Episode #87:
Live mentoring session #1

Decision making frameworks

Some of the best things in life happen purely by accident. Remember that impromptu party that turned out to be one of the best nights of your life? Well that’s how this episode came about.

I was conducting a mentoring session via Zoom with an incredible young leader, coincidentally named Emma. When we came to a discussion on decision making models and frameworks, I asked Emma to “press record” so that she could replay it later (I wanted to move through the concepts fairly quickly).

What eventuated was a conversation about the things that make a real difference to the quality of your decisions (but the decision making models they teach in business school don’t cover). Emma has kindly allowed me to share this with the No Bullsh!t Leadership audience.

If you want to get to the practical stuff that will really change the way you think about decision making, this episode is for you.

What did you think?

Should we do more of these live mentoring sessions?

Episode #87 transcript

Hey there, and welcome to Episode #87 of the No Bullsh!t Leadership podcast. This week's episode, "Live Mentoring Session #1: Decision Making Frameworks". We're piloting a slightly different format for today's podcast, so Emma and I are really keen to hear whether or not you found it useful. The concept is to take excerpts from some of the live mentoring sessions I undertake with a range of leaders from different industries and different organisations, so that I can answer their questions and hone in on some of the quite specific techniques that they might use.

One of the executives I'm currently mentoring who coincidentally is also named Emma, is a senior leader in an ASX 50 listed resources company and she's also completing her executive MBA at the moment. Emma kindly allowed me to record our last executive advisor session on decision making and this episode captures some of the key moments from that meeting. Given the current constraints in meeting face-to-face, we did this one over Zoom, so don't worry, the sound quality may be a little lower than our normal studio production, but I think we more than make up for that with the quality of Emma's questions, and the way between us, we managed to bring out some of the subtleties of excellence in decision making. We cover off on a bunch of techniques to improve your decision making process, including balancing accountability and collaboration, knowing which data is valuable and more importantly, how to know when you have enough data to move forward. We also drill down on one of the biggest failures of decision makers generally, and that's what happens when you choose to avoid or procrastinate on your decisions? So thanks first and foremost to Emma who is just an absolute delight to work with, for allowing us to share this piece with our No Bullsh!t Leadership audience. Over to you, Emma.

Emma:
So, I don't know if you want to talk about a specific decision you had to make or if you want to talk a bit more generally, but what I'm really curious to understand is that combination of how much data you use, and then how many options that you actually consider as solutions and whether you're a one option guy and you get all the data you need and just do one option, or if you're actually more like “I only need 80% of the data and I'm going to have multiple options and I'm going to be kind of flexible, through that process.” So I'm kind of keen to explore, is there one big decision you want to kind of talk through in that context? Or have you got a philosophy or a way you say, "In this context, I think about it like this or in this context I think about it like this?"

Marty:
Yeah. The answer to that last question is no. It's exactly the same process regardless of context, except that of course the amount of time and energy and governance you put around it depends on the criticality of the decision and how big an impact that has, its materiality. But I want to step back a little bit because I want to run through quickly. I have, as one of my seven pillars of high performance leadership - which will turn up in both the book and in the online programme - is about making great decisions. And so I actually pull this apart from a, I don't go into models, but I do go very strongly into how to actually improve the decision making process. Now, the number, the number one thing is that - and you won't find this in any of your models - number one thing is the decision has to be made by the right person.

One of the problems that we have most frequently is that the decision making rights aren't clearly assigned. And so you're not, you're not 100% sure who gets the rights to make the decision, and therefore, who's making the call on, consultation, involvement, how much data is enough data, etc. So that's the very, very first thing. And I've got as part of that module, I've got a list of what makes a great decision. What are the things that make a great decision at the end of the day? So the number one thing about a great decision is it has got to be made at the right level, by the accountable person. So you've got to be pushing decisions down to the lowest sensible point in the organisation where they're closest to the action. Not so far that they haven't got perspective or that it's about their pay grade, but many decisions, that should be made at lower levels are made too high in the organisation. That's the first thing, so get the accountability structures right first.

