How to Make The Hardest Business Decisions
I’ve founded and led four organizations in the past 11 years. I’ve felt the magic of positive, aligned, powerful go-forward decisions, and I’ve also felt the pain of poor, misaligned, fear-focused decisions. I remember the day one strong, creative decision resulted in millions of new users for a product. And I remember the day one poor cost-saving decision resulted in losing a business that was scaling to success.
Both days, I was close to making a different decision that would have carried with it an entirely different result.
In all businesses–even those that may appear invincible today–there are moments in which the future of a business relies heavily on a single decision. Perhaps the business is in financial peril. Perhaps it’s a sell, no-sell decision. Perhaps there are major disagreements amongst the executive team. Whatever it is, someone–perhaps you–must make a really hard decision. And the line between a great decision and an awful one is so precariously thin.
As the stakes get enormously high, more regrettable decisions often get made. Whether the decisions are a result of pressure, innocence, or bad luck, years of hard work and the lives of employees can be held in the balance. But how do you make optimal decisions in those moments? Below are three strategies that have helped me make better decisions when the pressure is on:
1. Does your decision align with your business’ original vision?
Once upon a time, when things were a lot less hectic, you–and perhaps a few others–got involved with your current work because you believed in a vision.. You were going to [insert your important contribution to the world]. As the vision gave way to the realities of your business, perhaps it got clouded.
Now is the time to de-cloud your business’s vision and to dust off the reason you and others decided to go to work together. With your business’ vision in mind, look again at the major decision you must make, and at the go-forward options in front of you. Which option aligns best with your organization’s core, original vision?
The closer you get to the heart of your business, the more likely you are to make a strong decision. A business–like a person–has a reason for being. If you put a professional jockey on an NBA basketball court, he’s lost. Throw him on a horse, though, and he’s off to the races. Make sure your business is in the stadium it was built for.
2. Does your business vision (still) align with your personal vision?
A few years ago, when you were a bit younger, you believed in something. Perhaps you wanted to make the world a better place. Perhaps you wanted to make a billion dollars. Regardless, it was something. Then you add the opportunity to go build that thing. And as your business grew and matured, so did you.
Perhaps you and your business matured together. But often that isn’t the case. If there’s now a gap between what’s right for you and what’s right for your business, it’s important to notice and bridge the gap. Misalignment screws up decisions, and it won’t stop screwing up decisions until you either fix the misalignment–whatever it is—or take yourself out of the way. Misalignment usually doesn’t disappear without help.
In my own business, Avanoo, there was a time where we were straddling two worlds: we were building 3-minute-a-day video learning programs for consumers as well as businesses. My heart was with consumers, but 90% of our revenue was from businesses. The misalignment was killing a then 5-person team. So I had to step back, and understand how my own personal vision could be just as easily accomplished by serving businesses as by serving individual consumers. Once I did that personal work, I was able to let go of my desire to only serve consumers, and take our business where it needed to go.
3. Are you willing to live with the consequences of your decision?
This might seem like a rhetorical question, but it’s not. Most hard decisions are made because we’re either: a) running toward expected rewards, or b) running away from expected consequences. Strangely, humans often tend not to consider what happens if the rewards or consequences we expect don’t come to pass. An exaggerated example of this behavior is with addiction: Gambling addicts don’t want to go broke and alcoholics don’t want to lose their families… but the temporary high of the addictive behavior is more alluring than the medium and long-term consequences of the behavior.
Similarly, often the temporary allure of more money, for example, shines brighter than the consequences of working with that investor. Or the temporary allure of earning revenue from a side project shines brighter than the reality that the distraction will hurt the core business. Good business decisions happen when we understand and come to terms with the positive and negative possibilities of all scenarios, and we are still willing to move forward. Would you do it anyway if it turns out that you are wrong and it’s harder, messier than you imagined? If the answer is yes, you’re onto something.
I hope there are many more hard decisions in your future. I know, from experience, that it means you’re doing something right.
Daniel Jacobs is the founder and CEO of Avanoo, a company which creates online employee training videos.