A Guide to Making Better Decisions

By Villi Iltchev on April 8, 2020

Making decisions is one of the main jobs of a founder and a manager. The average organization, big and small, makes thousands of decisions every day. How teams make these decisions is one of the most important factors in the health, culture, and success of an organization. I believe the cadence and effectiveness with which an organization makes decisions is directly correlated to its ability to stay ahead of competitors and win in the marketplace. Most decisions are sequential and impact other decisions downstream, which means that an inefficient decision making process has magnifying implications as it reverberates through an organization. Today, in this challenging and disruptive business environment, leaders in every organization are facing difficult and important decisions that will impact the trajectory and success of their companies going forward. Strong culture and processes that facilitate clear and efficient decision making are critical to success, which is why I wanted to offer a few thoughts and observations about making decisions.

Be clear what you are NOT going to do

Most people do not contemplate what they are not going to do as an explicit decision. They tend to focus on activities they are going to do and, thus, tie decision making to those activities. I think that is a mistake. Providing clarity and being explicit about what you are not going to do is critical. Leaving decisions hanging, keeping things flexible, kicking the can down the road is devastating to your team. It completely trashes the team and morale. They keep wondering if something is actually within scope or not. They keep going back to open questions not knowing where the line is, resulting in a ton of wasted work and words. Being crystal clear about what you are not going to do is incredibly empowering and will free your team to focus on the things you care about.

Don’t waste time debating two-way doors 

I remember reading about Jeff Bezos framing decisions as two types. The first are two-way doors, which are decisions that are easily reversible. The second are one-way doors, which are decisions that are hard to reverse. Think about building a new product, hiring a new CRO, or building a new distribution facility. All of these are decisions that are not easy or cheap to reverse. One-way doors are the types of decisions that require careful consideration and analysis. They are worthy of debate and deliberation. But, those decisions are very few. The majority of decisions an organization makes are two-way doors. They can easily be reversed with more experience or data. Good companies do not dwell on two-way doors. They thrive on making decisions quickly and efficiently, which allows them to learn faster and make adjustments. As a founder or a manager, it is your job to ensure that neither you nor your team is wasting everybody’s time on reversible decisions. Empower and encourage your team to make a decision, learn, and move on. Make the call!

Push decision making down into the organization 

Letting go of decision making is hard. Founders struggle with this and often have a hard time scaling their startups because they are unable to let go. For those of you who haven’t already, you need to learn to give away your legos. My general view is that good managers increase the effectiveness of their team, which means they look for ways to get out of the way. If your team is waiting for a decision, you are the problem. A good manager should not allow their decision making process to slow down the organization. If decisions are waiting on your input, it is a clear sign that you either need to prioritize moving the process forward, or push it down to your team. Becoming a bottleneck for key decisions is painfully demoralizing to an organization. Remember, it is not about you, it is about your team.

Seek ways to destroy the politicization of decision making

In almost all organizations, every day you will hear a manager say “Why was I not part of this decision? Has Bob from marketing approved this? Has Nancy from legal reviewed?” This is usually toxic. Pushing decisions down into the organization allows the stakeholders with direct knowledge and accountability to make the decision. Small teams making a decision is fine. But, do not confuse this with making decisions by committee, which is a great way to destroy the culture and efficiency of an organization. There is a big difference between effective and transparent communication of decisions, which is key to coordination and collaboration, and making decisions by committee. The fewer people around the table, the greater the accountability, the better the decision making process.

The views expressed herein are solely the views of the author(s), are as of the date they were originally posted, and are not necessarily the views of Two Sigma Ventures, LP or any of its affiliates. They are not intended to provide, and should not be relied upon for, investment advice.