Now in terms of empowerment and empowering the accountable person, they have to have the decision rights unfettered. You can't tread across their decision rights from above. So you can't be telling them what to do or suggesting they take a certain course of action or whatever else, because then you dilute their accountability and that changes the whole execution model. Very, very important. That's why you don't find that stuff in decision making models. They, they make assumptions about that, or they don't understand that that's one of the biggest things that hobbles your decisions. Second thing is speed over accuracy every day and twice on Sundays. Always speed over accuracy. The most common thing that I see that sub optimises decisions is that they are too slow and you reach the point of diminishing returns much faster than you might imagine when it comes to decision making.

So, I've got a whole decision making process for tracking your decisions. When did this decision hit my desk? How long have I had it for? What am I waiting for before I that decision? How am I gathering data? What data am I waiting for? Will that data ever turn up? What's the downside if I move quickly? What's the worst that can happen? Like what's the bottom end downside if I move fast? Cause I'm in the camp of make decisions quickly, adjust as you go. Everything. Even if it's a big decision, a really, really big decision. You just need a bit more governance around it and you need to be a little bit more careful. But you can still do that quickly. Who you bring into the decision once again is key.

And most organisations that I've been in at least tend to over collaborate, and they get too many people in the decision making frame who don't add enough value. Everyone wants to have a say, right? And the thing about decisions as I like to say everyone, everyone gets their say, not everyone gets their way. So you've got that real clarity of who's making the decision. They've got to be able to do that quickly. But what you find is particularly terrible in engineering industries, where you'll have, I don't know, 15 people in a room. 14 people think that something's a good idea. Number 15 just happens to be an opinion leader who's very, very experienced and well respected. And they say, no, I don't think that's right. And all of a sudden they've exercised a de facto power of veto over the decision maker.

So you end up with this nasty little thing that I like to call ‘management by consensus’, or decision making by consensus, management by committee. Lots and lots of meetings, not necessarily the outcomes you want. And everyone is afraid of making mistakes in decisions. And that's a cultural thing as well, but they tend to procrastinate and prolong their decisions because they're afraid of being wrong. And when they do make a decision they like to have buy-in from above. Do you think this is the right decision, Marty? Well hang on, this is your call. It's your accountability. Make the call. And you know, occasionally it'll be a case of, look, I think about this aspect as well, which you may not have thought about yet, but you know, really like keep moving. Make a call. Like you're closer to it than I am. I can't, I can't second guess what you're doing cause you're the one who's been in the process.

So strong consultation quickly, without letting that degenerate into decision making by consensus because that's the biggest danger of that. Speed over accuracy. Decisions made in the right place for the right reasons. And then making sure that you consider all of the data that you have available to you without being unrealistic enough to think that you're going to get perfect data, because it will never happen. So the point of diminishing returns comes really fast. One of the most difficult things to increase the quality of decisions is to get people to express their viewpoints and debate them in a robust way. Because people don't like doing that. And because of the natural conflict aversion that most people have, they're not going to want to step into a space of conflict. And so it's very difficult that you'll get to get everyone's genuine opinions on the table and debate it properly.

So the biggest thing to increase the quality of decisions, apart from the data, is to actually get people to participate. And as you were saying earlier, it's more difficult with the technology, over Zoom as it as it is to having people in the room where they'll have much more of a free flowing conversation. But yeah, so, and this is, this is my big thing on diversity, right? Diversity is fun and interesting, and there are a lot of really good moral reasons why we need to push for more diversity everywhere. But as they talk about the value to business, well, the value to business is only valuable if you can liberate that diversity. So in other words, if you can lead people to actually get them to bring forward those different perspectives and experiences and world-views and filters, because that's what makes a better decision when you wrestle with those differences.

Emma:
So you kind of think about it in that timeframe, right? You get presented with a problem or a choice, right? So you've gone through your process, you've got a choice to make, you just make it as soon as you can. Your bias is to absolutely make that call as soon as possible?

Marty:
Yeah, I've got a bias to action for sure. One of the things that makes decision making a hell of a lot easier, too, is to work out, what is actually a germane point to consider and what's just noise. Cause there's going to be a lot of noise in your decisions that you can just skip out straight away. And once you narrow the field and you say, "Well okay, that's this bit over here that we're talking about, that's fun and interesting, but that's a lower-order consideration for us. Here's the two or three big things that are gonna make the difference in this decision as to where we go, and you know, what the outcome is. These fifty things here, forget about them. They're fun and interesting to talk about. But let's save that for a bottle of red because you know, ultimately that's not the thing that's going to make the decision good, bad or indifferent.

