Decision Making Philosophy
A company’s value is no more than the sum of the decisions it makes and executes — and the quality of decision making is as important as executing on those decisions. A company’s assets, capabilities, and structure are useless unless team members throughout the organization make the essential decisions, act on decisions faster than competitors, and get those decisions right more often than not.
The primary goal of decision making is getting to the best decision for the company, quickly. Second, it is to have as many individuals as possible feeling good about the decision.
Broswe the full playbook:
Decision Making In Practice
How do you empower your team to:
- Make quality decisions?
- Act on decisions quickly?
- Determine when they need to bring decisions to the next level?
- Drive consensus around decisions?
That is done by educating your team on how to make the best decisions using a mixture of reasoning, metrics, and team resources/feedback, as well as by clarifying who can make what decisions and when those decisions need to be passed on to the next level up.
Following is a framework for how to think about decision making and how to expect your team to approach driving toward outcomes and consensus.
Making Quality Decisions
When it comes to decision making, having a founder mentality means that you empower anyone at any level to be a decision maker. In order to ensure we’re doing that well, we need to educate our team to make sound decisions using logic and data-based decisions.
Two Types of Decisions: One-Way Doors and Two-Way Doors
First, it is important to identify the two types of decisions: One-Way Doors and Two-Way Doors.
- Two-Way Doors are decisions where, if you decide to do something and end up not liking the outcome, you can revert back.
- Team members can make two-way door decisions autonomously without the explicit approval of a manager.
- Example: The Customer Support Team implements a new process for onboarding merchants and several parts of it are not working. The CS team can re-evaluate the process and change it to fix the issues.
- One-Way Doors are decisions you make and there is no going back.
- This is a decision that requires sign-off/approval from a manager (or higher leadership) before you are able to move forward.
- Example 1: A member of the Sales team wants to negotiate a special rate for a new customer in their contract. Once the contract is signed, it can’t be changed.
- Example 2: The People Ops team decides on a new health benefit offering for the year. Once decided, that cannot be changed until the following year.
Conscious Cultures enable everyone to make Two-Way Door decisions as much as possible, and limit One-Way Door decision making to only management and exec teams.
Each team member (based on their role) should have their own realm of decision making that is defined by their manager. Additionally, managers should be explicit with their teams about which decisions need buy-in from other stakeholders before moving forward.
Within that realm, team members should feel empowered to make One-Way Door decisions in consultation with their manager and the relevant team members, and Two-Way Door decisions independently with minimal consultation.
Having a clear Decision Maker (DM)
The most important rule for decision making is that there must be one clear decision maker (DM).
While the DM should collect input and feedback, they will ultimately make the final call, and articulate — using the framework below — the thought process behind their One-Way Door decision, next steps, and owners of those next steps.
When making a One-Way Door decision, complete the following framework to help you think through your decision.
Before making a decision, everyone should answer 3 questions:
- What is the decision?
- What is the desired outcome?
- What are the Pros/Cons?
To help you think about these three questions, use the question prompts in each section to help you think about and inform your answers:
What is the decision?
- What is the problem we’re trying to solve?
- Explain the issue.
- Is this a one-way door or two-way door decision?
- If a one-way door, are you the right person (or team) to be making this decision? Or do you need to raise the decision to the next level?
- If you need to raise the decision to the next level, then do so.
- If you are at the right level to be making this decision, then proceed with the next question.
- If a two-way door decision, then proceed with the next question.
- Who is this decision for/who does this decision benefit?
- Does this decision have an external impact?
- Which consensus strategy (see Driving Consensus below) are you using: immediate decision, strawman, or blank slate?
- What is the context? Why is it important now?
- Ideally, explain how this decision links to your company or departmental strategy.
What is the desired outcome?
- What does success look like?
- What is the business impact? And who does the decision impact? (try to think of as many ripple effects as possible)
- What data or metrics influence the decision?
- Show these in your analysis.
- What do we need to understand better/know more about in order to make this decision?
- What is the outcome of that research?
What are the Pros/Cons?
- Make a list of pros and cons of the decision
- What is our contingency plan if something goes wrong?
- Consider and make a list of the tradeoffs we are making in going with the decision
Once you have settled on a decision:
- Draft a written summary of your decision, including an explanation of what you ARE and AREN’T going to do.
- Share the decision with appropriate stakeholders so everyone stays in the loop.
- What are the next steps?
- If applicable, provide a timeline and KPIs on how we’ll be measuring this.
- Who will own those next steps?
- Create Asana tasks for owner(s) and use those to track progress.
Make a habit of using this framework to assess one-way door decisions. This will help you facilitate quicker decision making over time. The quality of any decision is based on the amount of prep work and thought that goes into it. This may sound like a lot of work at the beginning, but, again, excellence does not come for free.
Pushing back on decisions
Pushing back is a necessity for a healthy work environment. If you have an inclination to go in a different direction, do not sit quietly.
That being said, we should find respectful ways to challenge each other. Don’t just easily commit to decisions that you are fundamentally opposed to. Ask questions until you are fully able to understand why this is the best decision for your team/company. As you ask questions, make sure you elevate any blindspots that the other person may have not thought through, or highlight any data or logic the person may have omitted.
In certain cases, you will have to disagree and commit to move things forward but make sure your feedback, concerns, and fears are heard by the other party.
Agree (or disagree), and commit
Once a decision is made, it is imperative that the team either agree, and commit to the decision and path forward; or disagree and voice that opinion, but, ultimately, commit to supporting the direction the DM has chosen. (See Driving Consensus for ways to increase buy-in.)
