Considered Decisioning

The year seems to be opening well for most of the companies and people. Opportunities seem to abound. The holiday break provided brain space that allowed people to generate great ideas outside of their approved plans and budgets. People are refreshed and energized and feel more is possible. It's great to see.

But not so fast……the maw of decision making has already started to take those ideas and crush them, or crush the organization around them.

Novel ideas seem to form a barbell around one of two extreme receptions:

• “Stick to your knitting”: This sounds like:? Why stretch ourselves to do anything different? We have a budget and a plan! It’s too risky, don’t we have enough on our plate! The list goes on. The opening attitude is “no”, and it is followed by an increasingly detailed and time consuming analysis of why “no” is the right answer, with no room to even consider a “yes”.

• “Damn the torpedoes”: This sounds like:? We have to be innovative and this is an innovative idea! We have to grow and this is a growth idea! We have to show ourselves and the world we can do different things and this is a different thing! Again, the list goes on. The opening attitude here is “yes” - normally from someone very senior in the company - and is followed by an increasingly directive and inflexible buffers to any consideration of the alternative.

Both of these are damaging to the organization probably in equal measure.?After all, the absolute essence of great leadership is resource allocation: when to say "no", and when to drive a "yes".

While lots of ideas should be closed down and closed down rapidly, no organization wants to be totally constrained by a strategy and budget established in some annual cycle, and have barren inter-strategy times with no consideration of the excitement of new and innovative ideas and opportunities that abound in the marketplace. No organization wants to be held captive by hard lines of budget or risk or technology or capacity without even an opportunity to be creative and brainstorm and plan the way to deliver the new within measured guidelines. And no organization wants to cede the unilateral power of saying “no” to a single person or function, without the possibility of exploring a (different or better) path to “yes”.?

Similarly, while lots of ideas need a champion to overcome group thinking, no organization wants to be totally open to any and every idea that comes their way, simply because it is new, or potentially drives growth, or is especially “shiny” in the marketplace, or loved by their CEO, or, even worse, a board member.. Organizational constraints are real, be they budgets, risks, technology, capacity. Organizations want to deliver the results they commit to and provide quality to their clients and colleagues. Organizations do need to focus, to prioritize, to do effective resource allocation, to say “no”. And again, no organization wants to cede the unilateral power of saying “yes” to a single person or function, without the possibility of finding a better path, or understanding.

I think a better path is Considered Decisioning.?

Rather than explain, let me describe some Master Classes in Considered Decisioning I was privileged to have in my career - tell a story of two.? As always, history is never accurate - so I beg forgiveness from those that were there with me. But the thread of the story, and, more importantly, theTake-aways are real.

In both cases the “Master” is Lou Gerstner. For people who may not know Lou, he stepped in to run IBM in 1993 and through his tenure until 2002, turned around and set the foundations to make the company what it is today. He is often remembered for this. But before IBM, he had worked his magic at American Express from 1978 to 1989, running Travel Related Services and then becoming president of the company. At American Express, I worked in Travel Related Services, not directly for him, but a level or two down.

Here are some stories (with apologies to and reverence for Lou).

The Platinum Card:?

The American Express Gold Card was really successful. Truly successful.?

Lou, possibly others, thought there was the potential for a card with even more service, more services, greater prestige, and a higher fee. This against the background of the rest of the card market eliminating their fees. He put together a team led by two senior executives - Scott Marks and John Sutphen - to explore the potential.

Once a year, there was an offsite strategy meeting with senior executives, often in exotic locations befitting a global travel company. It was not our best year so we had our meeting in Tarrytown, New York. John Sutphen and Scott Marks presented their plan and rationale for the Platinum Card, only to have their work raucously dismissed by a majority of executives present. Some of the debate: The data and analytics were wrong.? It would cannibalize the Gold Card. At $250 no one would buy it and we would become a laughing stock. Green and Gold Members would demand the exclusive services proposed for the Platinum Card only. We would stretch our marketing and customer service operations to the point of collapse……the list went on and on and on.

Ultimately, Lou stepped onto the stage and in true democratic fashion, called for a vote. Overwhelmingly - and there were almost 100 people there from the senior ranks of the business globally -? the group voted against the Platinum Card. And the vote was announced.

Lou then, in true leadership fashion, thanked John and Scott and their team for their hard work, thanked everyone for their input, told the group that he had more votes than all present, and announced that American Express would be launching the Platinum Card (slightly modified by some of the input given). Then told the group to “get on the train” and make it a success, or, if they couldn’t, simply “get off the train”.

The Platinum Card was launched in 1984 to great success: success that has continued ever since.?

This was not “Damn the Torpedoes”. A combination of leadership, thought, and analysis all made it Considered Decisioning.?

(And if you have an enquiring mind, I am fairly certain, to my lifelong embarrassment,? that I was one of the people that voted “no”.)

Revolving Credit:

In the mid 1980’s, American Airlines had introduced their mileage program, Visa was aggressively advertising against American Express, the ATT card and later the Discover Card introduced no fee cards, and American Express was losing (consumer) market share and share of wallet.

Among other things, I had responsibility for strategy and product development for Travel Related Services at American Express. My team (and I) had the temerity to suggest that American Express should move from a proudly charge card only business - where you had to pay off all your monthly charges within 30 days - and introduce a revolving credit card - where you could choose to pay all or some of your changes over time.

The logic was simple: people were increasingly and comfortably using revolving credit either regularly, or for short bridging periods, American Express Cardholders among them, and we were losing market share and our share of wallet of our customers. With our brand, service delivery and some relatively simple product development, we could win share of wallet among our existing customers and attract more to the franchise.

The reception: shock and horror. We were challenging the very core beliefs of the company, the very thing that made American Express different and better than any bank issuing credit cards. The more I talked about the idea, the more I was shunned by others in the company. An apostate, a traitor, an infidel!

Lou Gerstner, our president and my boss's boss, told me in no uncertain terms “I hate the idea a lot!”. Then he told me the three biggest reasons he hated it. Then - and this is where it got interesting - he told me to go and prove him wrong: find any arguments, facts, rationale to dissuade him from his position. And that's what the team did - came back with arguments and facts to dissuade him. And as we succeeded on one point, other points arose, sending us back to find more and different arguments and facts. He kept on doing this, telling us when and if our arguments had overcome his concerns, and when they had not or had raised new concerns, until, months later, he had arrived at a point where he supported the idea.

In 1986 the board approved the program and we got the funding to build the team to introduce the first revolving credit product for American Express. Execution of the plan is a story for a different day. But the card hit the market in 1987 with overwhelming demand from American Express Cardmembers.

Today, revolving credit is a major contributor to American Express volume and profitability. The journey was not without hiccups along the way. But without revolving credit, American Express would not be the company it is today.

This could have been “Stick to your Knitting”. Leadership made it Considered Decisioning.

?So, how would I describe Considered Decisioning :?

1. Decide what you want to achieve strategically
2. Decide what must be done to get to your strategic outcome.
3. Do the hard work: Do the research. Build the plan. Model the outcome and the risk. Listen carefully to understand both the promoters and the naysayers. But most importantly, firstly: brainstorm solutions to the constraints: risk, technology, resources, capital and for every constraint, find a potential path to overcome the resistance; and secondly: do it quickly understanding that there is no perfect projection of the future.
4. Apply leadership: Make a considered and transparent decision, knowing that leadership is not a team sport.
5. Get everyone on board. Make everyone “crew” and offload the “passengers”.
6. Remember that “execution is strategy”.

Try it.