We often talk about how to make better decisions – and I must say this is a topic I’m really fond of. In my newsletters, I often share systems and techniques to apply at the individual or team level to improve our decisions and, down the line, our performance.
And we usually all end up with the same question: how do we evaluate our decisions?
This is a pragmatic and valuable question as we want to know if we are making more good decisions than bad ones and if we are developing our decision-making capabilities overall.
But an aspect that is frequently overlooked is when we should evaluate our decisions.
Bill Gross is the founder of Idealab, a startup incubator with an incredible success rate. In a 2015 Ted Talk, he shared the five criteria his colleagues and he used to evaluate the potential of startups. They look at the idea, the business model, the funding, the timing and the team. Over the years, they were able to find which criterion was the most crucial for a new company to succeed.
In your mind, which one would it be: idea, business model, funding, timing or team?
It turns out that timing is the best predictor of success. Gross gives the example of Airbnb to underline Idealab’s finding.
Many companies had the same idea and the ability to execute but entered the market “too soon”. The public was not ready yet to rent part of their home or go to a stranger place rather than a hotel, so these first-to-market companies went bankrupt.
However, with the 2008 financial crisis and the mass layoffs, people started looking for ways to generate additional income, and Airbnb was there to seize the opportunity.
Timing is not only crucial for startups, it is also the case for decisions. For when to make them and also when to review them.
So, what is the best time to analyse the outcomes of our decisions?
We are in the adamancy zone when we don’t review our decisions, ignore red flags, and maintain our course with stubbornness. Obviously, if the decision delivers outstanding outcomes, we don’t need to spend time and effort there, but our return on investment is often not straightforward.
For instance, a product released more than 18 months ago is getting some sales but doesn’t match its projections. With extensive customer feedback in the first year, it was possible to review our choices earlier, decide whether to maintain things as they were or not and not waste another six months.
On the other hand, we have the ambiguity zone. We don’t know enough yet to be able to judge our decisions. But, rather than parking them on the side and letting things unfold to their conclusions, people tend to doubt and almost regret their recent choices immediately.
They constantly ruminate and wonder if they should revert their decisions. And whether or not they do so, this monopolises most of their mental bandwidth and depletes their energy.
So when is the right time to review our decisions? Not too early or too late? How do we find the magic moment?
This complex question doesn’t come up with a simple answer. However, one of the elements that often resonates during my workshops is the decision journal. One of the many uses it has is to help us find the magic moment to review each of our decisions.
As you are about to make your decision, write down when you are expecting to see significant results. Indeed, this is not a specific date but a range, like would it be in a week, a month, six months, or more?
Then, write down the reasons that lead you to choose this range. If the review should roughly happen in one month, why is that? On what elements are you basing your estimate?
For example, if you decide to change your diet to lose weight, you might choose to review this only in three months. The reasons are that you are only slightly reducing your daily intake and not exercising more, so results would be slow.
If you review every day how much weight you lose, it will be mentally draining (and could also be quite depressing at first with the absence of results). But if everything remained the same after a year of sticking to your new diet, you probably waited too long and should have reviewed your decisions sooner.
So, in this case, the decision journal allows us to free our mind until the review period, helps us remember what we thought when we made the decisions (and avoid the selective memory bias) and learns from previous decisions to adjust our estimates.
I hope you enjoyed reading this newsletter. Don’t hesitate to answer and share your thoughts with me.
To your success,
Lison xX
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Want More?
- If you are about to make an important decision for yourself (or your team) – and want help to ensure maximum success, book a call with me to discuss this.
- With my first book Act Before You overThink to learn how to make better decisions faster and liberate your mind from the constant chatter that hinders your potential. You can buy it here.
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