How to make great decisions

The cheat sheet to becoming the best you decision maker you can be

Quick note: If you enjoy reading this newsletter, you can subscribe to receive any new posts directly to your inbox.

---

dharmesh @dharmesh

Great CEOs are decision machines.

I recently saw this tweet from Dharmesh Shah, founder and CTO of Hubspot, and it really resonated with me. One of the key skills I have honed over the years is being very good at making decisions, and in this post I will distill everything I know into practicals tips that everyone can follow.

1. Always Be Closing Collecting Information

Step number one, and this is probably the most important step: you need to be in a constant state of keeping yourself well informed on the world around you and what is going on in your business or team.

Andy Grove, legendary former CEO of Intel, describes in his book “High Output Management” the 3 distinct ways managers can create leverage:

1. Information gathering

2. Decision making

3. “Nudging” others

If you only start looking for information at the moment of thinking about a specific decision, you will be making poor decisions, and you’ll make them slowly as well. Speaking of speed of decision making, let’s move to the second most important tip.

2. Make fast decisions

“There are basically no companies that have good slow decisions. There are only companies that have good fast decisions.” - Larry Page, founder of Google

In other words: all slow decisions are bad.

Practical tips to reduce the decision cycle time:

• Time-box every decision, and create artificial short deadlines when there isn’t a natural deadline.

• Limit the iterations of feedback and input to 1 or 2 iterations max.

• Remind yourself that 99% of decisions are reversible two-way door decisions, and can be reversed easily if wrong.

• Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you're probably being slow.

3. No decisions by committee

Every decision should have one, and only one, decision maker. We shouldn’t confuse getting buy-in with decision-making by committee. We need to trust each other and divide and conquer. There are 30 different ways to do something, 10 of them would work, we just need to find one.

Having just the single decision maker is also great for the empowerment of the team members, as well as for creating a culture of accountability in your team. In my experience most decisions by committee are done this way to intentionally “dilute” accountability, which leads me to my last and final tip #4 below.

4. Safe to fail

The single biggest blocker to quick and effective decision making is fear. If people are afraid to make mistakes, then they will think a million times before taking one step forward. If that resonates with you, or if you find that decision making is pretty slow in your team, ask yourself: do people feel safe to fail?

And by the way, making people afraid of failure doesn’t necessary come from reprimanding them or shouting at them for making mistakes. It is sometimes the result of very small seemingly benign things such as for example an executive being a perfectionist and reviewing everything and making changes to them before going live.

In some cases when my team ask me to review something I make it a point to only review it after they ship it, to make it a habit that we aim for “error correction” instead of “error prevention”. The only way to move fast is to be comfortable making some mistakes a long the way.

One final disclaimer: apply judgement as necessary. Being a manager/leader is a hard job and it often involves a high degree of good judgement. Good judgement is the byproduct of experience, and experience is gained by just trying to do things and failing a few times. You’ll get it wrong before you get it right.

---