What are Type Two and Type One Decision?

These are two categories of decisions identified by Jeff Bezos, founder and CEO of Amazon, Inc. In Bezos’ own words:
 

What are TYPE 1 DECISIONS?

“Some decisions are consequential and irreversible or nearly irreversible – one-way doors – and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. 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. We can call these Type 1 decisions.”

What are TYPE 2 DECISIONS?

“But most decisions aren’t like that – they are changeable, reversible – they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups.”

IMPLICATIONS FOR DECISION MAKERS

Bezos says, “As organizations get larger, there seems to be a tendency to use the heavy-weight “Type 1″ decision-making process on most decisions, including many Type 2 decisions. The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention.”

He also pointed out that the opposite is perhaps even worse: “Any companies that habitually use the light-weight Type 2 decision-making process to make Type 1 decisions go extinct before they get large.”