A Lot of Good Business Decisions is Just Figuring Out What You Don’t Want
Learning the art of subtraction
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18 months ago, my co-business owners and I turned down the opportunity to refurbish a beautiful four-storey Georgian building in Manchester city centre. Not because we couldn’t do the work — we’d already completed a smaller, similar scheme two years before. Not because the margin was wrong — it would have been our largest ever contract. We turned it down because the client had a particular kind of energy. The sort that tells you the relationship will cost you, and your reputation.
All it took was eight words in a pre-start meeting: “I don’t want to hear about price increases.”
Thinking about making decisions is additive. Frameworks for evaluating options, scoring criteria, weighing upside. The whole apparatus of good decision-making, as it’s usually taught, is about getting better at choosing what you want.
The more durable skill is the opposite. It’s subtraction. Building a clear picture of what you won’t do — and trusting your gut when the moment arrives.
This isn’t exactly a new idea. It shows up across disciplines under different names.
The Stoics called it via negativa — the idea that you understand something more reliably by what it isn’t than by what it is. Taleb borrowed it for investing: remove the fragile, and what survives tends to be worth keeping. Munger called it inversion — “tell me where I’m going to die, so I’ll never go there.” Buffett built the too hard pile as a literal mechanism: a category of decisions not refused individually but pre-refused as a class. The pile doesn’t require fresh analysis every time. The work was done once.
What these frameworks share is the same underlying logic: subtraction as decision technology. You’re not picking from a menu. You’re shrinking the menu until only the obvious things remain.
Most operators have a wish list for the work they want. Very few have an exclusion list. The ones who do tend to move faster — not because they’re smarter in the moment, but because the moment requires less of them.
The exclusion list does the cognitive work in advance. This client profile was just a hard no. It wasn’t that we tried to squeeze more money from clients — it was that he’d already delayed the job by two years (construction materials and labour invariably go up at least once a year), hadn’t paid a penny to the design team who’d designed his project, and very much thought of himself as some sort of private equity geezer. He even turned up to a meeting with a Great Dane in tow. I can only assume he was trying to intimidate us. His problem was he thought that bringing a dog to a meeting with prospective contractors would do that.
Examples like this also sharpen your circle of competence — not as an abstract boundary, but as a working document. Knowing what you won’t touch tells you more about what you actually are than any mission statement.
The hard part isn’t making the list. It’s trusting it when something sits just inside the line and the upside looks attractive. That’s when the list earns its keep.
What’s on your exclusion list — and have you ever written it down?
Until next time, Karl.
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Incase you missed it
The second instalment of my How to Understand Financial Statements series explains how to master the balance sheet. Warren Buffetts first statement he picks up. The first instalment on understanding the income statement can be found by clicking here.