Seek out different perspectives
As a manager, you are empowered to be the final decision-maker for your department and make autonomous decisions that align with your company’s greater goals. We all like to think we make good, sound decisions but it’s truly a balancing act. You have to seek different perspectives from the right people (it’s not just who you like and who supports your decisions), it needs to be objective, make sure you have the right information/data points, and it should be fool-proof.
The first step in making a decision is avoiding the idea that your word or approach is infallible. As you make decisions as a leader, you are the sole owner of that decision and responsible for the repercussions if it fails.
Clarify decision-making authority for your team
Be clear with your team about what decisions they can make without approval. You want to enable them to think fast and respond to challenges quickly. Avoid becoming the bottleneck for your team because they are running every question/thought by you first. During your weekly 1on1s and team meetings you can coach them on how to think through the decision-making process outlined above.
We are all taught that it’s important to listen to others and give our teammates time to speak. This is absolutely true. Openly listening to our teammates and hearing diverse perspectives is how we make the smartest decisions. We must value collaboration. We must value empathy.
That being said, a common pitfall of collaboration is unclear ownership and, as a result, inefficiency in driving toward outcomes. When it comes to making important decisions, we must be relentless in driving toward outcomes. We must cut through the noise. We must be willing to make clear and quick decisions at the cost of appeasing everyone involved in the decision.
This is especially true with regard to issues that are time sensitive or impacting day-to-day alignment. If there are misalignments, address them head on, immediately, and come to clear outcomes. This means defining next steps and who will own those next steps. Misalignments and a lack of clear ownership cost our teams dearly, and we must do our best to avoid them at all costs.
A decision is better than no decision
A common pitfall for A players is to always want to make great decisions. While we should always strive for that, we should not forget that speed is the lifeblood of an organization. A decision is always better than no decision.
Cooks in the kitchen
Each area of our organization and each task needs a final decision maker. Without a clear sense of the final arbiter, decisions tend to 1) not happen; 2) happen too slowly. The first case is often the result of the Bystander Theory — where each member assumes the other will complete the task. The second is detrimental to speed and velocity. It’s oftentimes more beneficial to move quickly than to suffer from analysis paralysis.
For strategic decision making conversations, it is best to limit the size of the discussion group. Thus, when strategic topics arise in larger team meetings, spin out a smaller team to meet and decide (with one person as the designated final decision maker). It is important to include dissenting voices and those with contradicting viewpoints into these strategic discussions in order to avoid groupthink.
One of the core challenges with decision making is how to get your team (and others) to buy into the decision. It can sometimes be easy to make a decision, but hard to get your team to be emotionally attached to it. Buy-in is created when people feel that they were part of the decision making process, that their input shaped the final outcome. The more influence they had on the outcome, the more agreement they feel with the final result.
Broadly, there are three ways to make a decision. Each has a different time requirement, and a different level of buy-in. Unfortunately, there are no free lunches. The method that creates the most buy-in also takes the most time.
The methods are:
1. Immediate decision: DM makes the decision, announces it to the team and answers their questions.
- Pro: Takes very little time.
- Con: Creates very little buy-in from the team. Gets no benefit from the knowledge of the brilliant and experienced team that has been hired.
2. Strawman: DM creates a written straw-man (first attempt at an answer), shares it with the team, invites the team to give feedback (written and verbal), facilitates group discussion, and determines the final answer.
- Pro: Creates more buy-in. Gets some benefit from the collective wisdom of the team.
- Con: Takes more time.
3. Blank Slate: DM invites the team to a meeting where the dilemma is discussed from scratch with no straw-man. DM and team equally share ideas. Final decision is determined by consensus, if possible.
- Pro: Creates the most buy-in. Gets a lot of benefit from the collective wisdom of the team.
- Con: Takes the most time. If you want more buy-in and a better decision, you need to take more time in making the decision.
So, which method should you use?
It depends on how significant the decision is, and how important buy-in is.
For everyday low-impact issues, Method 1 is preferred. For core, major issues (like Company Vision), Method 3 is preferred. And for everything in between (the vast majority of important decisions), Method 2 is optimal.
Be wary of the loudest voice in the room
Whenever you choose to use Method 3 to get full buy-in, it is important to be wary of those with the strongest and most vocal opinions (if they are not backed up with data and/or logic). When collecting input and feedback from the team, it is important to make sure that everyone’s opinions and voices are heard. Contradicting opinions and dissenting voices are a key part of any discussion and help us avoid groupthink.
One strategy for avoiding the “loudest voice in the room” problem is to have people write down their vote and/or their thoughts and share those insights anonymously at the start of the discussion. The DM can then direct the conversation toward the strongest ideas.
For leaders/managers, it is also important to recognize the weight that their opinion carries. In order to get full buy-in, they will have to elicit people’s truest thoughts without “tipping their hand”. Once people hear a manager’s perspective, some % will naturally alter their own views to more closely match yours. This % is much higher than one might imagine. People assume that as a leader they have more information than they do, and therefore their perspective is probably more correct. Later, these same people will not feel fully bought into the decision, because, internally, they will know that their true thought was not actually heard.
One tactical suggestion for managers is, when expressing your opinions, reiterate that you’re not married to your thoughts and that you are eager to hear other opinions (e.g. “I’m not wedded to this, but…” or “I’d like to hear other perspectives on this, but my initial thoughts are…”)
Check out this article on how to avoid swaying the opinion of team members when you are making a decision.