Are you too tired to make the right decisions? [Growth Needle™]

Why we can't ignore the role our mental state plays in decision-making, the magic in finding our "Domino Decisions" and why root causes must be determined to properly solve problems.

Greetings from Vancouver! 👋

As you may have noticed, the Growth Needle newsletter looks slightly different this week. That’s because I am in the process of transitioning to Substack for a better writing and reading experience.

You can still unsubscribe with just one click at the bottom of this email and there’s other features that I will be rolling out in the next few weeks. For now, there’s nothing you have to do if you want to continue reading this newsletter.

That being said, let’s talk about the topics for this week. You’ll learn why the mental state behind decisions cannot be underestimated, the power of finding “Domino Decisions” and why finding the root causes to problems is essential.

Let's jump into it!

You Can’t Ignore You Mental State When Making Decisions

In a culture built on hustle, it is easy to forget the importance that our mental state plays when making decisions. I’m currently in the process of moving houses after realizing that my current location is no longer conducive to my lifestyle. I live in downtown Vancouver and the noise level around me has been a big factor in my overall stress level.

Making decisions while under stress is not ideal. Some studies have shown that stress, lack of sleep and other factors can be the equivalent of being drunk. If you have ever had multiple nights of bad sleep, then I’m sure you relate to the difficulty that can arise from a tired mind.

While it is not always possible to delay decisions until you feel more rested or calm, you have more power than you may think. Most leaders can look ahead and determine their “peak decision days” where they will be needed to make critical decisions. It could be a strategic meeting or an investor day or something similar.

Plan your life to ensure you get enough rest ahead of these days. You might lower your personal commitments or block out time to do relaxing activities. Athletes double down on their mental routines during the playoffs or championship games and you can adopt a similar mindset.

You may have the best framework in the world for making decisions but if you’re not mentally sharp on that day, you may still end up choosing the wrong option.

Question: Are you planning your life around your most important decisions?

What’s the Domino Decision You Should Knock Over?

I’m fascinated by those domino-falling videos. I’m sure you have seen them. Someone lines up hundreds or thousands of dominos one after another and then they knock over the first one, causing a satisfying chain reaction.

There’s something similar with something I called “Domino Decisions.” These are the decisions leaders need to make to ensure the other pieces fall into place. 

In a strategy formulation, a domino decision is figuring out where your organization should focus. You may determine that your strategic areas should be technology, culture and brand. You don’t have to figure out the ideal CRM vendor, the best way to organize in-person days for better culture or how to build a world class brand. Those dominos will be tackled by someone else.

A good Domino Decision sets in motion a flurry of activity. Executives who tried to tip over too many dominos end up being overstretched and less effective. You can’t knock down hundreds of dominos one by one but you can do it if you design your strategy correctly.

Question: Are you aware of the Domino Decisions that you need to make within your role?

Keep the Root Cause Simple

I keep seeing all these courses on critical thinking, a topic I love. There’s much to be said about the relation between critical thinking and decision-making but let’s focus on just one element, the root causes of problems.

Organizations have to solve all kinds of problems. Some are minor and some are major but they all depend on properly identifying the root cause of the problem. You can spin your wheels for months and years, chasing after the wrong root cause. 

Take housing in Vancouver, for example. Vancouver has some of the highest housing prices in the world and there are plenty of debates on what is the right solution. Should you impose a tax on foreign purchases? Should you tax homeowners who leave their apartments empty instead of putting them on the market for rent?  Should you provide tax-free savings accounts for first-time home buyers?

Vancouver has one all three of the above ideas, with little impact. My contention is that the root cause of housing challenges is a lack of supply. There simply aren't enough houses available for the amount of people who want to live in the city.

I’m not saying something controversial or revolutionary. Few people would argue against my statement but if that is the root cause, then you need to tackle it directly. Taxes on foreigners and empty units may increase the amount of supply but only so much. As we have seen, these two initiatives didn’t release enough units to make a difference.

To increase supply in a significant manner, you would need to look at obstacles for new developments. For example, stringent requirements for new apartment buildings means that construction projects take 5 - 8 years. You also have measures like rent control—which have shown to reduce the supply of rental units—or zoning limitations for where high-rises can be built. 

Finding the root cause of a problem determines the actions that need to be taken. Taking action for the sake of showing movement isn’t enough. If you’re not directly solving the root cause, then what are you doing?

Question: How do you know that you’re tackling the root cause of a problem?

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Have a great rest of your week!

Ruben

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