We are agile, and this is our DNA. But there is nothing behind these slogans. Development teams are agile, sometimes entire project teams, but the managerial level? No, Agile doesn’t work here. Here, you have to think; you can’t make hasty decisions.

And what about practice?

Practice says that people learn the fastest by completing tasks. As a rule, we are very weak in predicting the future, but we are great at concluding the past. In Poland, we even have a saying: “A wise Pole after a loss.” On the other hand, the key to success is action; if, instead of acting, we think only conceptually about what will work, then we are doomed to failure in a clash with a company or a team that focuses on action and correcting what does not work. Such a team will launch the product to market, refine it, and, at the end of the day, become the market leader, while we will be thinking about how to make it work.

It is also very likely that the company that implements the solution first will get talent from companies that have remained at the stage of thinking. It must be remembered that talents like to act, add value, and sign off on successes. If a company is in decision-making paralysis, there is nothing to boast about, so the talent working in such a company has nothing to brag about at a meeting with colleagues. So he will be happy to join a successful company.

How to overcome decision paralysis? Solutions and recommendations

Now that we’ve diagnosed the problem and its hidden costs, it’s time for concrete solutions to help your organization regain momentum and efficiency:

Establishing a clear decision-making framework:

Delegate Authority: Define who is responsible for making what decisions at different levels of the organization. In project management theory, it is said that the project manager should be free to decide on changes to the schedule, budget, and quality within the framework specified before the project begins. Is this really the case? It often appears that the PM is responsible for delivering the project, but there is no way to juggle the budget or schedule. Any change in budget or schedule forces him to convene a Steering Committee and have it approve that change. It’s the same with managers: theoretically, they have budgets for various activities, but when it comes to making decisions, they have to get approval from their superiors, and their superiors have to get approval from their superiors, and so on.

So why do managers or a project manager get a budget to manage if they can’t make decisions on their own? After all, we want the organization to work efficiently, which is why we have divided it into smaller units so that management does not have to deal with every matter in the company. So if managers are given a budget to manage, they should be able to manage it within certain limits; if they can’t, or if they manage it poorly, they need to be trained to do it or replaced with those who can.

Decision matrices: Introduce clear responsibility matrices (e.g., RACI – Responsible, Accountable, Consulted, Informed) to specify roles in the decision-making process. Here, as above, we have the management staff in the organization to manage. Not to convene a director’s meeting for every decision and then discuss this decision. The manager taking up the position is given a range of duties and responsibilities. This is its framework within which it can and should act independently. If there is no such matrix in the organization, it must be prepared as soon as possible to enable the teams to operate. Similarly, in projects, before the project starts, it is necessary to prepare the RACI matrix so the project manager can efficiently navigate the organization and know when he can make project decisions on his own and when he needs to obtain approval and from whom.

Decision deadlines: Set realistic but binding deadlines for key decisions. Not having a deadline is an invitation to procrastinate. The private sector laughs at the public sector for being inflexible and very inflexible. However, the budget sector has something that the private sector does not. What? Predetermined deadlines for making a decision. See how this changes the company’s dynamics. If we were to create a table where, in addition to assigning who and what can make decisions, we also include the deadline they must consider for each decision category, wouldn’t that be a huge change? Wouldn’t that set the pace in the company?

In my opinion, yes. Nevertheless, if we have never done this before, let’s give ourselves time to prepare managers for these deadlines. There is a hidden risk here: if we give managers too little time or overwhelm them with too many decisions, they will be inclined to avoid risk, and many proposals may be rejected as a result. As always when changing, I propose an iterative approach to develop a model that will work and, on the one hand, give managers enough time to make a decision, and, on the other hand, add a new dimension of dynamics to the company.

To create a robust structure, many leaders rely on established decision-making models, such as the Cynefin framework described by Harvard Business Review, to help them categorize problems and apply the correct level of oversight.

Building a Culture of Trust and Experimentation

The design environment is highly volatile, and it is almost impossible to avoid mistakes during project management. When we look at a project in retrospect, it is easy to reflect that something could have been done differently. Still, when we make decisions in a changing environment under time pressure, it is very easy to make mistakes. We know this, no one argues with it, but why is there often no consent in organizations to make mistakes? Why do we paralyze projects for fear of making a mistake?

