Advice #5 - Be right but only by at least 51% of the time

This piece of advice might not be entirely what it seems up front.? Yes, the headline point of this is that it is entirely acceptable - necessary many would argue - to be wrong as long as you’re getting more decisions right than you are wrong.? However, the main point of this piece of advice is actually around prioritisation of time and avoiding indecision.?

I’ve seen all too often that people don’t progress fast, or at all, because they lack the ability to take calculated risks and move quickly knowing that actually there is likely always a positive outcome even if you do fail.? This is a little bit of a more wordy statement than ‘fail fast and learn from those mistakes’ but that statement glosses over a few key principles in my opinion:

1. Failure is actually a good thing - I have learned more and learned faster from my mistakes than I have by making the correct decisions.? Correct decisions don’t tend to blow up in your face and drive significant change.
2. Failing fast is not the most important aspect - If you do fail fast but don’t really learn from your mistakes then it could be very easy to get into a situation where you fail more than 51% of the time.? Doing that means you’ll either not progress or more likely, go backwards and get to the point of irrevocable failure (dissolution of your business).
3. To fail fast and not only ever fail fast, you need to optimise your time - The target for failure should actually only be about 20%, not 49%.? I say this because failing fast requires you to initially make a decision about change quickly.? Make it too quick and you run the risk of dropping below the 51% minimum required level to progress.? Make it too slow and you risk missing out on opportunities and causing stagnation of your progression another way.? If you can get to the point where you’re around 80% sure you’re making the right decision you’re probably going to have arrived there in a fraction of the time it would take to getting to 95% or 99%.? This is a similar concept to the Pareto Principle in that 20% of the total time spent making a decision is likely to get you to 80% of the required confidence level… this is at least true of what I have found over the last decade.

Consistent to my form of other advice points, I thought it might be useful to identify a few really critical decision types that have been made over the last decade (and continue to be made regularly) to help illustrate the points above:

A - When and who to hire

Initially there was no great logic to this beyond the desire for Tom and I to not be working 100 hour weeks.? However, we took ages to actually make this decision - about 2 years in total from the point we first started talking about hiring people.? This is a perfect example of taking far too long to make the right decision.? We just kept coming up with reasons as to why it was too risky.? Looking back now that we have a staff of around 40 people, it actually seems like complete madness that we didn’t start earlier.

Roll on to today and the situation is wholly different.? The decision to hire someone (as in deciding whether we will hire or not) is very quick.? We look at the current workload, look at the predicted increases and type of work and if there is a clear deficit likely to occur then we open up a role based on what role type, contract type and location makes most sense by considering demand across the entire business globally as well.? If we get this forecast wrong then the most likely impact is that we end up putting a candidate ‘on ice’ for a while and then picking up with them again if they’re still in the market.??

A couple of clarifications here.? We’ve only ever needed to do that a couple of times and we’ve been very transparent with the candidate about why we’re doing that.? Of the couple of times it’s happened, we have had one person become unavailable and another accept a job several months after starting an interview process with us.? The net negative outcome therefore of making these hiring decisions quickly, but very occasionally imperfectly, is that in the last few years we’ve only lost out on 1 possible candidate…

B - Which clients to take on and let go

For me this used to feel like a really easy decision or a really hard one… nothing in the middle.? We decided early on that we would not entertain any client that made us or our team uncomfortable with what they were delivering.? As a result we do not touch brands operating in the following areas:

• Gambling
• Pornography
• Smoking/tobacco
• Religion
• Politics
• Anything linked to slavery

Particularly with the first one in this list we are leaving a lot of money on the table. But then how could anyone feel proud about increasing the Revenue per Visitor (a common KPI we work towards) of some of the poorest and most vulnerable people in society!? These are the easy decisions for us to make.

The much harder ones are related to which clients we should drop after working with them.? The reasons for stopping working with a client are relatively easy to define:

• Any aggressive/derogatory behaviour towards our staff
• Regularly causing issues when paying invoices
• Regularly trying to bend our already very flexible contact rules
• Completely unrealistic expectations

However, actually being able to conclusively say that one or multiple of these issues prevail across all contacts within the client is unlikely.? As such, when pockets of this does exist, it’s potentially a dilemma as to what your tipping point should be.? For example, maybe the client is excellent to work with, highly responsive, respectful and has realistic expectations.? That same client has an accounts payable team that for some reason seem to take pride in how late they can pay an invoice.? This only really affects the shareholders of the business and not the employees right?? Well, yes and no.? If you have multiple clients that fall into this category then it will affect employees by affecting the cashflow of a business and thus the speed at which that business can hire new employees.? Delaying the decision to hire employees can have an impact on the workload and stress levels of those employees.

So what is the right decision to make… well, that’s where you need to avoid the over-think.? Ultimately the most important asset within a professional services business is the employees.? My guiding light therefore is to seek their guidance/advice and monitor their happiness and satisfaction working with the clients.? If it’s clear the employees are unhappy then it’s actually an easy decision to make. If they are happy and motivated then I need to try and work around the other issues.

C - How to scope a project with multiple variables

If anyone has been involved in creating statements of work they will know exactly what I’m talking about here.? You might need to provide an estimate on the total number of billable hours that would get used over the course of a 12 month period on a project that is complex, has lots of variables and unknowns, and it’s for a client you don’t know that well and as such don’t know their working cadence or style fully yet.

I’ve made enough mistakes with this whereby I’ve under-estimated the hours and had to take a big write down on billing/profit that the only way to operate now is to provide a best guess then refine over time and provide complete transparency to the client about this best guess - the logic behind the best guess.? This is handled as follows:

• For short-term projects that are fairly well defined = provide a project SOW with an estimated number of hours that would get used.? If we’ve over-estimated then we won’t bill it all or we’ll redeploy any unused budget to future/other projects.
• For longer-term support contracts where the requirements will continually change = provide a retainer SOW with an estimated number of hours we’ll use on average per month.? These contracts will have a rolling flexibility clause (normally 90 days) to allow the hours to move up or down as we get into a rhythm with the client.

In both cases we’ll never be in a situation of either massively over or under billing.? There is also complete transparency with the client all the way through.? Of course, even with the above we have still made mistakes such as when projects suddenly spike in demand but for 95% of cases we’re bang on regarding our handling of SOW hours now.

The irony of the above solutions incidentally is that procurement systems and budget approval processes don't really work this way. They're normally designed to work on a fixed cost basis over a fixed period of time. This is where the relationship and transparency between us and our client contacts becomes so so important to ensure that we figure out creative ways around this challenge.

So, do I only get things wrong 20% of the time or less now?? It’s actually impossible to really know for sure as what might seem like a correct decision may also not be the best decision but it will be the best decision you know and can logically measure against.? What I can say for sure though is that 10 years on there are many fewer decisions that blow up in my face and require me to go into recovery mode.

Recovery mode can be very daunting when you initially encounter it.? It can seem like a major hurdle to overcome, you might think that you’ve irreparably damaged your business or reputation.? However, if you handle this recovery with transparency and integrity there’s every chance you will actually earn a greater deal of respect from the people around you by how you have dealt with it and what you have changed based on your learnings.? I can assure you that this feeling of pride you’ll achieve will far outweigh any regrets you might have had over making the poor decision… Never hesitate for long. Evaluate quickly, make the decision and then learn from the outcome.