In The Hot Seat: High Stakes Decision Making In Tumultuous Times

Sarah Bird, CEO @ Moz
Main Stage
Ascent Conference 2020

[00:00:00] Hi, my name is Sarah Bird, I’m here to talk with you about being in the hot seat and making high stakes decisions in tumultuous time. This is not going to be a particularly feel good presentation. I want to talk to you about those kinds of decisions where you’re really only choosing between two bad options. And the best you can do as a leader is to choose the least of the bad options or perhaps the kind of decision where there is really no clear data to follow and that it is a question perhaps of morals or it is a question that it’s so based on future uncertainty that no data can help help you. I am the CEO of a venture backed company, and I’ve been on several other boards and a part of several CEO support groups learning groups, and so I’m really privileged to be in the company of a lot of fantastic leaders who have been dealing with really, really difficult challenges. I have got to be in the room where it happens many times, so I have lots to draw on. And let me tell you, stuff happens. Shit is happening. And man, it feels like it is happening way too often in 2020. The last six months alone have been so dynamic and so challenging and dare I say, unprecedented helmet’s on Mularkey. The elder said that no plan survives contact with the enemy and man. I think we have all felt that this year, but we’re not alone. The history is littered with CEOs who had these incredibly challenging moments and public failures, just scanning through a few of them their right bathos in the fire phone. Obviously, Reed Hastings, the fantastic CEO and the Quixtar fiasco, Lee Iacocca and the Ford Pinto. How about Apple? Newton, remember that product, the first personal digital assistant that flopped so bad that it got made fun of on an episode of The Simpsons? So all of that great CEOs, great leaders. We are going to have these moments where we realize that we are just fucked and you still have to find a path forward. Here are some examples of actual quandaries that fellow leaders have faced in the last six months. I take confidentiality really seriously, so I have anonymized all of these, but I wanted to offer them to see if any of these are resonating with you. And maybe if these are things that you’re thinking about, you can keep this question in the back of your mind throughout the rest of my presentation. And you can use it in your mind as sort of a working problem to solve and to apply these frameworks with. A friend of mine has two of their biggest customers canceled and their sales pipeline totally dried up. In Q2, the burn rate went way up. And so now they have this huge conundrum. Should they try to go raise money at a down valuation, one like that? Do they lay people off? No one likes that. They cut salaries. No one likes that. If you do cut or you do layoffs, how deep do you have to go? Really challenging stuff. Another conversation, question, concern conundrum that I have heard in one of my peer groups where an executive team of all white males, we’re getting questions about Black Lives Matter. How do we respond in a way that isn’t hypocritical and doesn’t invite backlash from our customers and our employees? Or a similar one, but different should I weigh in on the presidential election in the here in the United States? If so, how should I do it? Shouldn’t a CEO stay out of politics? Another conundrum here. Our business depends on humans traveling and gathering in groups. Just how fucked am I and when will it come back? Oh, my heart aches for you if this is the situation you’re in. Oh, here’s one. I think a lot of us have been facing the pandemic has everyone working from home. Should we renew our lease and take on a long term commitment or go permanent remote? Big, big questions. So I want to give you a metaphor before we go any further. I, I like to think of leading like mountain climbing, because mountain climbers, great mountain climbers train all the time and their experience does matter. And it is something that you can get better at. You’re not born being able to summit K2. You’ve got to work at it and train for it. And I think leadership is like that. I think it’s not something you’re born to. I think it’s something you can train and you can work hard and you can get better at and that your experience matters. And also you can be a wonderful mountain climber, very experienced, very skilled and still not summit the mountain that day. So the metaphor really is that you can do everything right as a leader and still fail. And it’s important to acknowledge that this is just a really hard job and it doesn’t have to necessarily do anything with your self-worth or your ability when you are faced with a crisis, crisis happen and your leadership is judged on what you do next. So with that in mind, these are the kinds of situations I think many of us are facing where really the only way out is through. Just got to get off the mountain. Right. Weather moved in and you’ve got to get off the mountain safely. Someone injured themselves on your Malcolm. You’ve got to get off mountain safely. And I am going to give you several hats, like seven Hack’s or Framework’s kits to help you process these big dilemmas that you may be facing. So I don’t have a lot of time. Let’s get to it, brainstorm and agree on criteria and a timeline. This is the first