Thinking About Decisions.

By Andrew Cross, Ph.D , with significant contributions from Steve Bowie .

We all make hundreds of decisions every day. Most are tiny, flying past without us even noticing. Others hit us hard, and we may agonize over them for months (often even after we’ve committed to a course). Yet even though the sum of those decisions is our life, few of us consider how we make them.

The typical corporate leader wakes up, has a coffee, and starts considering what to do that day. Basically, the leader’s job is to determine how the company should spend its time. Let’s imagine a circle representing the total time available for your company to work on the things that you decide matter.

If you are a development company, you’ll need a product.?So, it’s likely a pretty good idea to start writing some code. Of course, this eats a little bit of your circle (but that’s ok – it’s a big circle!)

Our customers will need to know how to use the product, so you assign someone to spend a little time writing instructions. Naturally, documentation needs to expand as features are added or updated, and this eats away a little bit more time – but there’s still plenty, right?

To pick up the pace, you hire more coders. To keep the team is aligned and productive, you set up and maintain a schedule and progress reports, and eventually hire a product manager to coordinate these.

The team no longer fits around your coffee machine, so you need dev team meetings. And, of course, the documentation team needs to know what the coders are doing – add another meeting.

As time goes by, the list of things that need to be done grows and grows.

Copyrights must be written and filed; sales needs training; you need marketing strategy and assets; and, “Oh, do you have a minute?” HR wants to discuss benefit plans, documentation needs translating, compliance is asking about encryption, IT has security concerns, the washroom sink is plugged, and the ‘to do’ list is ten pages long.

At some point, inevitability strikes.?Your new support team needs training, but no one has any free time. Plus, the web site badly needs updating, and your biggest customers are starting to complain about waiting too long for bugfixes.

Eventually, every team in the world winds up with more to do than time allows, and the circle ruptures.

The most common ‘solution’ is to expand the circle by adding more warm bodies.?Really, though, this just kicks the can down the road a bit.?Add a few more tasks, and you are right back at the same point.

In this situation, some managers just complain: “We don’t have time to train the support team!” Being candid, this drives me a little crazy.?We addressed needs in the order they arose.?Logically, being more recent does not make “Train support team” less important than “Have team meetings.”

Good managers try hard to get all high priority tasks done in the time available. This could involve cutting team meetings back, optimizing training, prioritizing bugs, etc. Rather than taking on ever more tasks until they keel over, they prioritize, optimize, and wherever possible, reduce the list of things that really need to be done.?Is there anything else that can help?

One great idea is enough.

We send managers to workshops and training programs, and they read countless articles and subscribe to podcasts – all to help them make good decisions about what to do.?However, no matter how brilliant you and your team are, you simply cannot do everything.?The truly great manager decides what not to do, surgically discarding everything that distracts from the really important tasks. This (seemingly high-handed) rejection of the non-essential is the magic that lets small companies topple giants; the competition between companies is won by the ones that best determine what not to do, rather than the ones that try to do everything.

Can we really flip the problem on its head simply by deciding what not to do??Aren’t many decisions really complicated?

A classic business study proposes two incompatible tasks, each with a measure of uncertainty.?Choosing between them is very difficult.?Numerous books and columns by experts offer magical solutions, which can usually be distilled down to different approaches of determining which offers the best return.?

The real world, however, is messy.?A spreadsheet may project soaring sales, but it is really hard to quantify probabilities. Should you do something that ten current customers are clamoring for, or tackle a riskier project which could gain a million new ones? If this uncertainty isn’t enough, you must often weigh short-term opportunity against long-term strategy. And your competitors won’t patiently stand still while you dawdle over a decision.

More information is not the answer.

While many think the answer is to ‘worship the data monster,’ assigning accurate values to countless factors often owes as much to guesswork as science and is often polluted by our own biases.?Nevertheless, this problem suggests its own answer: The information really needed allows huge tolerance for uncertainty.?Even wild assumptions may suffice!

The data required to make good decisions seldom needs to be either exhaustive or even rigorously accurate – it only needs to be barely accurate enough.

For instance: While firm projections might be unavailable, a ‘rough but realistic’ guess indicates that returns from proposed Project A would fall between $1 and $10; whereas expectations for Project B range from $50 to $150 (for simplicity, we’re using dollars here – but feel free to substitute any other values to suit your need).

Armed with even just these vague estimates, you already know enough to decide.?Project B offers much better results – why are we still talking about this?

So far, this approach applies to almost any decision: One course is obviously good, while the other is clearly terrible.?Many decisions are that easy to make without any deep study.

Though seemingly obvious, this simple test unchains you from an insatiable data-eating monster.??

Of course, it can often be more complicated.?Projections for Project A might run between $40 and $80, while Project B ranges from $50 to $150.?Project B arguably still looks better – but you can’t be sure.?In the real world unfortunately, most decisions fall into this “It’s complicated” zone.

The knee-jerk reaction when facing uncertainty is to demand more data.

If you give in, the data monster will gorge itself as your company turns itself inside out forming committees, interviewing customers, and poring over market reports.?You might further demand better time and resource estimates and hold still more meetings (accompanied by enough mind-numbing PowerPoint presentations to cause a paralyzing pandemic).

It's so tempting to succumb to the data monster’s siren song, imagining that more and better data (at any cost) will free us from the burden of making a tough call.?The truth, however, is that you already have the data you need!

Sure, Project A or Project B may have a slight edge – but you can’t really tell which with any certainty, and much more data won’t drastically change that fact.?What this means is that neither path is clearly far better. Here’s the thing:

It is much better to treat all complicated decisions as if both options are terrible ideas.

Spend your time doing what matters.

This assertion – that you should just discard any complicated problem – is not for the faint of heart (if you’re on a defibrillator, stop reading here). It’s true only for that exclusive minority of leaders prepared to accept that they can’t do everything and who also intend to do things that really matter.

By definition, decisions too close to call can never make a difference that matters very much. And this makes them totally unworthy of exorbitant expenditures of your most precious commodity – time.

Why agonize over something that does not make a real difference?

In any given period, the most talented, brilliant, and well-funded workaholics still have limits.?Far more ideas are bandied about in any company than could ever be implemented. Some are obviously terrible; many more are somewhat complicated.?Is it not clear that – to do great things, you must first discard anything that is not clearly “A Great Idea”?

Innovation and its companion success belong to leaders who best choose what not to do.?This frees them to pursue things that really make a difference. And this is how to build companies and teams that leave a mark.?All you need to learn is when to say “No.”