Self-made billionaires Richard Branson and Jeff Bezos reveal how they make tough decisions

Richard Branson: This is the most 'effective' way to make a good decision
Richard Branson: This is the most 'effective' way to make a good decision

If you're relying on the same decision-making process each time you have to make a tough choice, you're going about it all wrong, says billionaire and Virgin Group founder Richard Branson.

Branson writes in a recent blog post that smart leaders know to make a decision based on the specific nuances of each issue. And the most effective way to do that, he says, is by first determining if it's a one-way or two-way door decision.

Richard Branson used a two-way door approach to launch Virgin Airlines.
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One-way door decisions are irreversible or nearly irreversible while two-way door decisions are reversible, explains Branson. So you should tailor your decision-making strategy to which type of decision you have to make.

It's important to note that most decisions we make are not one-way door decisions, writes Branson. "They are two-way door decisions. Even if they seem definite, they are actually reversible."

By this, Branson means that you can come to a conclusion, test it out and tweak it as you see fit. The entrepreneur compares this form of decision-making to walking through a door: "You can walk through the door, see how it feels and walk back through to the other side if it isn't working," he writes. "For a business trying to be innovative and nimble, its leaders need to make plenty of two-way door decisions."

This theory is one that Amazon founder Jeff Bezos prescribes too. In Bezos' 2016 annual shareholder letter, the CEO writes that in the past he made the mistake of approaching all decisions as "one-way door" decisions. However, this type of decision requires a process that it very specific to the issue.

Jeff Bezos
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"[One-way] decisions must be made methodically, carefully, slowly, with great deliberation and consultation," he writes. "If you walk through and don't like what you see on the other side, you can't get back to where you were before."

But like Branson, he notes that people have a tendency to use the "heavyweight" one-way decision process on two-way decisions, which is a mistake. When you use a "one-size-fits-all" decision making process, writes Bezos, it leads to "slowness, unthoughtful risk aversion, failure to experiment sufficiently and consequently diminished invention."

In his blog post, Branson writes that within an organization, it results in "slow processes, lengthy, laborious meetings, a loss of momentum and ultimately less progress."

In fact, selecting the correct decision-making approach is something Branson always tries to keep in mind. For example, when Virgin Atlantic was launched, he made a deal with Boeing to give back the plane if the airline didn't get off the ground within a year. "Thankfully, we never had to," he writes. "But if the things hadn't worked out, I could have walked back through the door."

Branson acknowledges that some decisions require careful thought over a period of time. But these are far and few between, he says. "The key is being able to spot which decisions are one-way and which are two-way doors," explains Branson. "Make decisions, learn and improve."

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Richard Branson: This is the most important skill to be successful
Richard Branson: This is the most important skill to be successful