Have you ever worked at a company where the CEO or some other executive changes the priorities every week? Where no one can get anything done because they are constantly switching gears?
Or maybe you’ve been stuck on a project that seems like it will never end because there are always “just a few more things” needed for it to really take off.
I certainly have and I’ll bet most of you have as well.
Why do seemingly smart people make (and repeat) bad decisions that waste time and money, suck the energy and enthusiasm out of their people, and ruin good ideas with poor execution? According to Decisive by Chip and Dan Heath and Thinking, Fast and Slow by Daniel Kahneman, all of us are vulnerable to a series of very human decision-making mistakes. Fortunately, there is some good data on ways to counteract these weaknesses and make the kind of gutsy, brilliant decisions that drive success.
I listened to both of these books recently on Audible (a great way to make use of otherwise wasted time in the car) and they’ve both resonated with and clarified my thinking about effective ways of making product management decisions. I recommend reading (or listening to) both books, but I find the WRAP decision-making framework from Decisive a very accessible way to remind myself of the right ways to make decisions when faced with them.
Here's how WRAP works:
W - Widen Your Options
According to the authors of Decisive, “Teenagers and executives often make ‘whether or not’ decisions,” overlooking a host of possibly superior alternatives. Should we acquire this company or not? Should we approve this project or not? Should we hire this person or not? The right question is more like: What is the best use of our available funds?
'Whether or not' decisions ignore opportunity cost. You can only do so many things, given limited finances and time. So step back, think about your overall goals and what things will get you there quickest. That one thing you were trying to decide on will be a much easier decision when compared with a lot of other things that will help you more or less with getting where you want to go. Try my prioritization methodology if you are stuck on a 'whether or not' decision.
R - Reality-test Your Assumptions
Testing your way to success is the heart of the Lean Startup movement. It works because it forces us to expose our assumptions to the disinfecting effects of real-world data. Many of us are guilty of doing some interviews where friendly people tell us what we want to hear and calling it “market research.” This phenomenon is called “confirmation bias” because we all have a tendency to pay more attention to information that confirms what we already think we know.
I became a much better product person overnight, years ago, when the survey data that suggested people were interested in my product in significant numbers turned into a response rate of less than 0.1% on launch. I vowed then and there never to believe customer or prospect intentions until they put some skin in the game.
Testing your ideas with small experiments is called “ooching” your way to a decision in Decisive, which is a more succinct (and more fun) term than “testing and iteration,” as the Lean-ophiles say. But the notion is the same. “Why predict when you can know?”
A - Attain Distance before Deciding
We all tend to make decisions with our heart and then look for reasons to justify our gut feelings. And sometimes we’re right, but in business, being wrong can be very costly. The prioritization methodology mentioned above helps you and your stakeholders look at decisions from the perspective of shared goals, but there was one story in Decisive that made me think about it differently.
One Navy ship captain created a “stop doing” list as a way to identify things that took a lot of time but added little value to their mission. On the list was repainting the hull when the bolts holding the ship together stained the surface with rust. Rather than repainting every month or two, he had the crew invest time (and money) in replacing every bolt with a stainless steel equivalent that would never rust. This allowed them to put off repainting for orders of magnitude more time, freeing up crew time to focus on things that contributed directly to their mission.
What was interesting for me about this story was that they decided to invest in the things product managers tend not to approve. Replacing parts that are still doing their job is very much like addressing technical debt, or re-platforming, or test automation. The initial investment does nothing to advance your goals, but the payoff is increased development velocity. Maybe that should be one of everyone’s core business goals.
P - Prepare to Be Wrong
Because we all (especially entrepreneurs, engineers and product people) tend to be overconfident in our decisions, we need help preparing for bad outcomes — or sometimes even acknowledging them. If you read Decisive, you’ll learn why David Lee Roth’s legendary meltdowns over brown M&Ms were actually a shrewd way of setting a “tripwire” to alert him to a potentially bad situation with the complicated wiring scheme required by their elaborate stage show.
As a product person and entrepreneur, I found the idea of tripwires intriguing as a way to avoid over-commitment. It’s easy to keep working at something “just a little longer” to see if it finally succeeds. Creating explicit success criteria — including milestones — can help you assess realistically if you are on track or spending good time and money after bad.
Good decisions are a key product power and we all need the right tools in our utility belt here. What are your favorite examples of really bad decisions (yours or others) that could have been avoided by employing one or more of these ideas?