Over the course of a day we make hundreds of decisions. Many, in the great scheme of things, are inconsequential – blue shirt or yellow shirt, mustard or mayo, checkout aisle 6 or 11. However, when we’re at work, some of our decisions might have a bit more impact – this new region or that new region or both, this new employee or that new employee, abandon this product or invest a bunch of money into marketing it for another quarter or two. These types of decisions affect the lives of people, the trajectory of our company and the amount of money we make or lose in upcoming quarters.
So what if we could get better at decision making? Let’s agree up front that every decision carries risk. We can’t “good decision” our way out of every fork in the road and remove risk. Most of us fall victim to, what those who study decision-making call, “resulting”. We believe if we get good results, we made a good decision. If we get bad results, we made a bad decision. Let me illustrate. The odds of winning on any given number at the roulette table are 1 in 37. If you walk up to the table, place your chips on 5 and the little ball goes into the 5 on the wheel, you might believe you made a good decision. In reality, you made a bad decision (the math was against you) but got a good result. Conversely, if you hire a salesperson with experience in your industry, stellar credentials, a history of strong sales and equip them with every resource they need to sell your product and they fail miserably, you more than likely made a good decision, but got a bad result. Just one of the foibles that we, as humans, struggle with as we evaluate our decisions.
So how do we up our decision-making game? In this week’s One Year, Thirty Minute Challenge, I encourage you to spend your thirty-minute exercise piecing together a decision-making framework that you’ll use when your organization is faced with a decision. I’ll give you some thought starters and you can grab what works for you and add your own.
- What empirical data can we bring to bear on the decision? It’s easy to fall in love with people, products, places and processes. Can we put our hands on data that will give us objective information – sales numbers, number of defects, number of returns, sales by location, sales by hour, sales by salesperson, production per assembly line, bounce rate for the landing page.
- How can I remove my ego from the decision? It’s tough to divorce yourself from a person or project that you’ve poured yourself into. In reality, you are not what you do. You still have worth and you’re still smart, even if the object of your affection is looking questionable. Recognize this for yourself and recognize that others in the organization will have similar feelings towards the people and things they’ve invested in. Step away – and help them step away. Two more things on ego. First, we love our own ideas and struggle to see how they might have a couple of holes. Second, we love information (both empirical and anecdotal) that supports our position and tend to discount information that opposes our position. Be on guard against both of these things.
- Enlist the collective genius of the people most affected by the decision. If I could list the most frequent management screw-ups, this would be close to the top – people not familiar with the intimate details of the work, trying to improve the work. In reality, the people who do the work are most qualified to improve it. Get input from employees, customers, and vendors – whoever can help you assemble the largest body of knowledge on the subject about which you are making a decision. One important thing – an outside perspective does help because people are occasionally so blinded by the forest, they can’t see the trees. But I’d err on the side of getting lots of input from those in the know.
- Get help from someone who’s made similar decisions. The Israelite King Solomon said, “There’s nothing new under the sun.” True when he wrote it 3000 years ago. Still true now. Find someone who’s faced a similar situation and pick their brain.
- Propel your self forward and look back. As much as you can, transport yourself to the end of every fork in the road (all the possible decision options) and look backward. Things might seem much clearer – after all, hindsight is 20/20. What would have to go right to get here? What could go wrong on the way to here? Can I live with the consequences of the things that might go wrong? What are the probabilities for each of these things going right or wrong? Conduct a pre-mortem – in your head, jump to the end of the decision, assume it failed miserably then ask, “What did we screw up that caused this?”
- Would you put money on this? I wish I could claim credit for this idea, but it comes from Annie Duke’s brilliant book, Thinking in Bets. She encourages her readers to ask themselves, “would I bet on this?” This moves the discussion from theoretical to financial. Before we bet on something, we contemplate the probability (run or pass, cover the spread or not cover the spread). Our emotions (we love our team and hate the other team) are eclipsed by the reality of what could happen to our wallet.
- Find a contrarian. Seek out someone to poke holes in the decision you’re narrowing in on. They can be inside or outside the organization. Encourage them to pick it apart personnel-wise, strategically, operationally, and financially.
- Festina lente. Caesar Augustus adopted this motto – Make haste, slowly. Make decisions quickly but deliberately. Don’t fall victim to paralysis by analysis, but don’t fire from the hip. Good decision-making is thoughtful and complete but with a bias for action.
Following these steps, or any others for that matter, won’t result in perfect decision-making. There’s no such thing. We’ll still be duped by the poor decisions that have good results (thinking they were good decisions), puzzled by the good decisions that have bad results and feel smug about the good decisions that yield good results. Our best hope is that we optimize our methodology.