Strategic Decision Making

I recently re-watched a past Coho session recording with Nick Coetzee discussing the strategic direction and decision-making for organizations. And I took A LOT of notes:

1. Strategy, Knowledge, and Communication: Nick emphasized the importance of a strong business and cultural strategy, robust knowledge infrastructure, and effective communication. This helps organizations align their operations and maintain the right course for growth.

"The more time that elapses, the more you scale headcount, the more a slight change in direction renders you an order of magnitude away from your ideal destination."

2. Consequential vs Inconsequential Decisions: Borrowing from Jeff Bezos' decision-making matrix, Nick explained the difference between big and small decisions and reversible vs irreversible decisions. They emphasized the need to think deliberately about decisions that fall into the consequential and irreversible quadrant. We use this approach as a team at Coho too.

3. Knowledge Infrastructure: To make informed decisions, it's essential to maintain a hub of information across four categories: people, operations, customers, and business intelligence & finance. This will allow you to "paint an accurate picture of what is happening at the company" and make high-quality decisions.

4. The Anatomy of a Great Recommendation: A well-structured recommendation should accompany a strategic decision. Nick provided five components for an ideal recommendation: accurately characterize the problem, use qualitative and quantitative data, present scenarios, upsides, risks, and ramifications of inaction, ensure the recommendation is well stress-tested, and balance the usage of speed, gut, and conviction with deciding carefully and rationally.

5. The Power of Questions: Nick emphasized that asking the right questions helps align the team, focus on the problem, and make better-informed decisions.

"95% of the solution accurately characterises the problem and key questions."

?? Here's a straightforward exercise you can apply today using the five components of a great recommendation:

Pick a challenge:

Draft a proposal to address the challenge or decision using the five components of a great recommendation.

a. Define the problem: Clearly describe the issue and formulate the key questions.

b. Collect and analyze data: Gather relevant qualitative and quantitative data, and consult with other leaders for insights. Could you evaluate this information to identify trends, patterns, or gaps?

c. Assess scenarios and consequences: Outline potential outcomes, upsides, and risks for each option. Consider the implications of not taking action and how the situation may evolve.

d. Test and refine the proposal: Solicit feedback from stakeholders to identify potential objections or improvements. Incorporate their input to ensure the proposal is robust and well-supported.

e. Make a balanced decision: Weigh the importance of speed, intuition, and conviction against the need for careful and rational decision-making. Aim for a timely, informed, and confident choice.

Share your proposal with your team or leadership to gather feedback and refine your recommendation.

Reflection:

• How did the exercise help you think strategically about your organization's challenges or decisions?
• What did you learn about your knowledge infrastructure? Are there gaps or areas for improvement?
• Were there any unexpected insights or areas of alignment/disagreement during the feedback process?

Curious, what helps you make informed decisions when you need to move fast?