We’ve all made good and bad decisions.
The tricky thing is that we can only tell if a decision was effective in hindsight, after the fact. And more often than not, it’s also unclear whether our decision was truly the best one.
Take hiring for example: We review hundreds of candidates and come down to a handful of top choices. We can’t hire all good candidates and test their abilities during a 6 months probation period (maybe some companies can, but with limited resources for salary and training, our startup certainly can’t), so what do we do? We decide on the candidate that we think will be the best fit and make an offer. However, even if our chosen candidate ends up bringing positive value to the team, can we confidently say that other candidate couldn’t have done better? We will never know whether unexplored options might have been better.
So we can’t predict the future. Then how can we confidently tell if a decision is right or wrong beforehand? How do we plan for the future?
In my opinion, it comes down to leveraging our team’s existing knowledge and experience, as well as analyzing all possible scenarios that could result from our choice.
Here’s a series of questions that have helped me evaluate decisions:
Why are we considering this decision? If we don’t have clarity on the ultimate goal, then let’s not waste any time on a decision. So what’s the problem or pain that this decision is trying to deal with? What’s the goal that we’re trying to achieve?
How does the decision advance our team goal? All decisions must help the team hit its goals, and in turn, help the company achieve its vision. Decisions and activities that don’t help us advance our cause distract us, and waste precious resources. So let’s avoid them. For example, if our team goal is to sign on a large number of small and medium clients, deciding on how to better attract attention from large companies is a distraction.
What has already happened in relation to the decision? Let’s document all steps that we’ve taken to date, so that if other stakeholders need to be looped in, they can easily be briefed on the current status. For example, if we’re deciding on a new office location, what have we done already as part of the process? Have we visited potential offices, talked to agents, or analyzed our needs?
What did we do yesterday to cope with this problem? Is this a new problem, or are we trying to improve the way we deal with an ongoing problem? Documenting and communicating a problem’s history ensures that parties that are not familiar with the subject understand the full context when evaluating the decision.
How important is it to take this decision relative to other decisions in the pipeline? We’re likely to pursue many different decisions at one time, so we have to prioritize the ones that may have the strongest impact on our team goals.
When do we need to decide by? Waiting too long on a decision and it may become irrelevant. Not spending enough time evaluating our options and we may miss valuable insights. So let’s set a decision date based on how much research and analysis we can realistically do and afford to do.
What’s different this time? If we’re taking a decision regarding a situation that we’ve dealt with before, do we know the similarities and differences between the situations? What have we learned from the past event? Should we react similarly to last time, or take a different approach?
What insights exist to help us evaluate the different choices?
Data: Do we have relevant analyses and reports that can help us evaluate our options?
People: Who has experience or insight on the situation?
Historical cases: Have there been similar cases like this one before, either at our organization or at other organizations, that we can review and learn from?
Who needs to be involved in the decision? My recommendation is to loop in a representative from each team that may be impacted by the decision, subject matter experts that have insights to offer, along with someone that has no real stake in the decision. This last individual will be able to offer an unemotional and objective view of the situation.
What are our potential options? What are all potential options that we have regarding the decision? Which ones are realistic? Let’s remember that doing nothing is a choice too.
What are all potential outcomes? Have we evaluated all potential outcomes of our options? We can certainly leverage scenario planning here. The exercise will help us identify, plan around, and react to all possible outcomes.
Are we ready to face the impact of all potential outcomes? Which scenarios identified above are we ready to face, and which ones are we not ready to face? Are we OK with not being able to react to certain scenarios, or do we need more time to achieve operational readiness?
What’s the right thing to do? Is there a potential for people to get hurt, either today or tomorrow, by our choice? Will we be able to sleep easy with our decision? If there’s a risk of hurting people, can we tweak the solution to avoid it, or mitigate the risk? For example, if we find that producing oil from tar sands is still the most economically viable option, can we minimize damages to the environment?
Does everyone agree on the decision? Is there a clear option that most people involved in the decision agree upon? If there is no consensus, the main stakeholder, usually the person with the most stake in the decision that has to manage and implement the decision, needs to take the lead and make a choice. This will help to avoid decision paralysis, which hurts team cohesion and diminishes trust in the leadership. (In High Output Management, Andy Grove, former CEO of Intel, offers a very clear approach on decision making in a team environment to help get consensus)
How will we communicate the decision? I’ve often found that how I communicate a decision is just as important to success as making the right decision. In one situation, I let go of a team member that was clearly unproductive and a drag on the team. Yet by not communicating why we let go of that team member, who was a friend to many people around the office, it created confusion and fear among team members that were not familiar with the individual’s performance. So with every decision, let’s work to communicate why we’re taking the decision and how we went about evaluating our options. The key is to shed any doubt as to whether we reviewed the necessary data, consulted the relevant parties, and compared all possible scenarios.
The decision taking process explored above is like a production process. A car is worth much more than the value of the raw materials it’s made of. Similarly, with each additional question answered, a decision gains more value and importance.
So let’s be careful about not advancing unimportant decisions further along the evaluation process to avoid wasting resources, but also diligently vet important decisions.
I also recommend checking out the couple resources below on decision making:
- Hubspot CEO shares his decision making insights: https://hbr.org/2016/03/how-decision-making-evolves-as-a-startup-grows
- Reviewing decisions from a macro perspective: https://hbr.org/2015/05/an-organization-wide-approach-to-good-decision-making
Happy decision making!
The next time that we are faced with a decision, let’s start by asking ourselves: “Is this decision relevant to our mission?”
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