Making Better Decisions - A Pilot's Perspective.

Like most product managers, my route into the industry was unconventional. I started life as a commercial pilot, and a significant portion of my training was aimed at better understanding how teams can work together to make safe and reliable decisions.

Surprisingly enough, building top-tier tech products isn’t that different, as a lot of the work you do is focused on the people and talent that you work with. Yes, the stakes aren’t as high - one bad decision as a pilot is quite literally the difference between life or death - but applying an equally rigorous approach to decision making when building your company could be the difference between ‘startup life’ and ‘startup death’.

And whilst avoiding the graveyard where 90% of startups lay to rest can often feel life-critical, hopefully your stress will be assuaged by understanding the power of making a good decision. Startup success, in its simplest form, is a series of good decisions. The great news is that it’s a skill that can be learnt!

Human Factors

Around 1487, Leonardo da Vinci created the Vitruvian Man. It’s one of his most iconic drawings (we even have a picture of it on the wall in the FP office) and it shows da Vinci’s quest to better understand the human form and how we interact with our environment. It's the basis for so many of the greatest products from the Eames chair to the iPhone. In each instance, the designers adopted a da Vinci like approach, scrutinising every aspect of the user's interaction with the product, and going to great lengths to understand the users needs, problems and desires.

This laser-like focus on the user has been adopted by startups and aviation alike. The aviation industry - following a large number of high profile aviation accidents in the 1960’s - pioneered much of the modern research in understanding how the psychological and physiological aspects of humans can affect the design of systems and products. This is known in the industry as 'Human Factors'. And as the below graph shows, aviation's tireless dedication to figuring out how to mitigate human error, is why to this day flying is the safest form of transport.

During my training, I studied countless accidents and the evidence is clear - we really suck at making good decisions. Over 75% of all aircraft accidents are a direct result of human error and poor decision making. There’s no data on what % of startup deaths are considered to be the direct result of poor decision making, but one could quite justifiably guess that it’s a high majority.

Tip: Retrospectives form an important part of understanding how and why things go wrong. If you’re not doing these on a regular basis, you're hampering your ability to grow and improve as a team. There is always room for improvement.

What's in a decision?

On average, we make up to 2,000 decisions a day. The goal of every decision you make is to figure out what is real and select the best course of action. In order to make a decision, there needs to be a choice, where a choice is the act of selecting between two or more options. Therefore, there's a subtle difference between deciding to do something and making a decision.

This dichotomy is explained beautifully in the book Thinking Fast and Slow where Kahneman explains that we have two key thought processes that he calls System 1 and System 2. System 1 is fast, instinctive, impulsive and provides us with more automatic responses. System 2 is a slower, more conscious, considered and deliberate thought process that requires a logical approach and effort to be exerted.

These two systems are constantly processing information but System 1 is the one in control. System 1 is what has kept us alive for all these years. It's why we run from lions and why we turn our head when we hear a loud noise. If System 1 believes it needs help it will hand over to System 2 to do some of the heavy lifting.

To give you an example it was System 1 that helped me make the decision to write an article on decision-making. I got excited about a recent post I made on LinkedIn, I have some knowledge on the subject matter and a previous topic was proving too hard to write. It was only when I sat down to write this blog that my System 1 checked out and had to hand over to System 2 to start trying to pull together something based on reason and logical thought. It’s certainly required a lot of effort!

Carl Jung posited that there are 4 psychological functions that dictate much of your personality - sensation, intuition, feeling and thinking. The Myers Briggs personality test is an extension of this, and whilst not deemed highly scientific, can provide useful insights into how different personalities affect the decisions they make. The best teams have individuals that are across the spectrum.

Tip: Sharing an agenda prior to a meeting will allow people with more sensing / feeling capabilities the time they need to process the problem at-hand. The result? A more thoughtful, productive and well-rounded meeting.

Why we make bad decisions

As humans, we're not very skilled at assessing the probability of different outcomes and it's a result of our inability to fully understand the risk involved with our decisions. For instance, part of the reason why people play the lottery or gamble is because we overestimate the frequency of very rare occurrences that have large upsides.

Making bad decisions is part and parcel of being human - arguably it's unavoidable. What is avoidable is blindly falling victim to cognitive bias, which are systematic errors in our thinking that more often than not are behind the majority of our sub-standard choices. Here are some that are most important for you to be aware of as a founder.

Confirmation Bias

Confirmation bias is the tendency to look for and favour information that confirms or strengthens your personal beliefs or hypotheses.

An example of this: The Iraq war and the perceived presence of Weapons of Mass Destruction is a prime example of confirmation bias gone wrong. Senior politicians 'saw' evidence of factories and delivery mechanisms when there were none.

Why is it important for founders? For founders, when you are very emotionally attached to your idea it's easy to fall into the trap of confirmation bias. It's important to balance the belief in your product and idea with the needs of the users. Of course, you should seek validation but you should also be actively looking for information that falsifies your hypothesis - it will enable you to spot holes before they become a real problem.

Tip: Reading the Mom Test will provide great insight into how you should be interviewing your customers. You're doing it wrong if you start a conversation with "I've got this great idea what do you think?

Groupthink

Groupthink is a psychological phenomenon in which the desire for uniformity or consensus results in often well-intentioned groups settling on a bad decision just to avoid conflict.

What is an example of this? The Challenger Disaster was an example of Groupthink gone wrong. The engineering team knew about faulty parts months before the launch but due to them not wanting the negative press at the time, didn't flag the problems.

Why is it important for founders? This is not carte blanche to get dictatorial on your team members. You want to reach decisions that are optimal for your business, and the best way to do this is by ensuring that all decisions are subject to a healthy dose of critical evaluation.

