Improving Business Decisions

As you advance in your career, you’re going to be asked to make critical decisions. You have to involve the right people, explore the range of uncertainties and continuously improve by doing lookbacks. 

Exploring the range of uncertainties: 

Be sure that you have the right people weighing in on the decision and that you’ve asked them the right questions. Ultimately, there are uncertainties in decision making. And sometimes you can take all the right steps to make a good decision and have a bad outcome. You want to be sure you’ve explored the range of uncertainties in advance so you aren’t surprised by an outcome. 

Doing lookbacks: 

Performing lookbacks is a great way to improve your decision making. Your aim should be to learn from good and bad outcomes. We do formal lookbacks at Chevron on all major business decisions, and we try to be introspective. 

We ask, “In reaching that decision, should I have done something differently?” It’s not so much second-guessing as it is trying to learn and really explore your thought process. Did you consider all the things that you probably should have in making that decision? Should you have sought out more information? Should you have involved someone else in the decision? And once you’ve learned, then you can ask, “How can I replicate success elsewhere in the company or prevent the same mistake from happening again?” 

Sometimes you reach the conclusion that you shouldn’t have done anything differently. You can make good decisions that have bad outcomes from within the range of uncertainties you considered. 

Learning from decisions:  

What comes to mind is my decision to allow Chevron to take on a lot of activity during the oil price run-up earlier in the decade. In hindsight, we probably took on more projects than we should have and misjudged the ability of the company, its contractors and vendors to execute well in a time of supply chain pressure.  

On the one hand, I feel like we had asked a lot of questions and had assured ourselves that we could execute all these projects and do all this work. On the other hand, I know people want to please and feel they can take on challenges that may be too much. It probably was knowable that it was going to be difficult to execute some of these projects perfectly during this period. We probably didn’t appreciate that or ask the right questions to bring that to the surface. 

You try to learn from instances like this and incorporate some of what you could’ve done better into the next set of projects and commercial activity. And we’ve done so, making many changes to our front-end project planning and engineering practices. 

Speaking up: 

Although it’s critical for people to speak their mind, it’s not always easy for employees to take a risk and share their views. I had an experience very early in my career when I did not fully express my opinion to an officer of the company. I thought my career was over at that point. But this individual could sense I was holding back and encouraged me to speak up, treating it as a teachable moment. That had a profound impact on me.

Over time, you learn that the most productive way to get your view heard is by being respectful of individuals. And when you have a strong opinion about something, take the time to make sure that view is heard. Maybe that means talking to someone in private or exposing your thinking fully in a meeting. However you approach it, pick the avenue that’s going to work for you, and make sure your view gets expressed. 

Most important decisions: 

We make significant calls as a company on commercial and other arrangements, but I think the most important decisions that I make are about people. Ultimately, getting the people decisions right results in the best outcome for the company.

Good people decisions: 

Good people decisions are like any other decision. You have to gather enough information on the individuals who are candidates for positions. One of the things we have going for us as a company is that employees tend to stay with us for a large part of their careers. And so we build up a lot of experience with them. 

Also, we move people around, giving them a number of different assignments. As a result, when we consider individuals for positions, we have sufficient information to understand their capabilities and experiences. We then analyze that information by considering the range of views around someone’s performance history, capabilities and potential. 

In the end: 

In the end, you have to be accountable. Make sure you can explain the basis for your decisions – you involved the right people, fully explored the range of options and performed a thorough analysis of the possible outcomes. And once you make a decision, own it.