Tag Archives: Decision making

The attitude needed to be a better forecaster…and innovator

SuperforecastingPeople who are good at forecasting, including innovators, are good at changing their minds; an uncommon attitude. Changing ones mind contradicts the conventional wisdom of relying on experts for right answers. Truthfully, experts have no place in predicting future events because when it comes to discovering and predicting the unknowns, experts are overrated.

How so?

Strategy that sticks

making strategy simpleHow do you talk about your business’s strategy so that your employees get it?

Any strategic planning session eventually needs to deliver a robust strategy, one that anyone can understand and execute. The truth is this rarely happens, as most strategic plans end up in a binder somewhere, and confuse more than enlighten people.

What business leaders want to avoid at all costs is confusion, which leads to inaction. So, how do we solve this challenge?

Consensus kills innovation

Is consensus and a democratic process always to best way toward innovation? Not really.

The topic of deciding what ideas to pursue comes often in discussion, it’s a very interesting topic because it directly influences the how of innovation. And the way innovative companies approach decisions that lead to innovation are varied, but one thing holds true in all of them: it fits with their point of view.

Innovative companies that have their own criteria of what ideas to pursue are clear about their decisions, therefore decision making is much more open; it’s a result of having a clear strategy.

In traditional businesses, on the other hand, when deciding on what ideas to pursue the default answer is to pursue the ones that might yield the highest profit at the lowest risk; MBA 101. Decisions based on that criteria are not conducive to innovation.

The problem with following convention is no one ever questions it; consensus-based decisions  are very much business as usual. Continuing the theme of deadly sins of innovation, a common trap most businesses fall into is death by consensus:

The “coming to consensus” trap appears when an organization seeks innovation but tries to build group consensus about which new ideas it should support. Consensus-based decision-making can lead to funding only the clearest, safest, or lowest-common-denominator ideas; truly radical projects may raise too many eyebrows to pass through a collective filter. Put simply, consensus can kill risk. Therefore, many innovation funders establish systems that trust the intuition of individuals, while building in feedback loops that can help refine their judgment over time

Innovative companies don’t worry about consensus because they understand that true game-changing ideas rarely are born out of consensus. It’s really that simple. In these organizations innovative leaders understand that the most creative people frequently swim against the current, they don’t vote them out of contribution; rather they unleash them.

Also, true innovators pursue their vision just because they believe it’s important; not because everyone agrees with them:

As an entrepreneur / intrapreneur inside large organizations, you have a great opportunity in front of you but you must understand that not everyone should like your idea, nor should you want them to; you have to push with full conviction. As the renown venture capitalist Andy Rachleff likes to say, the sweet spot for an innovator is to be right about a new opportunity before the rest of the world has reached a consensus.

That means making a decision without over analyzing and figuring things out as you go along.

For me, decision making is very easy because I just focus on what I’d like to see in the world. With that said, ask yourself: what do I want to see out in the world?

Go do that!

Do the decision-making processes at your company facilitate or debilitate innovation?

Bottom line: Disruption is not born out of consensus. If you’re making a big decision, you can’t wait for everyone to agree. To move projects forward, redefine consensus. The most innovative companies aim to develop the best possible idea. What that looks like is unique to their point of view and criteria; not what everyone else is doing.

True innovators don’t have a culture that aims to please the boss

for innovation safe is riskyHow many strategic plans look a little bit different from the year before? 99.9% do.

When I say “a little bit different” I mean tighter strategies with incremental goals and objectives and more of the same activities as the year before. Yes, we’ve all seen this before. What’s ridiculous is that you may begin a strategy session thinking differently, but most everyone defaults to safe because “that’s not what the boss expects” when the time comes to decide on a course of action; a lot of good ideas are not considered because of this.

This situation presents itself in most businesses, but the ones who are able to leap ahead have one thing in common: they are ruled by ideas, not hierarchy.

It isn’t business-as-usual to be ruled by ideas

Over the last few months of 2014 I was involved in facilitating a strategic plan for a government created mechanism in charge of coordinating entrepreneurial activities in the city of Tijuana. They brought me in because they wanted to shake things up!

