Episode 28: Decision Making
Sometimes letting go of what you think is valuable to the market is the best decision you can make. It can free you up to look at the world the way a customer looks at it. Doug and Glenn double down on gettin’ real clear about the problem you are trying to solve, and then attacking it with some sort of simple process. As you’ll hear in this episode, getting the perspective right and combining data with human judgement has made the difference between a No Go and a Hey, Let’s Go for folks who’ve made a dent in our culture in the past. So, what are you waiting for? Why not hit that GIANT play button right NOW.
Transcript
Glenn Suart 0:00
I’m not saying you do this every time but… like, you don’t have to formally write everything out – but [if] you get into a routine of doing it, it gives you some structure and also makes it easy to defend your decisions. Because inevitably, as an entrepreneur, you have control of what you’re doing but maybe you have to defend your decision to investors or to stakeholders or to your employees…
Doug Ross 0:36
Welcome to Conversations on Startups, a podcast brought to you by Douglas Ross, author of the book, Spark Click Go: How to Bring Your Creative Business Idea to Life, and Glenn Suart, of Today’s Great Idea, a radio series featuring over 300 origin stories of businesses, brands and inventions that have changed the culture. Welcome to today’s conversation.
Glenn Suart 0:59
Good afternoon, Doug. It’s Glenn here in Calgary. How are you?
Doug Ross 1:03
I’m well, Glenn, how are you?
Glenn Suart 1:05
I’m very good. I am happy to sit with you and talk again about some of these great topics. And today, I think it was going to be decision making?
Doug Ross 1:15
Yes, let’s do it.
Glenn Suart 1:17
Ah, ok. [When] we talk about decision making. Let’s be clear. What are we talking about? Is it decision making by how people make decisions, or are we talking about the decision maker?
Doug Ross 1:27
Well, when I thought about this, in the lead up, I was thinking it could be any and all of the above. It’s a very big topic that we’ve taken on here. So I guess it’s up to us to decide how we want to focus that. But to me, all of those things come into play. I’ve witnessed a lot of good decision making in my time with startups and other businesses, and I’m sure you have as well. [Yep.] Also a lot of different types of decision making, we could focus on the big kind of strategic decisions that need to be made. And we’ve dedicated whole episodes to those. Things like which user group to go after, which market to enter first or second – that kind of thing. Or we could talk about operational things, the day to day, what do you think would be most of interest for our audience?
Glenn Suart 2:20
I like the process, the process of decision making, whether it’s a small decision or a big decision. [Ok.] How do people make decisions and there’s the gamut, there’s the no thought at all, and you just do something. There’s the I have a gut feeling. You know, we’ve all been with people who say they have that. And sometimes it works and sometimes it doesn’t. And then there’s the extreme on the other side, that is oh, you’ve got to spend a lot of time and consult with people and you get into analysis paralysis kind of decision making. You’re essentially putting off stuff – there really is a wide range. And to me, it comes down to consistency in terms of how you approach decisions, and how you make decisions. I like a simple template of… when I try to make a decision. Really simple. What’s the problem or opportunity you’re trying to solve? How does it fit with the company and what we’re doing? And then, What are the alternatives? Like, you know, the cost / benefits and risks of each one, including the status quo of, you know, if you don’t do anything. You compare them all and you make a decision, like, but you have a structure to make a decision like that. That’s how I like to roll. How about you?
Doug Ross 3:34
If I’m doing it well – maybe something like that. Yeah, I think a structure is great like that. I’ve had many times in my career where I’ve done that well, and others that I haven’t, but I liked the way you laid it out. So let’s dive into that a little bit. The first thing you said was, What’s the problem we’re trying to solve? And it sounds easy, but it’s easy to skip that part.
Glenn Suart 4:04
Very much so.
Doug Ross 4:04
There’s really not… not even stop… I… just working with small groups when somebody poses that as a question [when] you’re trying to figure something out, it’s just so helpful to clarify that. So I love that first step.
Glenn Suart 4:21
You cannot underestimate this exact thing. If you’re not solving the right problem. And it sounds so obvious. I had this great example. I was doing some work for a police agency here in Alberta. They needed a $50 million Training Center. And they had their business plan for it. They basically said, oh, you know, can you write us a better business plan? I said, The problem isn’t the business plan… [it’s] is… you haven’t defined the problem correctly. And they said, well, Our problem is we need a training center. And I said to them, No, that’s your problem. That’s not the government’s problem. So let’s change the title. So we changed it to meeting minimum mandatory training requirements, and mitigating occupational health and safety risks, which of course, is the government’s problem.
Doug Ross 5:08
Very snazzy title too if I may say, Glenn.
Glenn Suart 5:10
Very sexy, yeah. We also fixed up the plan a little bit to make it stronger in different… different ways. But the thing was, by defining the problem correctly, we were able to get action when we couldn’t do it. But just saying we need a business… we have a training center, the government said we didn’t have the money. So we made it their problem. That’s my classic example of defining the problem correctly.
