By Julian Hoelz and Dr. Thomas Reinbacher – www.MakeBetterDecisionsFaster.com
In our last blog entry we introduced the unlimited time paradox: while we all agree that time is money, we keep acting as if corporate time was unlimited.
Not being mindful of your own time or that of colleagues has ripple effects throughout an organization. Remember your typical weekly team meeting? Every minute of such a meeting will cost your organization 20 EUR. If poorly executed, these meetings have a strong negative return on invest, and if made transparent, no sane manager would approve them in the first place.
Why we need to start treating time as a scarce resource similar to your financial budget? Being mindful about each other’s time and treating it like a scarce resource will have three major benefits for your organization:
1. Decision speed will go up
Setting clear timelines and deadlines to avoid wasting precious time will help you get started on work sooner unblock roadblocks more quickly and, most importantly, lower the risk of taking a ‘wrong’ decision. In companies with high decision speed, it’s easy and less risky to decide as you can quickly adjust course if necessary. This improves decision quality, too. Increasing the decision drumbeat will speed up learning across your organization as you get into a habit of taking decisions, measuring their effect, and improving quickly.
2. Decision quality will go up, too
You’ll start focusing on fewer things more intently as you increase your organizational speed. Prioritizing the really critical decisions and breaking them down into manageable chunks will help you make the call when it counts.
3. More time for execution
Finally, by focusing on where you can have the biggest impact, you’ll learn saying “no” more often to free up time for the really important stuff. This will give you more time for actual work that makes a difference, i.e., execute on the critical decisions made.
So the concept that faster decision-making will help you make better decisions and give you more time to execute on those decisions is all clear and well understood. Now how can we make this happen? Let’s have a closer look at two organizations that excel at making great decisions quickly. In the following, we’ll look at Google’s decision drumbeat and how McKinsey prioritizes and prepares decision-making.
Learning from titans – decision drumbeat at Google
In a recent interview, Alphabet’s Executive Chairman Eric Schmidt revealed how Google’s executes on a one-week decision drumbeat:
“The most important thing to do is to have quick decisions—and you’ll make some mistakes, but you need [rapid] decision-making. We ultimately adopted a model of a staff meeting on Monday, a business meeting on Wednesday, and a product meeting on Friday, and this was organized so that people could travel in the right ways. And the agenda was, everybody knew which meeting the decisions were made at—and so as long as you could wait a week, you knew you would get a hearing on your deal”
Here is another take on the matter by Dave Girouard, CEO of personal finance startup Upstart and former President of Google Enterprise:
“All business activity really comes down to two simple things: making decisions and executing on decisions. Your success depends on your ability to develop speed as a habit in both.”
While working at Google, Dave Girouard observed how Eric Schmidt made it a priority to set clear timelines and firm deadlines:
“Because founders Larry Page and Sergey Brin were (and are) very strong-minded leaders involved in every major decision, Eric [Schmidt] knew he couldn’t make huge unilateral choices. This could have stalled a lot of things, but Eric made sure that decisions were made on a specific timeframe—a realistic one—but a firm one. He made this a habit for himself and it made a world of difference for Google.”
Learning from titans – prioritizing and preparing for decisions at McKinsey
At McKinsey and Company, a typical project has challenging ambition, crazy scope and a super tight deadline. So on day 1 you typically find yourself asking: How on earth will we make this happen? The answer: priorities, priorities, priorities!
The approach is to break down big decisions to their constituent parts and identify the most important ones: where is the biggest gap between the best and the worst imaginable outcome, i.e., where can you have most impact? This leads you straight to the most important decisions that need to be taken.
Now collect all available data, analyze it, and come up with a first answer. The key is to iterate quickly and often with as many people as possible to filter out faulty assumptions or conclusions.
Translating this to our overall question of how to improve the quality of your decision-making, we can see that in order to deal with large, unstructured problems – which typically results in taking the most important decisions that will require most of your energy – you need to get comfortable with three things:
1. Seeking and receiving early, open and factual feedback
2. Coping with uncertainty and deciding despite imperfect information
3. Have a strong bias for action
In our next blog, we will talk about how to excel at executing your decisions, and which tools & techniques can help you achieve this.
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