As a business professional who has dedicated my career to identifying the behaviors that create intentional, repeatable results…or what I call Succeeding on Purpose, there is one area I see commonly connected with poor business results. That is in the area of decision strategy.
More specifically, this refers to the tendency of professionals to make decisions based upon current, unexpected results they encounter. On the other hand, those that consistently create intentional, repeatable successes expect occasional ‘losses’ and remain committed to their time-tested strategies and processes to guide their decision-making when a loss occurs.
Reams of materials have been written correlating successful companies with excellent decision-making processes, so no need to add to the contributions of legends like Jim Collins and Ram Charan. My aim is to provoke thinking around your own decision strategies and test how well they are working for you.
In Tony Hsieh’s book, Delivering Happiness: A Path to Profits, Passion and Purpose, he discusses how at one point he took up the game of poker and studied it intently to learn how to master the principles. Following is an excerpt from his learning experience:
“One of the most interesting things about playing poker was learning the discipline of not confusing the right decision with the individual outcome of any single hand, but that’s what a lot of poker players do. If they win a hand, they assume they made a right bet, and if they lose a hand, they often assume they made the wrong bet.”
One of the key points Tony drives at is that adjusting the bet based on an individual hand is a losing strategy because it is reactive. That type of short-term thinking often compromises longer-term results. Rather, it is better to be disciplined in making the right decision where the odds of winning are more favorable in the long run.
What does your decision strategy look like?
The principles that Tony articulated in his book are excellent, but as you may have perceived, if you don’t have the right decision strategy, then remaining disciplined to the wrong strategy and process can commit you to failure. That said, it is important to note that simply reacting to results is most typically the approach with the ‘poorest odds of winning.’
Not convinced? Consider it from this perspective – Imagine starting an exercise program. You know there are a myriad of exercises that can bring results, but you need to stick to the program in order to see results. If you simply use a mirror, which represents current circumstances and results, as the primary feedback of your results, you will likely react in the wrong ways based on what you see. That is simply because the mirror does not reflect the long-term results of what you are working towards. It merely reflects your present reality, and for many, they don’t like their present day reality. So they react to do something differently, thus disrupting any momentum that may have started to build.
How do I know if I have the right decision strategy?
As a basic litmus test to know if you have the right strategy, ask yourself this question…When I see things getting off track, how do I respond?
If your first response is to review your strategy for misalignment or derailment, that is an excellent sign. On the other hand, if you more typically find yourself reacting to circumstances or unexpected results (e.g., Missed a monthly sales goal, weak marketing campaign response rate, etc.), without orienting to your strategy to calibrate what you are seeing in your present reality, you may respond prematurely and even inappropriately.
For example, I recently saw an organization struggling to recover from sales declines in one of its areas by switching strategies to start offering aggressive discounts to bolster sales for the current month. The results? Cannibalization of future customers. Sales from future months were borrowed for the current month’s performance result. My understanding is that the organization has yet to recover from the short-term decisions made many months earlier.
How do you respond when unexpected results occur in your business? Are you betting based on winning or losing the individual hand, or are you betting on the process that delivers success in the long-term?