Decision Making and Problem Solving

by | Jan 10, 2024

Good decision-making and problem-solving are critical for success and are also some of the most challenging skills to master. In many cases, decision-making is not about always making the best decision, as things are not always so clear-cut. Most times, it’s about ensuring you have all the right information, the buy-in of the team, and a clear path for execution and feedback post-execution.

For founders and leaders, decision-making can be overwhelming. I remember the early days and how exhausting each day felt: What channel should I experiment with? Which candidate should I hire? Should I raise money? Which bug gets fixed first and what features are most critical to build next? What does this data mean? And on and on.

While every decision-making moment does not always fit neatly in a box, these five steps can help lead to better decision-making:

1. Gather relevant data and focus on building a data-driven culture.

Goal setting can feel haphazard and random when not driven by some objective data set. Your team needs to know why the decision to embark on a project or set of tasks was made for them to have complete buy-in.

A data-driven culture leads to clarity around goals and actions. It makes two things obvious to your team:

  • what you want to achieve and
  • why you want to achieve it. 

A key component of great decision-making is understanding the rationale behind the decision. If you and the team do not know “why,” you risk exacerbating the situation down the line as you execute your decisions. You and the team also risk making the wrong decisions for the wrong reasons.

2. Decide on inputs and outputs

In a data-driven culture, you must adequately deliberate on the correct inputs and outputs for effective decision-making.

For example, it’s far too common to aim to grow revenue with a random target, over some random period,  without ever rigorously looking at existing data. If you’re generating significant top-of-the-funnel traffic and a high conversion rate, but customers churn, your inputs may not be top-of-the-funnel data when it comes to decision-making to enhance revenue growth. In this case, you may have a leaky bucket, with a clear area of leakage that rigorous data collection and analysis can point you to. To figure out the correct input, you need to examine the usage data from your customers. Are you getting the right customers? Is onboarding the problem? What about support?

In the early days at TheraNest, it was apparent our product roadmap could get hijacked and sidetracked by the loudest voices among customers. So we decided to look at our product roadmap through a matrix that included the number of users affected and level of effort required. The goal was to help the team solve hard problems that affected the most people and avoid small problems that rarely affected a lot of people, even if those were the loudest voices. 

3. Use frameworks and your values to help make choices

When a team is small, or it’s just you making all the decisions, it’s easy to make the call. As your team grows and you have more stakeholders, making decisions needs to be clear and guided by frameworks and your company’s value system. You have to be clear on your core values and communicate them often and effectively to the team. 

One of the biggest lessons from my Therapy Brands experience was how much we needed a system for nurturing our core values and a unified framework for decision-making. We had great values at TheraNest and Therapy Brands. But we didn’t build enough rituals and frameworks around them to match our fast growth. New team members came in fast and furious, and leaders we hired from other cultures and organizations were not given a clear path towards adopting “our way.”

Coupled with your core values, frameworks like RACI or some other decision-making framework make the process transparent and adaptable across the organization. 

Also, empower people by differentiating between Type I (hard to reverse) and Type 2 (easy to reverse) decisions. Don’t be overly burdensome with the process around Type 2 decisions. Use your values as a quick guide.

4. Create a simple strategic plan.

Once you’ve decided on clear inputs and outputs and come to a decision, create a simple strategic and communication plan for you and the team. Capture the plan in a simple one-pager – it doesn’t have to be complicated; you just need to have one. Document your decision, the goals, inputs, and outputs, and set thoughtful deadlines. With this format, your strategic plan communicates where you plan to go, why you chose to go there, who is responsible for what, and how you plan to get there. Random slack chats and threads should not be the home for your strategic conversations. After we adopted Slack in the early days, everything lived in Slack. It quickly became apparent this was a problem for efficient team communication, decision-making, and execution ownership. New team members had to wade through long-gone conversations with tangents to get to the root of a matter. Observations and side conversations made decisions unclear. 

5. Practice continuous improvement and close the feedback loop.

It’s tempting to consider yourself “done” with the process of becoming a data-driven decision-maker. But the frameworks, communications, and strategic plan documents are just the beginning. Data collection is ultimately about continuous improvement. When you improve your inputs, do your outputs improve? If not, you may be tracking and improving the wrong input.  Revisit your decisions and why you made them. How can you do better? An effective feedback loop allows an evaluation of progress toward our goals and quick course correction at critical moments before going too far down the wrong path.

Data-driven decision-making is also a powerful tool to unify your team. Make the decision and goal-setting process a team-wide affair and use it to drive buy-in. Create a habit of revisiting your whys and discussing them as a team.

I hope you enjoyed this week’s Let’s Build post. As always, please let me know your thoughts by tweeting me @sotulana.


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