Doug Ross 5:32
Yeah. And you shifted the perspective there. [Yep.] Which I find to be very interesting. And I think when we’re talking about startups, if you’re wondering whose perspective to take, my thought is, first and foremost, you should take the perspective of your customer and ask yourself, Are we solving this problem for the customer? Or who’s the customer? What is the problem for the customer that we’re trying to solve? Is it access to our goods or service? Is it price? Is it affordability? What… what is it? But I think that that perspective is really important in the example that you just talked about. Of course, [the]customer isn’t the only perspective when it comes to a startup but it’s hard to say there’s any group that’s more important. If you’re not serving a customer profitably, you’re not going to have investors, and all of the rest sort of flows from whether or not you can solve problems for the customer.
Glenn Suart 6:33
Yep, no, it makes sense. It can happen with big companies, it can happen with small companies. I think I’ve… I may have told you the story before I don’t recall. But it’s all about data and making decisions. Can you tell me… it’s always people forget the story when I tell it. So here you go. So Pfizer, major pharmaceutical company, they have a product they spent $100 million on called sildenafil, and it was for heart issues. And they analyze the data. And after all the testing and everything else it just wasn’t what it needed to be. And so they were ready to shelve it when the researchers [who] were just going through the data realized there was a side effect… that was an effect, that was very valuable, or an issue. And they basically realized that they could repurpose this sildenafil for that treatment. And it worked really well. And… and today, it’s the single most successful drug of all time, under a new name of course. Any ideas, what we’re talking about?
Doug Ross 7:29
Does it rhyme with Niagra?
Glenn Suart 7:31
It does. It does. Viagra. Exactly. And the little blue pill… here is an example of good decision making. They could have thrown $100 million away, but they spent some time going through it and researching and realizing that the problem that they were trying to solve… [it, sildenafil] didn’t work for that, but there was a whole other problem and if they market it a different way and try something new – and it worked. And so, they did the sort of Here’s… What’s the problem? How does it fit with what we can do? What are the costs, benefits and risks? The risk was… they’d already tested it and knew it was safe – so they’d mitigated those risks. And they… Hey, let’s try it and see what happens. And the cost to produce [it of] course was low at that point. Major winner. When you think about making decisions. I’m not saying you do this every time but… like, you don’t have to formally write everything out – but [if] you get into a routine of doing it, it gives you some structure and also makes it easy to defend your decisions. Because inevitably, as an entrepreneur, you have control of what you’re doing but maybe you have to defend your decision to investors or to stakeholders or to your employees… that we’re going in this direction for these reasons. And here… having a framework to make a decision allows you to get everybody on side.
Doug Ross 8:47
Hey podcast listeners, we’re gonna take a short break now. If you’re enjoying the show, feel free to invite your friends, remember to subscribe, and if you want to help spread the word leave us a review on Apple Podcasts or your favorite podcast app. Each episode of Conversations on Startups focuses on a single topic. If you want to comment on something you’ve heard on the podcast, or suggest a topic for us to cover in a future episode, send an email to: go@todaysgreatidea.com or douglas@sparkclickgo.com. Glenn and I appreciate you and hope you find our uncut and unrehearsed stories, perspectives, and tips helpful. Speaking of helpful stuff-let’s pick up where we left off.
Doug Ross 9:33
I like that, Glenn and what I’ve seen in pivots in startups that I’ve been embedded in, is that you have the CEO making decisions, mostly unilaterally let’s say without some… or without perhaps an articulated process. That doesn’t mean that the persons that I was involved with, and you may have been involved with as well, it doesn’t mean they don’t have a process but you don’t always see it. And I think both of those elements are important, I have some sort of process that I’m using and here it is, so that people can see it and ideally provide input into that. So for example, you’re thinking about a pivot, this has big implications for the company. For example, the people you have there right now might not be the right people and you might have to bring in new people. So there’s big implications [that] affect people personally and affect the company. And it could be very good, as we’ve said before, there have been a number of successful pivots that we’ve talked about. Slack is a good one. [Yeah.] You may know that story, too. And they were creating a gaming system, and realized that actually, the communication system that they built to communicate with one another was the marketable asset. So similar to the example that you had just given with Pfizer. But when these pivots happen, I think getting input from people and identifying which alternatives are being considered, articulating that makes sense so that you can hear and think through a little bit what each of those might look like in terms of your whole business model.
Glenn Suart 11:17
Right. Makes good sense. And, again, don’t go overboard and spend three months trying to make a simple decision about who’s going to cut the keys for your new office. There’s analysis paralysis, time and energy…gotta figure into the decision making, and also the the importance of the decision. If you’re changing your direction, that’s really important. Spend time on that. Don’t spend time on, you know, whether you’re going to change coffee suppliers. There’s a priority sequence. And part of your decision making process is trying to figure out which decisions are the most important ones that we should be making right away, and then the other ones [you] can spend less time on.
Doug Ross 11:56
Yeah, makes sense. Or somebody else can make that decision. So what do you do though in the case of no data or limited data, because there are some decisions, and I actually just read this book called Build by a gentleman, Tony Fadell, do you know the name?
Glenn Suart 12:13
I don’t.
