Hacking Fredkin’s Paradox in Business

Written by Nikolai from Income|Outcome


“…a man, being just as hungry as thirsty, and placed in between food and drink, must necessarily remain where he is and starve to death.”

Aristotle, On the Heavens (c.350 BCE)

So are you more hungry or more thirsty? In this particular situation that distinction seems important.

You know that indecision can cripple your business and prevent you from taking the big-payoff risks necessary to innovate and stand out from your competition. It is an unavoidable reality that you, as a business leader, must make many decisions every day, some of them last minute.  Experience and wisdom can guide you easily through the simple divergence between a wise path and a foolish one, but what about the ones where the options seem very similar?

Enter Fredkin’s Paradox.

Named after Dr. Edward Fredkin, a renowned physicist and professor, Fredkin posited that “the more equally attractive two alternatives seem, the harder it can be to choose between them—no matter that, to the same degree, the choice can only matter less.”  Following a similar philosophical path as Aristotle, Fredkin highlights a paradox in which seemingly nominal decisions can hang us up and distract from more important tasks.

To be clear, not all decisions are the same.  And sometimes you spend more time making a decision than you should.  Fredkin’s paradox expresses a loss in motion that occurs without the presence of superficially observable right or wrong decision.  These situations strangle our forward momentum and can be enough to sway us from the important items in our business life – the decisions that really need our attention.

It’s why we stand in the grocery store aisle for an eternity trying to choose between two major peanut butter brands, similarly priced with little-to-no difference between them, even though our final choice has no lasting impact on our lives.

While you may recognize the paradox in your personal life, it’s also a very real issue in businesses.

The Problem

There should be no Fredkin’s paradox in business decision-making.  Lack of financial acumen and holistic business thinking make options seem equal.  

Immobilization of your leaders.  Frankly, there are times that leaders are can’t “do the math”.  They see the problem and solutions – the “fork in the road”, if you will – but shortsightedness causes them to push forward ignorantly or otherwise be immobilized while they struggle to make a decision between solutions that appear to be the same, at least superficially.  They never fully understand, and that can neutralize even the most competent leader.

From hiring decisions to choosing a CRM system to prioritizing one deal over another, the ability to lead well is inhibited when a certain lack of depth causes decisions to seem too similar.  Leaders in business are increasingly unequipped to sufficiently see the potential in each option and understand how it is the right decision for the company – much less to be able to do it quickly.  They are most often caught in Fredkin’s paradox when they’re unable to thoroughly assess the outcome of the choices with which they’re presented – to see “down the road”.

Personal Paralysis.  It’s happening to you, too.  It’s easy for us to blame this on our leaders, but the buck stops (and starts) with you.  Inasmuch as you have been the guiding force for the vision and subsequent structure of your company, equipping yourself first is of great importance because only then can you begin to help your leaders.  How can you teach them to see something you cannot?  Demonstration is perhaps the best teacher and you are the leader of leaders.

This inability to assess, for instance, how one inventory management program has a better impact on non-cash working capital than another reveals a insufficiency in financial acumen and holistic business thinking.  Still, acumen alone is insufficient without the foresight necessary to understand the cause and effect.

The Solution

Equip leaders.  

Connect yourself and your leaders with the information and training needed to recognize, assess, and understand problems quickly and effectively.  Leaders must be able to address the areas where their staff lack knowledge or experience insufficiencies so that business and financial depth may continue to grow.

And in order to guarantee more consistent momentum, this never stops.  It just gets a little easier and becomes reproductive.  Having this as a priority negates a great deal of future issues and reveals considerable foresight on your part.

Hack the paradox.  

[Tweet “Seeing not only the fork in the road, but where each road goes, allows us to hack Fredkin’s dilemma.”]

We don’t want to remove decision-making from our leaders, but to leverage it to our advantage.  This requires be an environment where holistic thinking and business acumen can be allowed to play out without huge risks to the business itself.

A good business simulation provides this environment, one where  it is impossible to ignore the interconnections of information flow and the financial impact of business decisions across all departments.  It gives leaders the chance to play out scenarios and see how their decisions impact the bigger picture.

Eventually, there is hope for an “ah-hah” moment!  As they encounter real-life business scenarios, leaders learn to answer questions such as:

  • How will this decision affect the KPIs we measure ourselves by?
  • What other areas of the business will be impacted by this decision?  
  • Can I see the short-term and long-term financial consequences?  
  • Can I determine if this decision is directionally appropriate?  
  • Am I aligning with the Executive Team’s strategic direction?  
  • If I am faced with multiple good ideas with approximately equivalent outcomes, which one aligns best?  

As financial acumen grows, so does one’s ability to read and interpret things like cash flow forecasts and budgets.  Along with growth in holistic business thinking, this provides a strong base that allows us to hack Fredkin’s paradox.  Strong leaders, which are also often sifted and/or refined through this process, understand how to map criteria to the strategic plan and no longer waste time analyzing the wrong things or use poor methods of analysis.  Not only can they “do the math”, but also “show their work”.  

And when reinserted into real life business where decisions matter, they are more competent.


[Tweet “Decision-makers within your business don’t have to fall victim to analysis paralysis”]

With the right training and tools, you and your staff can confidently assess the options at hand and use a holistic approach in confidently making the best decision without hesitation.  The newfound confidence is becomes rooted in deeply understanding the scenario instead of business bravado.

Let us help you break out of Fredkin’s paradox by equipping you and your team to make holistic business decisions with an increased financial acumen.

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