Tip: If you see people getting complacent you can almost guarantee that people aren't being as critical of their decisions as they should be and are therefore at risk of Groupthink. If people like this are making decisions, put yourselves in the shoes of a child and ask them the question "Why?

Stress and anxiety

The explanation of what stress is should need no introduction but the effect on decision making is rather unusual. In stressful situations, humans are actually more likely to focus on the upside of a decision rather than the down.

What is an example of this? The 2008 financial crisis and the RBS catastrophe was no doubt influenced by the stress of racking up debts of £24bn and ultimately needing a government bailout. This didn’t happen overnight and was the result of years of bad decision making. The compounding levels of stress will almost certainly have required RBS to take riskier and riskier decisions in order to extricate themselves from the situation.

Why is it important for founders? Experiencing stress as a founder is almost a given. In manageable quantities, it has been proven to actually improve performance. There is however a tipping point where stress starts to adversely affect people’s decisions. As a founder understanding where this point is, not only in yourself but also in the teams around you, is critical if you want to stay on the right track.

Tip: There are many ways of handling stress. Some people meditate, some exercise. I have found that puppy gifs are what do it for me.

Inexperience, overconfidence, anchoring, and more...

There are many, many other reasons that can lead to poor decision making. I’ve listed a few more below should you care to explore this topic further.

Some personal biases I fell victim to:

• Making decisions without understanding the time frame you have will lead to bad decisions. It's why I have spent many long evenings writing this article!
• Being my first long-form content piece it’s not surprising that I didn't appreciate the time required as I lack the necessary experience needed to make robust decisions.
• Having two small children mean that I am sleep deprived and as a result, took the riskier option in agreeing to write this article.
• Being in denial about my situation will probably be the final nail in the coffin.

A few others:

• Overconfidence is another example of our inability to assess the probability of a problem occurring.
• Anchoring a decision based on an initial value or thought can lead you down the wrong path.
• The Halo Effect describes how first impressions are so important and how we make decisions based on very small amounts of data.
• To make better decisions and be more creative cut out the coffee.
  

A framework for making decisions

With so many cognitive biases to navigate, you are probably thinking "How on earth am I ever going to be able to make a decision let alone make better decisions without it all going belly up?" Fortunately, aviation and systems theory provides a great framework called DODAR to help you make these decisions.

What makes the DODAR framework so powerful is that it’s a closed-loop system, meaning that there is an in-built feedback loop. (As opposed to an open-loop system where the output has no influence on the input). You have the ability to change the decisions you make based on their outcomes, thus constantly re-evaluating and checking you’re on the right path.

Diagnose

"If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions." Albert Einstein

The output of this stage: A clearly defined problem with expected outcomes.

Practically speaking: It’s very easy to start with solutions. Don’t do that. You should always try to define the problem as clearly as possible. Spend time here and don’t rush it. User stories are great examples of 'problem statements' that help you clearly articulate who the user is, what their needs are and what their expectations are. The structure of a user story might be: 'As (some type of user) I want to (goal for users), so that I can (some reason)'.

Options

The output of this stage: A list of options that can be completed in the time available.

Practically speaking: It might be very clear what the best course of action is, however going through an ideation process will always be a useful exercise to explore the edges of the problem. In my mind, this is the most fun part of the process. It’s time to explore ideas and possibilities. When brainstorming, it’s important not to shut down any ideas.

Decide

The output of this stage: A decision on a course of action for the team.

Practically speaking: There are a number of frameworks that help with prioritising which decision to make - ICE (Impact, Confidence, Ease) being the most obvious. However, don't feel obliged to strictly follow these frameworks as quite often there’s an important consideration that should be included given the nature of your business, i.e. how much the decision will delight the user.

It's also important to note that who makes the decision is as important as the decision itself. Whilst a flat hierarchy is nice in principle, someone needs to make the final call. The RACI framework helps with setting this up properly.

Action

The output of this stage: The steps required to action the decision and monitoring that work.

Practically speaking: It’s very rare that your plan will go according to plan. Change is the only constant, so you should expect this. Its how you handle that change that's important. Daily stand-ups with your team members will ensure you all have visibility over progress. This immediate feedback cycle is critical if you want to keep things on track.

Review

The output of this stage: A critical assessment of the whole process.

Practically speaking: This is the step that will close the loop. Reviewing the progress of any project is critical for successfully revising the inputs of the process going forward. This is where 'retrospectives' come into play - an agile tactic that occurs at the end of a tech sprint or when a known failure has occurred. Not only are retro's a great way to get to the root cause of a problem, but it gives everyone in the team a platform to voice any blockers or frustrations.

The only truly bad decision?

The only truly bad decision that you could make is not having a proper decision-making process. Startups are dynamic, quickly-changing beasts, and it’s an indisputable fact that you will make multiple wrong decisions as you grow your company. What’s important is that you:

A) Have an awareness of how different personalities in your team approach decision making, and ensure your processes are inclusive,

B) Understand how cognitive biases such as Groupthink can kill good decision making, and

C) Adopt a closed-loop system that allows for and promotes regular and candid feedback.

Without these three things, you will always be on the back foot.

There is a concept called the Swiss cheese model where each slice of cheese is a barrier to stopping an error from occurring. Nothing is foolproof and like Swiss cheese, there are holes in these barriers. It's only when these holes align that an error will occur. Thus, the DODAR framework is just one slice of cheese and should be one of many tools that you implement to help you stop errors from occurring.

To re-iterate, if you only take away one thing from this article it’s that the only objectively bad decision you can make is not having a way to detect and mitigate errors in your decision-making process when things go wrong.

‍