Doug Ross 12:18
Okay, so I recommend this book. Tony Fadell is the person behind the original iPod, and then the iPhone. So he was at Apple… he had… he had lots of other experiences before that and then he took all of that experience, essentially a startup experience, but from within the… the big company setup. And then he created Nest. [Oh, wow.] and the Nest thermostat, and so on. Anyway, his book’s great and I recommend it to entrepreneurs. And one of the things he says about decision making… that he says, which I quite like, is he puts them into two categories – those [decisions]that can be solved with data, and those that cannot. And he likes to articulate each of these things, because let’s face it a lot of decisions are made based on opinion. Okay, that’s fine. [Yep] We should just say, You know what, guys, we’re limited on data, this is going to be opinion and this is going to be between you and me as the co founders, for example, or if you’ve set up your company with [a]CEO, even if you have more than one founder, some of these decisions come down to the CEO in the end and that person should be able to say, Look, the data took us this far and then beyond that, it’s an opinion, and my opinion is X. And this is the reason… and it’s kinda like that gut decision. But the difference is, it’s in saying out loud, Hey, can we solve this with data? Okay, great, yes or no? And if not, then you just have to admit that and make the decision based on a certain degree of gut.
Glenn Suart 13:58
I think so. Like, there’s, you’ll know what… no matter how big a team you have, or how many resources you have, you will never have enough data. There’s always going to be something else there. So you need to test out how to make good decisions and to your point, value certain data, make sure you’ve got enough of it. There’s a great example, and I think you’ve probably seen the picture on the internet ’cause I think people circulate it a lot. The meme of World War II. The planes that would come back had bullet holes in certain places on the wing and the fuselage and stuff and they figured let’s make those places stronger to withhold those particular areas. But in reality, those were the planes that came back, the planes that didn’t come back – or the areas would get probably got shot in other areas – so the other areas were in fact, the right place to make the extra armor, type of thing. So it’s a good example of using data but being careful it’s the right data that you’re analyzing.
Bridget 15:02
You’re Listening to Conversations on Startups with Doug and Glenn. Thanks for joining us. Let’s get back to the show.
Doug Ross 15:12
Oh, it’s a brilliant example and great imagery. And it shows the limitations of data or if you flip that around, it requires both data and judgment – human judgment – to really do this well. That’s a great example. And somebody has to say, Hey, wait a minute, what about the planes that were not evaluated?
Glenn Suart 15:37
100 percent.
Doug Ross 15:38
That’s a good one, Glenn. I love it.
Glenn Suart 15:40
Maybe to summarize, for entrepreneurs, what I see is…. nobody’s perfect in making decisions. Elon Musk makes bad decisions all the time too. He makes a lot of good decisions, you can argue, but you also have to realize nobody’s perfect. But a lot of the people have a structure to… like, how they make decisions and then they know how to communicate how they made the decisions to the rest of the stakeholders. Those are two important things. It doesn’t have to be super formal. But it has to be done consistently. Those are the things I see when it comes to decision making.
Doug Ross 16:13
Yeah, I love it. And I think both of those things are important. Here’s the decision, here’s why I made that. A lot of people miss that step. And they just fall toward: “Well, I am the authority person here. I should be decisive. That’s what people want me to do.” And I see that a lot with entrepreneurs. They are action oriented. And they need to be in many ways. But with some of these big questions like a pivot, for example, there is some merit instepping back a little bit. And it’s, yeah, it’s decisiveness within a reasonable period of time. But you’ve dug into it a little bit, you’ve maybe involved some people, and you explain to people how you came to that decision, I think you’re going to have a stronger decision. Not only that, though, it’s not necessarily that there’s a right and a wrong… you can’t run the experiment again. But if you do that with a little bit more transparency, and a little bit more involvement of the people around you, you’re likely to have more support, or at least more support from the people that want to be involved in that new direction. Others will just say, Great, glad for it, and you know what, that’s not me. And wish you well, and vice versa. But I think you’ve laid out some really fundamental planks here, Glenn in what makes for better decision making.
Glenn Suart 17:39
Awesome, okay, well, this is good. What’s our next subject matter?
Doug Ross 17:43
Next time, we are going to tackle the subject of customer needs?
Glenn Suart 17:48
Very excellent. I think it’s something that’s probably overlooked by most entrepreneurs. Again, I’ve seen a lot of people get really excited about the widget that they’re selling, and how the features are so cool and solves this problem and that problem. They don’t understand what the customer need is and the benefits that they are delivering. So understanding customer need is critical.
Doug Ross 18:10
Agreed. Okay, so let’s dive into that next time.
Glenn Suart 18:14
Sounds good.
Doug Ross 18:14
Glenn, it’s been great talking with you here. I’ll see you on the flip side.
Doug Ross 18:27
Conversations on Startups is a production of Glenn Suart and Douglas Ross. We hope you’re having fun listening but mostly that you take action on your business idea. For more inspiration visit our websites: todaysgreatidea.com and sparkclickgo.com. Another episode of Conversations on Startups will drop soon, or is already available to binge. Thanks for joining us, and remember to subscribe and invite your friends. See ya next time!
Transcribed by https://otter.ai