Do you know how to make business decisions?
Entire industries have been created around helping businesses find the best way to make decisions, and oftentimes this leads to massive bottlenecks and bureaucratic overhead. There are certainly decisions that must be made with due care and consideration, but probably not as many as you think.
Figure: Jeff Bezos talks about when to move fast, and when to slow down (9 min)Define the consequences
The weight and care put into a decision should be proportional to its consequences. This may sound like Risk Management 101, but one of the most common pitfalls in business is weighing down every decision with a process - no matter how small.
Want to order different coffee for the office? It takes 6 weeks and 4 meetings to get approved. Want a new banner on your company website? 12 weeks and 3 different levels of authorization needed.
These are huge bottlenecks for decisions that can, if needed, be quickly and cheaply reversed.
What about a company rebrand? Or expanding into another country? Well, they're not so quick (or cheap!) to revert if it turns out to be the wrong choice.
A common mistake businesses make is to treat every decision like life-or-death, and end up introducing massive inefficiencies for fear of making the wrong choice - even for coffee!
Your first step should always be to define the consequences of making the decision. Think about:
- How much time or money will this decision cost?
- How easy is it to pivot from, or revert, this decision?
- What is the blast radius of this decision?
Type 1 decisions 🟥 - Think carefully, then act
These decision types are where consequences are significant and/or difficult, expensive, or impossible to revert. They need boss/stakeholder/SME (subject matter expert) involved. Every team should try and reduce these ones.
In software development, some classic Type 1 decisions 🟥 may include:
- Buy vs build strategies
- Proprietary/closed-source vs standard/open source solutions
- All things cybersecurity
Jeff Bezos described himself as "Chief Slowdown Officer", where he defined his role as identifying Type 1 decisions 🟥, and ensuring his team deliberate, consult, and analyze the options extremely carefully before committing one way or another.
Type 2 decisions 🟩 - Move fast and break stuff
Type 2 decisions 🟩 are easily-reversible decisions. Generally speaking, these should not require a great deal of consultation or deliberation - empower your leaders in that area to make judgement calls on these, and remove the red tape. As a result, your teams will reach outcomes faster, and be encouraged to show more interest and initiative in their problem space.
If the decision turns out to be less than ideal, the business has a quick exit strategy and at the very least - you'll have gained valuable insight into why that particular choice wasn't the best fit.
"I will not say I failed 1,000 times. I will say that I found 1,000 ways that won't work"
-Thomas Edison, on making the light bulb.
What if you are making a change that doesn't require a decision?
Routine changes don’t require a decision, so you just need to action it. If you think it's necessary, you can get a “checked by” confirmation. This shows the change has been reviewed.
Converting Type 1 decisions 🟥 to Type 2 decisions 🟩
One of the great things about software is being able to deliver patches and updates to users far more quickly and efficiently than any other industry.
This provides software developers a unique advantage - the power to convert many Type 1 decisions 🟥 to Type 2 decisions 🟩. Using tools like feature toggles, A/B testing, version controls, and redundancy, developers can take a traditional Type 1 decision 🟥, and convert it to Type 2 🟩.
Investing time into these tools and strategies can take a lot of pressure off big choices - allowing a "try before you buy" approach to choices that were traditionally an all-in decision.
Save big conversations for big decisions
There is time and place for agonizing over choices - the art is recognizing when it's okay to fail. That's not to say that you will fail, but rather acknowledging that the cost incurred by overanalyzing what brand of coffee is best, is greater than the cost of picking the wrong (and then subsequently the right) coffee to begin with.
