My business partner, Foram, and I started ALV with a modest investment of $8k each. Six years, a pandemic and many pivots later, we are still going strong, and bootstrapping our way to success.
As I’ve reflected on what’s gotten us here and what will enable us to get to the next level, I keep coming back to one thing: decision making.
As a non-technical founder, I don’t actually do anything. I don’t write code. I don’t coach our clients. I don’t prepare our tax returns.
Let’s be clear—I do a ton of stuff because we are small and scrappy, but I’m not an expert in any of it, and it’s not a long-term plan.
I’m convinced that my job description could be boiled down to one sentence: make the right decisions at the right time. And the effectiveness with which I can execute this job description dictates how successful we become.
So how do you as a leader make good decisions quickly?
Well, countless studies show that human beings are inherently pretty bad at making decisions. We are extremely biased and can be swayed by something as small as our level of hunger at any given moment.
“The unavoidable conclusion is that professionals often make decisions that deviate significantly from those of their peers, from their own prior decisions, and from rules that they themselves claim to follow.”Kahneman, Rosenfield, Gandhi, Blaser
So the knee-jerk reaction tends to be, let’s eliminate the human elements and rely more heavily on data. This sounds great conceptually, and I am all for continually pushing for better data sets from which to inform decisions.
But there are downfalls here too when over-indexing on data.
- It takes a lot of time and energy and may be more expensive than is feasible.
- Data is constantly changing, and you get stuck in analysis paralysis. Don’t forget that timing is key.
- Having consulted for some of the largest companies in the world, even with seemingly unlimited resources, you never have the exact data you need.
- Data can be interpreted in many different ways, and so there is often still a human element of numbers driven analysis.
“We like to think we make complicated decisions based on rational analysis, but most of the time, we actually make an emotional decision and then invent a rational analysis to justify it.”Seth Godin
Relying on data exclusively is unrealistic. I feel that as leaders we need to learn to balance data and intuition to make sound decisions rapidly.
Back in my consulting days, a partner once drew this diagram and said to me, “When you’re just starting out as an Associate, you need this many data points to draw a conclusion and make a decision.
Later in your career, by the time you’re a Partner, you need this many.”
I think about this often and have found it to be so very true as I’ve matured in my business career. I typically get a spidey sense that something is off or needs some attention. I don’t always act on it right away, but I’ll start forming a hypothesis and figure out what I need to do to test it.
Now “spidey sense” sounds incredibly fluffy, but I don’t actually mean just an unjustified feeling. This might look like:
- Preliminary data, like a few days or weeks worth, instead of months.
- A few data points coupled with repeated, strong anecdotal evidence.
- Really compelling qualitative data when you aren’t able to measure it just yet (e.g., when people write a ton in your inquiry forms they tend to be better leads than when they just put a few words).
Gather enough data to be able to draw conclusions and challenge biases (and of course be careful of confirmation bias). And also trust your gut because you’ll inevitably never have the data you need, and a lack of data does not equate to a lack of reason.
“Never make a decision with less than 40% of the information available and never gather more than 70% of the information available.”Colin Powell
If you’re not sure where to begin when facing a decision or choosing what (or what not) to pursue, ask these four questions:
- How am I evaluating success? What data points do I need to see to be able to determine if this thing is working or not? Note: if you can’t articulate what additional data you need to make any given decision, you might be disguising your procrastination as analysis.
- What are my biases? Check yourself on what could be shaping your hypotheses to try and give each idea/option a fair shot.
- Who else needs to reach this decision alongside me? You are likely not alone in this. How are you involving and inspiring your team in the process?
- What do I know to be true? What unique insight do you have as a leader that makes your gut worth listening to? Maybe this is a past experience or being informed of another similar but different data set or initiative that others aren’t privy to.
Then, make the decision as soon as you (intelligently) can. When you do it, keep in mind:
- You will be wrong much of the time. The sooner you decide, the sooner you can pivot.
- Factor in relative importance, not just direction. You might be swirling on a decision that doesn’t actually matter all that much either way; you’re just concerned about getting it right. Free your brain space to think about more strategic and important matters.
- Conduct a premortem. What’s the best and worst-case scenario for each option? You’ll likely find the worst case isn’t all that bad and probably better than doing nothing.
- It takes courage to place a bet and stand behind it. Being a leader is scary, but it’s your unique skill set that has equipped you to be the right one to make this call.
- Data that comes thereafter is simply that… data. It is not a reflection of your value as a person or leader even if you turn out to be wrong. It is guiding you to your next move.
Even if you make the most amazing bets and decisions in the world, as a leader a huge part of your job is bringing your team along with you. This is especially critical when you are making decisions that personally impact your team or will lead to unfavorable news. For your initiatives to be successful, it all comes down to inspiration and implementation.
The data needs to be good enough to be believable… the message is what gets people to care.
When communicating your decision, you’ll need to appeal to your team’s analytical and emotional sides. As you consider your messaging, try and answer these questions:
- Why should I trust you? Do you have my best interest at heart? – emotion
- What was the rationale/thought process that led to this? – data
- What’s in it for me? – data
- Do I care enough about you/this to do something worse for me today but better for the org or team at large or in the future? – emotion
Decision-making is hard, can be exhausting over time (like when I get home from work and beg my husband to pleaaasssee just pick what we’re having for dinner so I don’t have to make another decision today), and exposes you to lots of opinions. But it’s exactly the kind of swift action and bravery that will make you successful as a leader and will help your organization thrive.
Hope to be right, prepare to be wrong, but either way, today is almost always better than tomorrow.