Tuesday, March 25, 2008

The right decision vs. making a decision

Having spent much of my time since Jobster working with early stage companies, I have come to see some striking patterns in the challenges that they face.

One such similarity is in the area of decision making. Start-ups by nature find themselves facing decisions where:
1. There are multiple right answers and multiple wrong answers
2. There is little precedence and no data to easily interpret which is which

In these cases, the worst thing that the organization can do is get stuck in analysis and extended debate. If it truly is a decision that meets these characteristics, then I would ask if there is anything that anyone can provide to enhance the clarity of the choices other than opinion?

Right out of Microsoft facing a decision point like this, you would have found me digging in, debating my point of view with the rest. Not so much anymore.

When an early stage company finds themselves in this situation, the bottom line is that the organization will ultimately lose in the end regardless of the outcome.

It loses because it wasted time (sometimes months) debating and politicking their way to a decision, leaving the door open for a competitor to "out-maneuver" them.

It loses because this extended process not only alienated the participants along the way but may have fractured the cohesiveness of the team.

It loses because there may not have been a wrong answer at all.

If hindsight has taught me anything, it is that oftentimes there is no wrong answer. The right answer is to simply pick one and start actively learning along the way- building the data that will inform future decisions. The wrong answer is to do nothing and forgo any learning at all.

How can young organizations avoid this trap? To tell you the truth, it is really difficult, especially when an early stage company has filled it's senior management ranks with seasoned, big company people. These folks are heavy hitters; they're used to getting their way; they're used to winning debates; their saavy at corporate politics. Their comfort zone is to do exactly what the company cannot afford to do.

This is when the CEO must sometimes play the "I'm in charge" card. She/he must be proactive in curbing these tendencies. They must be willing to proceed without total consensus, especially if it relates to a new product that is outside the organizations comfort zone. They must open the organization to leaning toward decisions that produce opportunities for the organization to learn from the market.

Depending on your industry and product, this approach has varying levels of risks. I think it works best in an Internet, software based technology company, where software and services can be easily iterated, and users/customers can seamlessly and immediately gain the value of the next iteration.