thing right before you actually even begin the decision making process, you need to start setting some ground rules about how you’re going to go about deciding. So here are a couple of things. You’re going to brainstorm these criteria with stakeholders right here. Common examples of criteria you may use to evaluate various choices open to you, get your team, get the key stakeholders to brainstorm the potential criteria. And then it’s really important to weight them because they’re not all equal. Here is just an example waiting. You know, I did a three point scale off to do a three point scale. What’s most important, at least important on the criteria, and then you can stack up all your option against these weighted criteria. Also very important to have a date by which you’re going to make the decision or that you’re going to have someone in your team make that decision by and have them say it out loud, preferably write it down somewhere and even say how they’re going to inform you so that everybody knows when they can expect the decision and where they can go to see it when it’s been made. OK, this is kind of a pet peeve of mine, but of course, we have to talk about it, gather data and acknowledge its limits. Of course, of course we need to get data when we can. So ask questions like what data do we need to make this decision? Are there perspectives that we need that aren’t in the room today? Is the data that we don’t have even getable in the time frame we need? And this is really the crux of it. I’m sorry that your data is definitely flawed and incomplete, and certainly that is true for the kinds of decisions that I’ve outlined already and that I think many of you are facing today. Right. You don’t have complete data. You’re the data may not even be possible, but guess what? You’ve got to decide anyway. And don’t kid yourself that waiting some. Oh, if only we have the data to do that, that that you’re somehow going to just make the decision later. Your inaction is a decision. And if that really is the best thing to do, then label it as a decision. Say I am deciding to continue our current course until such time as we may have different data or new data, but make sure you call it a decision and own it. Just don’t leave your team Swerling on. Well, I don’t know. We’ll see. It’s hard to say because what if we really can get better customer segmentation or what if we really can figure out the total addressable market and the penetration rate with all of these things that can be hard to get at. Right. Three, how should this decision get made? How should this decision get made? What kind of decision making process of the organization need? It’s very important to remember not to create a process around the people in the word hard to do because we care about our people and we trust them and everyone wants to be involved. But your job is to balance the scope of the decision, the expediency with which it needs to be made, the expertize in the room and who’s going to be accountable for it. So let’s walk through a couple of frameworks. First of all, several of you are already familiar with this decision making tree. I’m not going to spend much time on it today, but if you’re curious about it, you can look it up. It’s called decision tree or delegation tree. I’m really talking today about the kinds of decisions that we would consider to be trunk or route level decisions where he’s a tree metaphor. If you hurt the trunk, if the if your decision is wrong or if you hurt the trunk, the tree is seriously damaged. The consequences are really big. And those decisions need to be owned by the executive level person is not the CEO or a root level decision where injury to the roots man, it’s over to that tree. Right. That’s where things can get fatal. So those kinds of decisions are usually owned by the very most senior executives and or the board. So we’re talking about those decisions. We’re not talking about leaf and branch decisions today. Here is one way to think about how decisions are currently made in your organization. And most importantly, what process does the organization need for whatever decision you’re confronting? This is a helpful tool to help evaluate how you’re to how your team currently operates, how you currently operate. Most people have a default mode they go to, and that may not be the healthiest thing. It just may be their default or comfort level. And this will help you decide what does the organization need. So let’s run through it. Autocratic, these kinds of decisions. One person makes the decision without input from others. You just decide no one else even gets to weigh in. Or how about this check process? You already think you know what to do. You have a recommendation. You’re going to share it with the team, but you are going to let them weigh in before you do it consultative. This is when you gather a group of stakeholders and experts and you use that group, the expertize in the room to create potential paths forward and to help you come up with a recommendation. And in the end, it is still your decision, though, so you need to make clear that they are there as consultants. The decision still belongs to you. Majority vote. We all know what that is. A variation of that is the minority vote where you take a small group of people who have specific expertize. And for example, if you’re making a salary decision or what to do about benefits, you might