Costs, image, and lost opportunities are clear. All this costs money. We want to minimize risks, that’s obvious. So, I will ask: Does your company keep a global risk register? Does your company keep an international record of mishaps and the conclusions drawn from them? Does everyone have access to it

I know one company where, after a series of costly mishaps, they began to share knowledge about what goes wrong in projects and where we make mistakes. Mistakes were repeatedly made in the same place, so in the following two projects, the procedure was changed, and it worked; the mistakes were not repeated. The problem, however, is that the owner of the area where mistakes were made took this lesson very personally, and the practice was abandoned. Well, some companies can afford to make mistakes.

Acceptance of errors

If you want to avoid repeating mistakes, you need to create an environment where mistakes are treated as lessons rather than grounds for punishment. Obvious, but how to do it? One slogan is not enough; suddenly, people will start admitting their mistakes. The organization worked hard to make sure that people put mistakes under the carpet. They won’t believe you want to change it. It will be a long road, where a lot of patience and a good understanding of change management and how people react to it will be helpful, but it is worth it.

Promoting prototyping

Instead of striving for perfection at the concept stage, encourage rapid prototypes and testing them in real-world conditions. “Fail fast, learn faster” is the key to innovation. Of course, don’t forget about risk and portfolio management on this occasion, but if you want to launch an innovation that will change the rules of the game, you have to try. You have to have a budget for these trials, and you have to know when to say, “Stop, this prototype won’t work.”

Of course, there is one more thing to be careful about: releasing a large number of products that will not meet with a favorable reception can damage the company’s reputation, so it is worth releasing such prototypes under a different brand, and if it works, then release the first, full version under the brand’s own name.

Open Communication

Provide open channels of communication so employees can report issues and propose solutions without fear of losing their voice or being punished for expressing their opinions. A complicated topic for each party in the communication. Employees will be afraid that they will be tracked down and punished, or that no one will read what they are saying. Managers, on the other hand, are usually not ready to accept what people say. If the organization decides to make this move, it will probably be a painful collision with the truth in the first iterations. However, giving people the opportunity to freely describe what does not work in the company or in the product is priceless.

How much time do managers think about what can be improved in the product or in the production process, and nothing comes of it? Everything is ok, but it’s just appearances. The people working in the company know perfectly well which methods are not working and where your product has weak points. This is invaluable knowledge; it is worth taking this step.

Adaptation of Agile Methodologies at the Management Level

I’ve already mentioned this in the previous paragraphs. Still, I’ll repeat it: if the manufacturing teams work agile and the managers and executives don’t, then the company doesn’t work agile and doesn’t understand what Agile is. It is impossible to run a company agilely if half of the company is concreted, and procedural minefields and hierarchical barbed wire surround the path to management. It doesn’t work, but it can be changed.

Decision cycles

Introduce short decision cycles, modeled after Agile sprints. Regular, brief meetings with clear goals and specific decisions. I mentioned it above: if the budget office has deadlines for decision-making, why doesn’t your company? What are you afraid of? Do you want micromanagement or an agile organization? If a nimble organization, ready to take advantage of opportunities and react quickly to emerging threats, management must also work agilely.

Visualize your progress

Let’s go a step further. If you expect your production teams to report on progress in a project management tool, why can’t management report on progress in such a tool? For example, use a kanban board so that everyone can see where the decision is and who is responsible for it. If you add deadlines for making specific types of decisions, the production team will know exactly when they will receive feedback. He can use this time differently than waiting for another day for decisions. They can take care of refactoring, exploring new technologies and opportunities, or maybe solving other problems they are struggling with. In short, it allows them to plan their work in the long term rather than for a single day or a single sprint.

Summary

Decision paralysis is a real and costly threat to any organization. Its hidden costs: financial, innovative, and human, can undermine the stability and competitiveness of the company over time. As executives, you have a key role to play in breaking this deadlock. Don’t wait for the competition to overtake you and the best employees to leave. Get started today by implementing transparent decision-making processes, fostering a culture of trust and experimentation, and setting an example for your teams. Remember that time is the most valuable currency in business, and speed of action is the way to success.

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