Sorry for the link bait title. It was either this or “27 ideas on how to make better decisions,” and I've developed a spam filter in my brain that filters out titles with numbers in them.
Ok, let's go on topic.
A while ago I wrote about well-considered decisions. I argued documenting decisions in a somewhat structured way is a great way to create trust and document the rationale behind things. Later I wrote about Amazon’s culture of writing narrative memos to make decisions. Then, I wrote about the No More Feedback book which argues it's better to rely on self reflection than on outside feedback.
Recently I've been thinking about how to leverage these ideas to improve how we make decisions in companies. Here's a couple of things I'd like to achieve:
- Ensure decisions are well-considered. That is: they're well thought-through and not random, ad-hoc or YOLO.
- Decisions are transparent. That is: they are documented, so we understand what problem there was to solve, what was the decision on how to solve it, who made it and why.
- Decisions are made as close to the action as possible. At every step up in the organizational hierarchy, knowledge and context about the problem and its potential solutions is lost, and decisions get worse.
- The decision maker can self-evaluate his or her decision to an as large degree as possible. This reduces the need for outside feedback, which we now all know is toxic.
- Even if you're not used to being empowered to make decisions, you're guided to do this well on your own without much support.
Amazon’s format is very much in character by making it customer-obsessed (hence the press release format). Here's the Amazon outline for such press releases:
- Heading: Name the product in a way the reader (i.e. your target customers) will understand.
- Sub-Heading: Describe who the market for the product is and what benefit they get. One sentence only underneath the title.
- Summary: Give a summary of the product and the benefit. Assume the reader will not read anything else so make this paragraph good.
- Problem: Describe the problem your product solves.
- Solution: Describe how your product elegantly solves the problem.
- Quote from You: A quote from a spokesperson in your company.
- How to Get Started: Describe how easy it is to get started.
- Customer Quote: Provide a quote from a hypothetical customer that describes how they experienced the benefit.
- Closing and Call to Action: Wrap it up and give pointers where the reader should go next.
P&G's format has some similarities:
- Statement of Purpose: An introductory sentence that concisely and succinctly states the reason for the recommendation. Provides a context for the memo as a whole.
- Background: Factual analysis that connects the purpose of the memo to the strategic objectives of the company or the brand. Also provides facts in relation to the problem the recommendation is supposed to address.
- Recommendation: The specific proposal on how to solve the problem or exploit the opportunity detailed in the background section.
- Rationale: The reasons for the recommendation, and the logic by which the recommendation was reached.
- Discussion: Details of the recommendation, anticipated questions or areas of concern, risk assessment, identification of other alternatives, details of the recommendation.
- Next Steps: Who will be following through on the recommendation, what target dates they would be working towards, what actions they would be taking to execute the recommendation.
In OLX internally we've been experimenting with a similar format based on P&G's, expanded a bit. Whenever we come up with some new organizational initiative, like setting up some new role, some new team, some new big meeting — we write a pitch for it. So far, we've not widely shared these, as this is still in an experimental phase.
Here's our (current) version of the pitch format (I'm cheating a bit, in fact this is slightly more elaborate than what we've been using):
- Background: What is the context in which a decision is required, and what is the problem to be solved.
- Why now? There's opportunity cost in even thinking about making a decision, why is this something to be decided and acted on right now?
- Proposal: Succinct description of the proposed solution.
- Rationale: What is the rationale behind this proposal for a solution, why is it a good idea?
- What success looks like: How will we know if this proposal, once implemented, was successful?
- Alternatives considered: What would be alternatives to the proposal, and why are these worse options than the main proposal?
- Frequently asked questions: Imagine what people will ask about this proposal, and how you would answer them.
- Next steps: What are the next steps to make this proposal move forward?
In addition, we aim for such a pitch to be between 1-3 pages. This is because some of us tend to be quite elaborate in our writing 😇. Brevity and to-the-pointness is paramount.
When the author is happy with a draft, or somehow gets stuck writing it, we share these pitches between each other for input.
Here's a few things we found after doing a couple of these:
- The need to pitch an idea with this structure killed many ideas early, even without having to bother other people with it. Simply the act of properly thinking through some ideas made it clear they were just... bad.
- Forcing ourselves to think about alternatives sometimes made us pivot to actually use the alternative, instead of the original idea. Writing a pitch takes a lot of time. Not the act of writing, but the actual reflection and thinking required to make it good (also see the Bezos quote a bit later).
- Once the pitch is solid, actually deciding on the go or no-go becomes almost trivial.
- Actually creating the urgency for people to read the pitches and to comment on them remains a challenge. Although the length limit helps somewhat.
Here's what Jeff Bezos has said about Amazon’s six-page memos:
Often, when a memo isn’t great, it’s not the writer’s inability to recognize the high standard, but instead a wrong expectation on scope: they mistakenly believe a high-standards, six-page memo can be written in one or two days or even a few hours, when really it might take a week or more! They’re trying to perfect a handstand in just two weeks, and we’re not coaching them right. The great memos are written and re-written, shared with colleagues who are asked to improve the work, set aside for a couple of days, and then edited again with a fresh mind. They simply can’t be done in a day or two. The key point here is that you can improve results through the simple act of teaching scope – that a great memo probably should take a week or more.
This is consistent with what we found as well: making good decisions is hard work, but on the other hand: it should be. Especially if they're high-impact decisions.
Given this experience, here's an exercise I'd be very interested in doing: I'll call it ”The great decision purge“: write pitches for all existing organizational initiatives from the past, and when failing to do so successfully — ditch the initiative.
My gut feel is that this would simplify our organizations a lot. Organizational debt is a thing after all. Unless I just coined that term unknowingly (you're welcome). We all have stuff happening in our companies we just do because we've always done it. Sometimes nobody really knows why. The decision purge is a way to reset, and the pitch format described way to avoid such cruft in the future.
And a nice side-effect is you'd end up with excellent documentation on why things are set up they way they are.