say to your CFO and your head of people, I’m delegating this decision to this minority of us on the executive team. They’re going to work on it and come up with a decision for us, then their straight delegation to one individual where you can either say, hey, you’ve got to make a decision because it’s a key part of your job and I need to hold you accountable to it. And if you take a decision from them, you can’t hold them accountable for it or you could be using it to develop that person, give them a shot at taking on bigger projects, consensus. I think we know what that means. All ideas are thoroughly discussed at the group, and the goal is to get everyone to at least a disagree and commit here in the Pacific Northwest. I think this is a pretty common method of decision making among leadership groups. It can be expensive, it can take a lot of time, and in the end, not everyone gets their first choice. But you do get everyone to commit to the decision. And then least popular or really feasible of all is this. Unanimous, right? The idea that if we all spend time together thinking about it will all come up with something that we absolutely love. There’s no reason to disagree because we all just love it. We’ve talked about it so much. We got to someplace that we all really value. This may not even be possible and it does take a long time. So for purposes of the kind of decisions we’re doing, we’re talking about today, I made a little bit of a heat map. You know, to my view, the kind of decisions we’re talking about are often going to be consultative, where one person is going to own the decision and you need that for speed and accountability. It’s often the leader, most senior executive in that functional area. But you’re going to want to get a lot of information and rely on your group of experts, key stakeholders, to inform you. You never want to do autocratic and unanimous when you have these kinds of decisions. It won’t build trust. You’re going to end up cleaning up after that and they’ll be either too expensive to even make a decision that way. The things in Orange that I’ve highlighted, I find to be useful tools, depending on maybe some smaller scope decisions and certainly something that you can rely on the clarity of your team. So I advise you to go take this back to your team and ask them what their default mode is, what they think your team’s default mode is. And if there’s a decision that it’s been has been swirling in the organization and we can’t seem to get to a conclusion, point out, which decision making process do you think would be most valuable for the organization? OK, number four, this is something I’m really passionate about. Check and acknowledge off the spreadsheet factors. There is a huge mythology in the tech world and in business, actually business world that humans are rational, that if we just look at the data and do what the spreadsheet tells us, we’re all going to make better decisions. But my view is that emotions, corporate values and personal values act as dark matter on our decisions. They are already operating on us and we need to own them before they own us. So, for example, social science is clear. We’re not rational that we, especially when presented with a lot of different paths forward, that we get analysis. Paralysis is the paradox of choice is a great TED talk by Patrick McGinnis on this, and he has some great tips on how to overcome analysis paralysis. If you’re in a room and there’s too much data, there’s too many options, that’s going to make it harder to decide. So hackey has its first identify what your top choices that your best recommendation that you you think will probably be the winner and then one by one, compare alternative path forward against your top choice. Don’t look at everything in totality. So here’s my top choice. Here’s how it waits. Let’s look at this next one and compare it. If one of you are a sort of runner ups actually does beat out the front runner, it becomes the new front runner. So use that paradox of choice phenomenon to your advantage. Work with it. Don’t try to have all the options at once. Present an option and then one by one try to tackle the alternatives. Also accept the fact that post rationalization is a thing. Talk about it as your team rationalization, as we all know, is when your gut has made the decision in a split second about what the right way forward is. And then you come up with all the data and supporting arguments to justify your gut feeling. We all do this. It’s happening already. So just own it and talk about it and not give me this, you know, Fuller point here. I like to use this metaphor of dark matter to describe those off spreadsheet factors that are pulling at our decision making that you can’t necessarily see in a spreadsheet. Dark matter is a hypothetical form of matter that account for approximately 85 percent of matter in the universe and we can’t observe it. The only reason we know it’s there, it’s implied because of the way gravity is working on our observable universe. So I think of Decision-Making like that. If you’re ever in a room where things are just kind of swirling or difficult, you can’t kind of figure out why. It’s probably because there’s some emotions, some corporate values or some personal values at play that are distorting or having a gravitational pull on the spreadsheet factors. Let’s take a look. First of all, don’t be shy. Ask yourself