Decision Making

Don’t go it alone

A single individual will never outperform a great group of leaders working together effectively. Dependence on one person creates much key man risk, limits expertise and fails to establish checks and balances. It also creates a burden as there is generally too much to analyze, evaluate and do. This can be difficult for CEOs and senior leadership, but it is important to realize that to be effective you must not let your need to be right be more important than the need to find out what’s true. Ego and blink spots are the fatal flaws that keep intelligent, hardworking people from living up to their potential. Prideful individuals learn less, make inferior decisions, and fall short of their potential.

Radical open-mindedness and radical transparency are invaluable for rapid learning and growth. By studying other organizations that had to deal with similar issues will better prepare you for comparable situations in the future, potentially allowing you to avoid costly errors or mistakes altogether. It’s rarely harmful to at least hear an opposing point of view since the quality of the information you have determines the quality of your decision making. Those who can change their mind are the biggest winners because they are open to learning something new. Those who stubbornly refuse to see the truth are the real losers.

Establish a process

Recognize that decision making is a two-step process. First, collect as much relevant information as possible. Then decide what to do. Agreement and common understanding should exist on how the decision-making process itself will work (who has a voice vs. who has a vote, voting criteria etc.) so that when disagreements arise, an established process can be followed to push through to resolution without getting caught up in endless debate. It’s even more important that decision making is evidence-based and logical when a group of people are working together. If not, decisions will be dominated by the most powerful rather than the most insightful which is not only unfair but suboptimal. People should be able to focus on whether the decision making process was fair vs. whether they got their way.

Reflect then Project

Strive to be radically open-minded and embrace reality. Don’t confuse what you wish were true with what actually is. Reflect on the past to set future plans in context. By replaying the story of how you ended up where you are now, you will be more able to accurately visualize what you must do in the future to reach your ultimate goal. By reflecting on the journey, you have the opportunity to highlight the essential moments with the most significant consequence, and draw attention to how it affected the overarching strategy.

A hierarchy should not exist. Decisions should be rooted in underlying reasoning and supported by data, not the position or title of the individual suggesting the solution. The best ideas should win out no matter who suggests them. Decisions should be considered as expected value calculations with the best choices having more advantages than disadvantages. Not the ones that do not have any disadvantages at all.

Embrace Disagreement

Thoughtful disagreement and conflict in the pursuit of truth and excellence is a terrific thing that should be encouraged (and not avoided). Participants should be willing to share their perspective and shift opinions as they learn. Don’t let pain stand in the way of progress.

Approach disagreements in a way that conveys that you’re trying to understand each other. Use questions rather than make statements and seek common understanding before sharing your perspective or moving on. Discussions should be conducted in a calm demeanor. If needed, use a 2-minute rule where neither party interrupts the other so that they get all of their thoughts out. Describe back to the person you disagree with their perspective. Repeating what you’re hearing reinforces you are listening and emphasizes that you understand their perspective. This can be invaluable in gaining alignment and increases the likelihood that they will reciprocate, making a more conscious effort to return empathy and appreciate your perspective. Alternatively, a useful question to re-center a disagreement is to ask “Are we going to try and convince each other that we are right or are we going to open-mindedly hear each other’s perspectives to try and figure out what’s true and what to do about it?”. This encourages and re-establishes open-minded and assertive dialogue. If either party is too emotional to be logical, then conversations should be deferred. When possible, pausing for a few hours or even a few days can often be the best approach.

Apply the Pareto Principle

It is also important to know when to stop debating and move on agreeing about what should be done. The Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity) states that, for many events, approximately 80% of the effects come from 20% of the causes. Italian economist Vilfredo Pareto originally demonstrated that 80% of the land in Italy was owned by 20% of the population; however, the axiom applies equally well to business (80% of sales come from 20% of clients) and many other natural phenomena have also been shown empirically to exhibit a similar distribution. Founders and Business leaders should apply this principle during the decision making process. Understanding this rule saves you from getting bogged down in unnecessary detail once you’ve gotten sufficient learning and insight to make an informed decision. There are typically only 5-10 critical factors to consider when making a decision. It is essential to understand these well, though the marginal gain of studying the important things past a certain point are limited. People who agree on significant issues can waste hours arguing over minute details and fail to realize that it’s more important to do big things well than to do the small things perfectly. Don’t let the little things divide you when your agreement on the big issues should bind you. Don’t get stuck in disagreement – escalate or vote!

Distinguish between idle complaints and complaints meant to lead to improvement.

Communicate appropriately

It is the responsibility of each participants to assess the situation at hand and consider whether they should be playing the role of a teacher, a student or a peer. This awareness should inform whether they should be teaching, asking questions, or debating. It’s more important that the student understands the teacher than the teacher understand the student, though both are important. It should be clear whether someone is arguing or seeking to understand. Communication aimed at getting the best answer should involve the most relevant people. Communication aimed at educating or boosting cohesion should involve a broader set of people that would be needed if the aim were merely to get the best answer. Being able to connect the story across all levels of the organization is essential for people to understand the plan, give feedback on it, and eventually believe in it.

From Discussion to Action

Learn to slow down when faced with a difficult choice when a clear solution does not exist. That way you can absorb as much information and learn as much of both as possible to make the most informed decision available. There is almost always a better path that you haven’t considered yet. Engage knowledgable advisors whose opinions you respect, and continue to explore better solutions instead of settling for one of the choices that might be immediately apparent.

Once a decision has been made, the entire team should agree to get behind and support it even though individuals may still disagree. This is much more likely if people have bought into and agree with the decision making process. Specify the people who are responsible for each task to ensure alignment in the pursuit of the agreed upon goals. Remember that there are typically many paths to achieving your goals. You only need to find one. Best of luck!

Brendan Daly