Making a Bet on Business Decisions
It is human nature to seek out certainty. To look for stability. The knowable. Black and white. Not 50 shades of grey!
But decision-making is really about making a bet. If you think maybe I am being a wee dramatic, check out Annie Duke’s book, Thinking in Bets. Life is a game of poker.
Business success = the quality of our decisions + luck.
Quality comes from having a process or framework (or a few that you run through) for decision-making. I am all about intuition having its place in the process, or in the final decision, but quality and long-term success is about having a process.
Your Bucket List
Let’s get clear on one thing. Quality is not a question of being right and wrong. It is about the process. Sometimes crappy decisions, have great outcomes and sometimes solid decisions, have shitty outcomes.
Keeping this in mind should also alleviate some of the fear that creeps in when making big decisions. When scaling your business, the stakes get higher, and the dollar amounts you are talking about or the team you are responsible for grows, so does the fear.
Start with your bucket list (no not that one!): (1) what do I know, (2) what don’t I know (throw in that bucket what you THINK you know), (3) what can’t I know?
Crowdsource Bucket #2
What you know is based on your own experiences, the information that you have, and the models that you have used in the past to play out the options.
Aka, bucket #2 is wide and deep. Now what?
Go seek out the perspectives, expertise, and opinions of others with diverse backgrounds. Ask questions.
Really listen, really push yourself to find the contrary points of view. The evidence that might contradict or challenge your assumptions. By nature, we seek out the evidence that validates our decisions (hello, confirmation bias). We want to feel good, who doesn’t like to be right?
What sources of information might you have overlooked or dismissed? Why might someone else have a different view; what’s their reasoning or evidence? If you start from a place of thinking, they are right, it will help fight someone of that confirmation bias.
But don’t accept everything as gospel. Particularly as founders, you need to surround yourself with mentors, advisors, other founders who have been there, done that, industry experts, etc. to find success. But that doesn’t mean they are all right (and you will often hear many contradictory views). Remember, you are disrupting an industry, or you are doing something that hasn’t done before, or introducing a product or service the market has never seen.
Do you have killer confidence, or confidence that kills?
As a leader, I do think projecting confidence is important for your team. Not misplaced confidence or false confidence, but true confidence. What do I mean? Give me one second.
As founders and CEOs, we are often discouraged from saying ‘I don’t know’. It’s a sign of weakness. But the truth is vulnerability is an asset. Vulnerability invites collaboration.
COVID taught leaders that the hard way. Nobody could say with real confidence that they knew the answers, but they could confidently believe that the team had the necessary talent and commitment, the vision was still right, and they would figure it out as a team.
I believe leaders should be confident in their decisions once they have a run a solid process. This is not to say that they are confident they are right 100% of the time; rather they are confident they made the best decision with the available information.
Decisions are bets. With every decision there are risks and uncertainties. There is the black swan event. There is the unknowable. The ‘what I can’t know’ bucket. This is where a little intuition comes into play.