There were many challenges, but the main thing was to be more ambitious. Unfortunately, it’s one thing to say “let’s rethink our approach” and another to actually go forward with it. Well, that’s exactly what happened after the strategy sessions.

The ideas that were presented in the strategic plan were cookie-cutter versions of what happens in other entrepreneurial ecosystems around the world, in this case they are localized to Tijuana. The sad thing about it is that the people in charge of this government mechanism, the boss, vetted all of the ideas; even though they were the same as the year before.

Why did this happen?

Because the group of people that came up with the strategic plan wanted to shake things up, but only just a little bit. The result was almost the same set of activities as the year before, with incremental goals and objectives.

Not the recipe for shaking things up…

The best idea wins

In innovative organizations, there is a unique understanding that to shake things up one has to STOP doing what leads to more of the same and START doing what will lead to new and different. So, if the decision making process in your business is to go through a suit (business as usual) that values safe bets that lead to more of the same; now you know what will counter that: letting the best idea win.

How do you do that?

Easy, ask yourself some business shaking questions:

  • If we make a list of all the projects we are working on, do any of those have the potential to change our business significantly over the next year?
  • What’s the boldest idea we should work on?

Best and bold are subjective terms, so it is best to first develop a criteria for what you want. The criteria I use to describe innovativeness is: new, surprising and radically useful. Secondly, come up with some ideas that fit the criteria you defined. And finally, define a timeframe to see some prototypes and let people try stuff and don’t judge them if their idea fails.

Employee freedom and responsibility go together

The main point is people need freedom, support and challenge to make innovation happen; not to think twice about expressing themselves freely because they fear getting punished. Put simply, if you are afraid to say what you really think in a meeting, you are not free. You are a corporate slave.

True innovators do away with corporate slavery. True innovators trust people to do the right thing, and that starts with defining culture and then hiring for specific values and behaviors. Hiring is hard, it’s the most important job for any business, and there isn’t a cookie-cutter recipe to follow, but if you focus on hiring for brilliance you can be certain that the best ideas will win; not the loudest voice in the room.

Bottom line: A culture that values playing it safe, is a culture that stagnates. A culture that thrives is one where people and ideas that challenge the status quo are valued.

How to think

We’re one week away from 2015, people will make their resolutions and try to keep them for a whole year; which usually doesn’t work out as planned. One resolution, an ongoing effort actually, that we should all aim for on a daily basis is that of making better decisions.

That means thinking better, which will have a cumulative effect in all else we do; including executing on our New Year resolutions.

A question I get asked often is something along the lines of , “How can I improve my ability to make better decisions?” To this, I respond with a counter question, “why do you think you make bad decisions in the first place?”

The reframing of the question, is good example of “what to do” to make better decisions. Thus, an easy way to make better decisions is to ask yourself questions, but that usually comes after you’ve done some grunt work to define a better question beforehand.

Stagnating? Innovate how you innovate with these 5 ideas

If a project has disruptive potential, it should make you uncomfortable.Throughout this past year, I’ve been having conversations with innovation leaders from a couple of BIG companies about re-inventing their innovation capability. The pattern of conversation: we’ve had a good run, but feel that our process for making innovation happen is delivering incremental results. Bureaucracy has developed, and so we aren’t taking a lot of risks anymore. How do we shake ourselves out of it?

This is a classic situation of the initial innovation enthusiasm becoming stagnant because innovation’s main killers are not kept at bay: GroupThink and ExpertThink.

One leads to consensus, and the other to unchallenged best practices. In combination both lead to stagnation. Later on, it will become more difficult to innovate because silence and fear will become the norm. Then you will really have a challenge in your hands!

As our decision making skills decline with age, how does it affect our ability to innovate?

As our decision making skills decline with age, how does it affect our ability to innovate?

Much like corporations become slow and stagnant, our own skills decline as we age; unless we do something about it. Nowhere is this more apparent than in decision making…