Marty:
And a lot of people spend too much time throwing stuff onto the table to talk about, or factor into a decision, which makes it too complex, because decisions shouldn't be that complex normally. It's good to look at a problem from every angle, but it's also very important to realise the relative importance of the different factors that you consider. And once again, in my experience, people will put an increased weight on immaterial factors if it's their hobby horse or if it's their perspective or whatever else. So you've got to, in the decision making process, always be filtering based on the importance of the inputs. Not all data is the same data, right?

Emma:
And so you'd always say, "Okay, well what are the top three things that we actually care about here?"

Marty:
Two or four, but these aren't going to be a handful of things.

Emma:
Yeah. Okay. So you're already trying to winnow down what, what that is too. And so it might be, impact to the bottom line. It might be effect on safety, it might be impact on people or something. And so then you go, okay, what are those three things, and let's not worry about the rest. So how do we make the decision to balance those factors?

Marty:
Absolutely. And they'll change depending on what the decision is. Right? So here's a good example. Making decision about whether or not to compensate a landholder for their perceived devaluation of their property since you built an asset next to them. And in that you're considering a completely different set of set of things. So yes, there's going to be the financial impact of the settlement, but then you're looking at things like what precedent are we setting? What is impact on my brand equity? What's the political regulatory risk? Does it risk our licence to operate, you know, etc. etc. So you're looking at a different set of things depending on what the problem is.

Emma:
Yeah, absolutely. Yeah. I've had plenty of those types of problems, they're never easy.

Marty:
Absolutely. It takes a lot of intellectual horsepower to be able to do this on the fly. It just does. And weighing up the relative merits of different things. A classic example, you know, the investment business cases I used to see at CS Energy. When I first went in there, because these were being written by engineers, they were focused on engineering things. And they do a 70 page investment case for an overhaul of one of the units. And it would come to me and I'd go, okay, well here's 70 pages of stuff, which is nice, but it doesn't actually address the three questions I want to answer before I make a decision on the investment. It doesn't address this, doesn't address this, doesn't address this. So until you can actually address those things, I can't make a decision. So you haven't given me the things I need to make a decision on this request. And that's an interesting thing because then you're telling people that the thing that they've used all their lives to justify expenditure, which is volumes of engineering analysis, has no bearing on a commercial decision that I want to make about what the right level of investment is into an asset.

Emma:
Yup. Yeah, it's really interesting. So was there any decision then that you made where these principles didn't serve you well or there was some aspect to that that you wish you'd done a bit differently? Or have you found that these are the tried and true principles that you've found to work every time?

Marty:
I think I’d describe it slightly differently that Emma, this now is the end of my, of my learning to date. Where I've sort of distilled it and said, "This is what works." And in getting to there, it's seeing all of the things that haven't worked in different decision making processes where I've gone, yeah, okay, I need to do that differently. Or I got blindsided here, or this was, you know, I should've paid more attention to that. And this is, this is the having gone through that, you know, we talk about the simplicity on the other side of complexity. Having gone through all of that learning in so many different contexts and situations, I've worked out how important speed is.

Like, you know, five years ago I might not have said, you know, speed over accuracy every day and twice on Sundays. But now I say that confidently because I've seen the varying implications of slow decisions, fast decisions, medium decisions. You know, what happens when people procrastinate. The higher up you get into an organisation, the more delayed decision impacts the whole business. Because if I'm the CEO and I procrastinate on a core decision, then all of these subordinate decisions at different layers in the organisation can't be made. Well, I can't decide this because I don't know that. And so that's how you've got this multiplier effect the higher up you get. So as I got higher and higher up, I realised how debilitating slow decision making is.

Emma:
Yeah. It's really interesting because I think in some ways I have a bias to action, but in others I definitely deliberate. And I would say that there's definitely been, I can think of several circumstances where I've been guilty of holding people up below me because I haven't, for whatever reason, I've delayed making a decision. I think that's a really insightful point about the higher up you get, the more impact you have below you with, with slow decision making. I think what I see though, is that this is, like one of those models, it's less info but more than one plan and super flexible. So that is, let's say quadrant on this kind of Brousseau model and obviously you've got a whole bunch of other kind of considerations that kind of sit in that. But there is some, I can see a little bit of alignment. It seems like you've got what they call a flexible, in their model. This is a flexible decision making in that you don't need all the info, but when you get more information, you'll change paths and you'll be flexible in whatever that, or agile in whatever that kind of approach is. But there's obviously a whole bunch of other elements to your decision making process.

