I often hear a variant of this in meetings with business leaders, when discussing their employees or the actions of their direct reports: “Why don’t they use common sense?” As Abraham Lincoln supposedly noted, “God must have loved the common man because he made so many of them,” then, surely, most of the decisions involve common sense.

We all think that all it takes is common sense; however, we all decide based on the information we have and the guides we use to make those decisions. Thus, for people to make better decisions, we need to ensure that they:

  • Are solving the right problem.
  • Have all the available information.
  • Know the “Intent.”

 

Solving the Right Problem

The first person to state a problem rarely has the best insight into the issue. However, once a problem is defined, our problem-solving and “get it done” nature kicks in, and we dive straight in. We don’t stop to ask, “Are we solving the right problem?” As a result, many decisions made solve the stated problem, but not the right one.

To prevent solving the wrong problem, make sure of the following:

  • You defined the problem and not someone else.
  • You are close to the problem.
  • You are thinking about the problem from many levels and angles.

 

Have all the Available Information

Having all the available information is challenging; however, I look to two military people to guide me. First, David Marquet, whose great advice is, “Move the decision-making to the information.” This ties in with being close to the problem above. So, move the decisions to the front lines, where people with all the available information about the situation are. The second person is John Boyd and his OODA loops, which I have written about before. OODA means Observe, Orient, Decide, Act. I would say that having all the available information is a combination of Observe and Orient.

 

Observe

Here the purpose is to observe the situation to get the most accurate and comprehensive picture possible. Information alone is not sufficient; we need to take the data and put it into context. The real skill here is identifying what is “noise” and thus irrelevant for the current decision. Ensuring you can put all the information in the correct context requires asking questions to build a comprehensive picture.

At a simplistic level, this reminds me of two stories.

A little girl asked her mom where she came from. The mother responded with the full explanation of the birds and the bees. The little girl looked a little confused, so the mother asked why? “Well,” said the little girl, “Jill next door says she is from New York.”

A car stops next to someone walking down the street, and the driver asks for directions to the nearest interstate. The pedestrian responds with directions, and the driver goes off. However, the pedestrian should have asked, “Where do you want to go?” The interstate may not be the best solution or the quickest for where the driver wanted to go.

In both cases, questions upfront result in a better answer as they help understand the issue. However, we are programmed to answer, not to question!

 

Orient

Orientation is seeing the world as it is and removing the influences of cognitive biases and shortcuts. If you properly orient yourself, you can overcome disadvantages from less information or fewer resources. However, there are four barriers to the ability to orient effectively.

  1. Cultural traditions. Much of what we consider universal behavior is culturally prescribed.
  2. Genetic heritage. We all have certain constraints.
  3. Ability to analyze and synthesize. We fall back on old habits if we are faced with new types of thinking.
  4. The influx of new information. If the environment keeps changing, it is hard to determine what is going on.

To overcome these barriers, Boyd recommended “deductive destruction,” a process of understanding our biases and assumptions and developing mental models to replace them.

As Boyd put it, “Orientation isn’t a state you’re in; it’s a process. You are always orienting.”

 

Know the “Intent.”

You will notice that I didn’t say know the “Rules”, as I feel rules are too limiting. They tend to prescribe an exact situation, and if the situation changes, then a new rule is needed. Also, rules are easy to get around. Knowing the intent is a broader guide but makes it easier to understand.

A great example was GM when Mary Barra changed the corporate dress code. GM’s dress code was ten pages long, trying to cover everything. As a result, it was complex, and I doubt anyone read it. However, Mary Barra decided to change it to “Dress appropriately.” Before the change, someone would have to go through ten pages of rules to determine if an outfit met the code; now, they have to decide whether it meets the intent. Now Dress Appropriately on its own may have caused a few issues, but in discussions among teams to explain the purpose, it didn’t take long for everyone to understand what was required.

So, when I ask CEOs and business leaders, do they have organizational clarity, they respond, “Yes.” But when I ask the following:

  • What is your BHAG?
  • What is your passion?
  • What are your core values/expected behaviors?
  • Why do you exist?
  • What is your Strategy in a sentence?
  • What is your Brand Promise?
  • Who is your Core Customer?
  • How do you make money in a sentence?

Often, they cannot answer all these questions and think that many are trivial. Yet these are the “Intents” that provide organizational clarity. If you know the answers to all these questions, you know whether an action will support the organization or not.

However, the answers to the questions are the “Intent” that helps your team know what is expected of them. If everyone knows the same answer to all these questions, then it is more likely that they will make a decision that falls within the “Intent” and meets your definition of common sense.

