How to feel more certain in your strategic decisions
How to feel more certain in your strategic decisions
By looking through history for precedents, changing rewards systems and using anonymity.
Greetings from Vancouver! 👋
In this week’s newsletter, you will learn three ideas to increase the certainty of your strategic decisions. While it is not possible (or desirable) to reach 100% certainty, there are several things you can do to feel more confident in any given decision.
Here are the three ideas, feel to jump around to the one that most catches your eye:
1. Using historical precedents to understand a seemingly “unique” situation
2. Changing the reward system to reduce the repercussions of making the wrong decision
3. Using anonymous voting to surface hidden objections before making a decision
Let’s jump right in!
Have I Seen this Movie Before?
A boom in an industry such as electric vehicles creates all kinds of surprising ripples in nearby industries. Take the market for utility-poles, one of the keys to ensuring charging stations can be installed in the most remote of locations.
To put up a transmission line, you need big trees, specifically Southern yellow pine, a breed of trees grown in the Southern United States. The farmers and firms in charge of planting, harvesting and preparing the trees for utility-poles are facing the good problem of too much demand.
The leaders inside these companies should not fret though. They can make better strategic decisions by looking for historical precedents on how to best navigate these situations.
For example, for many years, demand for oil outpaced supply leading the boom for oil states in the 20th century. As the price of oil increased, other options became economically viable.
Canada’s oil sands did not factor into oil reserves numbers until about 30 years ago, even production started in the 1960s and the sands themselves have been there for thousands of years.
Historical examples give you clues on how to make better decisions. The key to noticing these clues is letting go of the hype that goes along with some trends. AI companies may think they are on the cusp of something the world has never seen before but if AI pans out, it will likely be similar to how other technologies such as industrial machines and electricity were adopted.
Don’t assume you’re facing something the world has never seen before. Someone has already watched this specific movie and they can easily spoil the ending for you.
Takeaway: Look for historical examples to help you understand how to optimize your decision-making process.
Who’s Job is on the Line?
Some of the greatest basketball players—Kevin Garnett, Kobe Bryant and Lebron James—joined the league straight out of high school, a cohort known as the “prep-to-pro.” The NBA has since banned the practice, forcing players to complete at least one year of college, before declaring for the draft, believing that most high school graduates aren’t mature enough for professional basketball.
Before the age-minimum rule was implemented, many NBA executives hesitated to draft a high school player. After all, a player may be labeled a “phenom” but could easily flame out when faced with stiff competition. Having a high draft pick go bust, often in spectacular ways, meant the job of the executive was on the line.
Other industries may not operate on such a cutthroat world but the fear of repercussions is one of the reasons why organizations do not embark on bolder strategic decisions. The incentive of keeping your job may override any logic, even in organizations who clearly could do with more boldness.
The second idea for this week revolves around how to best reward those individuals and teams who go after big ideas.
Some organizations create awards for the best idea (regardless of outcome), offer bonuses for innovation or have created a culture where good thinking is highlighted. All of this is balanced against the typical rewards around performance, growth and profit.
Some strategic decisions do not survive the double fury of uncertainty and fear and they end up subsiding into obscurity. You can change this by rewarding effort, giving comfort and incentivizing boldness.
Takeaway: Sometimes it is not about increasing certainty but removing the obstacles that create hesitation, such as losing one’s job for making the wrong decision.
Why Didn’t You Say Anything?
The third idea is to allow the anonymous submission of objections by your staff, before and during strategic planning sessions.
Strategy cannot be formulated by the entire company, it has to be limited to a handful of people (typically 6 - 14) but that doesn’t mean you cannot explore potential objections from everyone else.
Some of these objections will not be relevant but they can give you a clue to what could derail your strategic decision. Part of uncertainty is not knowing what could get in the way and seeking objections helps you minimize this possibility.
Experiment with use of anonymity, in particular. Some people fear repercussions if they say something negative about their team or even worse, their boss. You may disagree with this attitude but it doesn’t change reality.
I like to use anonymity during strategic planning sessions when I sense that some individuals are withholding objections. For example, in a recent session I got the impression that three out of the eight participants did not agree with the perception from the Executive Director.
I ask them to submit their feedback anonymously and then read it back out to the group for discussion, guiding them through the awkward conversation. Once the objections were in the open, we could deal with them.
Anonymity can be a great way to surface objections before making a big decision. If left unaddressed, these objections can fester, growing into the weeds that can eventually suffocate the very same decision.
Takeaway: You cannot move forward with a strategic decision if there are objections still left to be resolved. Anonymous voting can bring those objections to the surface.
Weekly Video
Mission, vision and values is a standard trifecta covered in most strategic planning processes but many organizations could benefit from a 21st century upgrade. In this video, I dive into how to make them appropriate for everyday decision-making and avoid the fluffy rabbit holes that swallow many teams.
That’s all for this week! Enjoy the rest of your week and keep looking for ways to increase your certainty.
Talk soon,
Ruben