Marty:
Here's an extremely important but subtle point that is really worth you thinking about. When you talk about this moving with less information and being more flexible, or waiting for more information, so forth. That's all okay. But it presupposes that the information you're getting is of equal value. It's not. It's absolutely not. And, the trick to being a really good decision maker and the trick to being a really good leader, is to be able to improve the quality of information you've got to deal with. And so the model of be flexible, move quickly, use less data, that's extraordinarily dangerous if the quality of your data isn't good. And so part of the, one of the most important things is, is working to know how to make better quality data available.

As I said, that’s through liberating people's views, and their diverse perspectives by being able to elicit from them the safety and confidence to give you what they think and to, and to have the culture of, you know, no blame, no excuses where you can actually get people to come out and confidently debate something and not be afraid to put their view on the table to feel as though they're not safe to do. So that the subtlety here is you've gotta be able to run the lean model but with much higher quality information than anyone would normally get at their disposal because you are able to draw that stuff out from people and you are able to distinguish between the material data as opposed to the less material data. It's all about making those judgements. And that's the salary. That's what doesn't get captured in those models. Because it sort of treats it all as the same. The data's not the data in every quadrant.

Emma:
Yeah. Cool. Yeah, you're blowing my mind, Marty. It's awesome! I mean because I think about, obviously you make decisions all day, right? And I haven't actually spent a lot of time really thinking about my decision making process. Again, you know, I've said I'm quite an intuitive person, so I kind of intuit that the why I'm doing it is, is good or fine or whatever it is, whatever language I want to use before I've had my second coffee. But I love this idea of coming up with a bit of my own personal framework and how I think about this and how, how I can be more intentional about the way I make decisions and more aware of when I am not making a decision and why. Because I think if I think about it, I think the reason I don't make decisions is because I'm afraid of making the wrong decision. But I'm not acknowledging that fear. And if I was more open and aware of that, that fear and, and then kind of addressed that in whatever way, I don't think I'd be so in those circumstances so hamstrung.

Marty:
Oh, absolutely. And it's natural for all of us - even me - to rationalise that, so that it doesn't feel like fear, it feels like diligence.

Emma:
That's a really good insight.

Marty:
Yeah. "I'm not afraid of making a mistake. I'm just making sure I had good data."

Emma:
Yeah. Gold. Gold Marty, that's awesome.

Marty:
The awareness is everything, right?

Emma:
Yeah. So what I find really interesting is, how much more I am just becoming so aware of the fact that I am, like a lot of my behaviour is driven by fear. I would never, without having done this MBA, I just would be totally blind to that emotion. It doesn't dominate, but that really does have an impact on the way that I show up, on the way that I make decisions. It's like fear just runs through…(laughs)…anyway, it's a bit challenging to have that recognition. But I'm genuinely surprised how much that influences me and my decisions, just, the way I show up.

Marty:
Yeah. It's pretty much pretty much everyone. But you've got awareness now, and that's how you change.

Emma:
Yeah. And it's, it's amazing. It is. It is honestly like fear and shame and all those like, just core emotions. They sit at the base of everything once you kind of drill down into it. And the more that you can just be comfortable with those emotions or work out how to, well I guess it is, you just have to become comfortable with it but not operate in, you can operate in existence with them, but not operate, being driven by them, I guess is what I'm saying. Because you can, yeah. I don't think you can get rid of those emotions and I don't think you should, but how do you operate with them as opposed to being operated by them?

Marty:
Yeah, spot on. Spot on. Couldn't agree more.

Alright, so that brings us to the end of Episode #87 and once again, thanks very much to Emma. Now given the change up in format, please let us know if you'd like to hear some more of my live mentoring sessions.

Thanks again for joining us today. And remember, at Your CEO Mentor, our purpose is to improve the quality of leaders globally. So please take a few minutes to rate and review the podcast on your favourite podcast player as this is what enables us to reach even more leaders. I look forward to next week's episode: "Leading from the front." Until then, I know you'll take every opportunity you can to be a No Bullsh!t Leader.

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