Returning to David Marquet, he emphasized that for people to make good decisions:

  • They need to have control, e.g., make the decision so they take ownership of the problem. If you retain the power and don’t give it, your team members will never make the decisions you want.
  • They need to be competent. Do you have the “right people in the right seats?” If you do, then they should be able to make the decisions. If not, then it is not their issue, but yours. You have the wrong people running things.
  • Organizational Clarity. Or stated as “Is it the right thing to do?” If your people know the above guides’ answers, they will know if the action supports the organization’s purpose and goals.

So next time you feel your team is not making “common sense” decisions, ask yourself:

  • Are they solving the right problem?
  • Do they have all the available information?
  • Do they know the “Intent,” and is there organizational clarity?

I think you will find that something in the above is missing.

However, a warning! This course is not easy; you are giving up control, and to make it work, you have to allow them to make different decisions. If you keep snatching power back, it will fail. 

Once you decide to go down this path, ensure that the “Intents” are answered, and everyone knows the answer. Good luck.

 

Copyright (c) 2021, Marc A. Borrelli

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Recent Posts

Do You Truly Know Your Core Customer?

Do You Truly Know Your Core Customer?

Knowing the profit of your core customers is key to building a growth model. Many companies have identified core customers that are generating a sub-optimal profit and so they cannot realize the profits they seek. Identifying the correct core customer allows you to generate profits and often operate in “Blue Ocean.”

The Greatest Own Goal or the Greatest Collapse

The Greatest Own Goal or the Greatest Collapse

The European Super League collapsed within days of launch due to hubris and the founder forgetting the key parts of their business model, value creation, sales, and value delivery. The collapse might bring a high price.

Does Your Financial Model Drive Growth?

Does Your Financial Model Drive Growth?

Working with many companies looking to grow, I am always surprised how many have not built a financial model that drives growth. I have mentioned before a financial model that drives growth? Here I am basing on Jim Collin's Profit/X, which he laid out in Good to...

COVID = Caught Inside

COVID = Caught Inside

As we emerge from COVID, the current employment environment makes me think of a surfing concept: “Being Caught Inside When a Big Set Comes Through.” Basically, the phrase refers to when you paddle like crazy to escape the crash of one wave, only to find that the next wave in the set is even bigger—and you’re exhausted. 2020 was the first wave, leaving us tired and low. But looking forward, there are major challenges looming on the horizon as business picks up in 2021. You are already asking a lot of your employees, who are working flat out and dealing with stress until you are able to hire more. But everyone is looking for employees right now, and hiring and retention for your organization is growing more difficult.

Do You Understand Your Costs to Ensure Profitability?

Do You Understand Your Costs to Ensure Profitability?

You can only determine profitability when you know your costs. I’ve discussed before that you should price according to value, not hours. However, you still need to know your costs to understand the minimum pricing and how it is performing. Do you consider each jobs’ profitability when you price new jobs? Do you know what you should be charging to ensure you hit your profit targets? These discussions about a company’s profitability, and what measure drives profit, are critical for your organization.

Sunk Costs Are Just That, Sunk!

Sunk Costs Are Just That, Sunk!

If you were starting your business today, what would you do differently? This thought-provoking question is a valuable exercise, especially when it brings up the idea of “sunk costs” and how they limit us. A sunk cost is a payment or investment that has already been made. Since it is unrecoverable no matter what, a sunk cost shouldn’t be factored into any future decisions. However, we’re all familiar with the sunk cost fallacy: behavior driven by a past expenditure that isn’t recoupable, regardless of future actions.

Do You REALLY Know Your Business Model?

Do You REALLY Know Your Business Model?

Bringing clarity to your organization is a common theme on The Disruption! blog. Defining your business model is a worthwhile exercise for any leadership team. But how do you even begin to bring clarity into your operations? If you’re looking for a place to start, Josh Kaufman’s “Five Parts of Every Business” offers an excellent framework. Kaufman defines five parts of every business model that all flow into the next, breaking it down into Value Creation, Marketing, Sales, Value Delivery, and Finance.

Ideation! Harder Than It Sounds

Ideation! Harder Than It Sounds

Bringing in new ideas, thoughts, understanding, and logic is key as your organization faces the challenges of a changing environment. But when you do an ideation session in your organization… how does it go? For so many organizations, many times, after a few ideas have been thrown out and rejected, the thought process slows down very quickly, and a form of hopelessness takes over. How does your organization have better ideation? I’ve come across a new approach with a few teams lately.