Faster Decision-making

Tough Things First

The opposite of paralysis by analysis is making a resolute decision in moments while others stew. But how do you get there? In this Tough Things First podcast, Ray Zinn discusses how famous business minds get right to it without hesitating.

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Rob Artigo: Well Ray, let’s talk if we could, a little bit about leadership and leaders in business at really any level, how we can make decisions faster. I have some examples here. I actually picked this up from a Forbes article that was the inspiration behind this podcast. So for reference, people can check out Forbes and look for, How Top Entrepreneurs Make Tough Decisions In 5 Minutes. So there’s a bunch of examples, and we just pulled a few of them out just to have a conversation about it.

Rob Artigo: There is something called the 10-10-10 rule, and this is where you project your situation into the future and you end up knowing what to do. So Amazon founder, Jeff Bezos, he swears by the 10-10-10 rule. So he says, “When you’re faced with a tough decision and a tough call,” he says, “what will I feel about this decision in 10 minutes, 10 months, and 10 years?” An approach, I guess to looking down the road and saying, evaluating using some expertise where this might go and that helps him make his decisions. What do you think of that process?

Ray Zinn: It’s a method. It’s a technique. You could go with a 5-5-5, five minutes, five months and five years, which is the one I use. The 10-year, 10-minute, 10-month, 10-year is I think a little long. So I go with the 5-5-5, 5 minutes, 5 months, 5 years. But they’re all basically the same. They say haste makes waste, look before you leap and all that sort of thing. So there’s look before you leap is haste makes waste, okay. If you leap too soon and then regret your leaping, you’re going to sustain some injury and haste makes waste. So if you can see how they both counter each other.

Rob Artigo: Next one is trust your gut. This is one that you’ve spoken about in the past, which is that if you go through this process and maybe you do your 5-5-5 that you were just talking about, and then you’re sort of on the fence still. And you go, “Okay.” Then you asking yourself, “How do I feel about this?” So Mark Cuban is a guy who trusts his gut. He calls a term that’s used around this as the two-minute magic that takes your five-minute first window to two minutes. If a decision takes less than two minutes, he can make it on the spot, which means that if you know that’s good, then you can do it without overthinking it. Is it possible to overthink a decision and get paralysis by analysis?

Ray Zinn: Sure. I mean there are downsides to every one of them. I mean the more data you have, the more it will help you with your decision. Obviously, less data you have will hamper your decision unless you’re lucky. They say that our decisions are right 50% of the time, which means we’re going to be wrong half the time. So in my experience, the best leaders are the ones who make decisions 70 to 80% correct, and 15 to 20% incorrect compared to the average, which is 50% correct. So that’s a difference between a good leader and a not so good leader is how good are the decisions when you look back upon them. As I said, a good leader should be right 70 to 80% of the time, you’re not going to be right 100% of the time, not possible, but you can be right more than 50%.

Rob Artigo: Sheryl Sandberg, who was one of Meta’s COO, founders obviously of Facebook, she talks about 70% and she calls it this 70% solution. So it’s like take a punt and see what happens is one of the lines in here, Sandberg doesn’t wait for perfect knowledge. She goes with a 70% rule, 70% of the information, and then if she feels sure about it with 70% of the information, that’s good enough to pull the trigger. Sounds like that pretty much goes along with what you were just saying.

Ray Zinn: Let’s ask ourselves the question, why are some people able to be 70% correct as opposed to the average being 50% correct? How is that? How do you get to that point where you’re 70% correct? That is where you have that knowledge. There’s no substitute for knowledge and experience. You need both of them. And so the more knowledge and more experience you have, the better you can make a decision. Shame of it is the people who have the most experience are older people like myself, we’re by nature, have more experience. I’ve got what, 60 years of experience in running companies, and yet I’m compared to somebody who’s running or had been only a CEO for a couple of years. You’d have to say, “Well, gosh, with the experience, you should be able to make better decisions.” So it’s hard to make a good decision if you haven’t had to make one.

The more opportunities you have to make a decision, the better you are at making correct decisions. So it just takes time and experience. You want to give yourself the opportunity to make a decision. If you never have to make a decision, then you’re never going to be wrong because you never had to make a choice. So what you want to do is with your experience, just make better decisions. If you’re my age and you’re making 50% bad decisions, you haven’t learned much because you can flip a coin and make a decision. Flip, okay heads this way, tails that way. What you want to do if we’re speaking to people of all ages on this podcast, is you want to take opportunities to make decisions, find ways to make a decision. If you don’t have to make a decision, that’s bad. You want decisions, you want the ability to solve a problem, take the opportunity to make decisions.

I did that, which proved very, very, very useful for me over my 60-something years of running companies, is I’ve just forced myself to make a decision and then learn from that decision. As they say, “If you make a mistake and then keep repeating that mistake, think you’re going to get a different outcome, that’s insanity. If you learn from your mistakes, then you will grow. You’ll become better at it. You’ll know what information to go and grab.” So the people who are making good decisions, I should say 70% good decisions, they are utilizing the experience of themselves and utilizing the experience of others. They learn from others, they learn from themselves and they grow from that. They don’t keep repeating the same mistake over and over.

Rob Artigo: And it sounds like that also, this last piece of the advice that comes from this article from Forbes says, “Decide to decide.” You’re making a commitment to make the decision, which helps you focus on it. Is that fairly true?

Ray Zinn: Oh, yeah. If you don’t decide to decide, you never decide.

Rob Artigo: Right. You decide not to decide.

Ray Zinn: Right? So what I do is I make a decision before I have to make a decision. So I decide before I have to decide. Now, I know that sounds strange, but that’s what I do. I decide before I need to decide. So in other words, I’ve already said in my mind, “If this circumstance comes up, here’s what I’m going to do. If we get a certain loss in a revenue, then I’ve already made the decision how I’m going to handle that.” If I have to cut back my expenses, the first thing I’m going to do, and this is before I have to make it, is I’m going to see if we can go with a shortened workweek. In other words, shortened, people work less hours. Then if that doesn’t work, then what I do is I said, “Okay, I’m going to cut back salaries.” In other words, we’re going to take a temporary pay cut.

And then my last decision is going to be layoffs. That’s the last thing. I’m going to do all the others first before I do the layoffs because I want my employees to feel comfortable. I want them to know that they have a job that’s more important than a layoff. So you want to have either a shortened workweek, or in fact, people prefer a shortened workweek over or a pay cut. The second thing, of course, they’d rather have a pay cut than a layoff, and then the last thing, they want is a layoff. So that’s the way I decide before I’d have to decide. Does that make sense?

Rob Artigo: Our listeners can reach out to you, Ray, with their questions at toughthingsfirst.com. Conversation is ongoing. We have podcasts there, blogs and links to information about Ray’s books, Tough Things First, and the Zen of Zinn series, 1, 2, and 3, and the upcoming book by Ray Zinn. Thanks, Ray.

Ray Zinn: Thank you.