what emotions are at play right now. Ask yourself first what emotions are at play to me. What feelings am I having that could be getting in the way of me understanding the scope of the problem, the root cause of the problem, or even brainstorming various past forward? How might those emotions that you’re feeling impact the amount of risk you’re willing to take going forward, knowing your emotions and if appropriate, share them with your team? I prefer to share them in a way that caveats that, you know, you need to take care of your emotions, that they’re yours to manage and not theirs, but that that moment of being vulnerable with, hey, I’m actually feeling I’m feeling guilt and it’s impacting my ability to see a path for it. I’m feeling resentment, I’m feeling fatigue and or whatever it is, or I’m feeling just really optimistic. And that’s why I think, like, yeah, we don’t need to worry about the word. Case, I’m feeling really excited, whatever they may be on it, because it’s happening, that’ll encourage other people to own their emotions. Similarly, when you have your, you know, lift the path to your path, forward your top choice, make sure you ask yourself what corporate values are at play. Is this past the integrity test test? Picture yourself using your corporate values to explain why you chose that path forward. Like imagine yourself. So in our case, you know, we have these values of Taghavi and I like to picture myself explaining is this decision and making transparent? Is this decision I’m making generous? Is it empathetic? Is it exceptional? I really hold yourself accountable to it. Thirdly, on this dark matter of spreadsheet factors framework, make sure you ask what personal values are at play. Hopefully your corporate values and your personal values are aligned, hopefully. But if they’re not, or even if they are, you still may need some priming to make sure that you can stand grounded in your personal values and that you are not doing just what’s expedient at the time because maybe you’re overwhelmed, tired or afraid. You want to be grounded in your long term view. You want to tap into your courageous ego that is inside you, not your I’m scared or soothed or just make us go away. Or can someone else deal with its ego, the bravest part of you, your best version. So one of the ways to do that is to sort of trick yourself by doing some brain priming. Think of think of your favorite icons out there. What do you admire about them? Lyster qualities. Say it out loud to yourself or to a friend like, oh, guys, I just I just really admire this one. I really admire Reed Hastings. What would he have done in this situation? Right. I really admire Bill Gates, how Bill Gates think about a systemic problem like this. Or here’s another brain priming trip to trick to get you standing in your most creative version of yourself. The old eulogy, right. When you are gone in this world, what do you want people to say about you? If you could fill that sentence, you know, you could count on her for X, you can count on Sarah for integrity. You can count on Sarah for courage. You can count on Sarah for kindness. You can whatever it may be for you. Those are just some of the things I hope people say about me when I’m dead and gone. Another thing I do, actually, I probably do this one five times a day, not just for big decisions, but it really surprisingly helps to take myself out of my view, my, you know, biased, entrenched, interacting with all the emotions in the room and the history that I’m carrying forward, all that stuff that muddles our leadership. I ask myself, what would a really fantastic CEO do in this exact moment? Right. If I’m gone and next week, a new, really talented, amazing CEO comes in with fresh eyes, how would she look at this situation and what happened? She tart forward. And that’s just a little trick to get you into a better brain space, because I do think we need to stand in our courage as leaders. And these moments, Maya Angelou, I think, is just one of the wisest people to ever walk the planet. She has this great quote. Courage is the most important of all the virtues, because without courage, you can’t practice any other virtue consistently. You can practice any virtue erratically, but nothing consistently about courage. I think that’s true. And so those tips are to help you tap into your courageous self. OK, getting low on time, check on that alignment, gather feedback. This is a tool for a situation when you you’re making a recommendation, either a small group have got together to make a recommendation or you, the leader or the owner of the decision has a recommendation to bring to the team. And you stay before you start, I’m going to make you a recommendation recommendation. I want your feedback. I will own the decision. But here is a scale one through eight and you show them the scale. And at the end of my presentation to you, I’m going to ask where you are in the scale. So you reminded them the decision is yours. You told them the rules of engagement so their brain can relax while you’re talking. They don’t have to think about it. But my decision is that her decision, which you want from me, should I weigh in now or should I wait till later? Like their brains can relax because they know how to engage. And then they have seen the sort of rules of engagement and what expectations are. So present your recommendation and then ask your team where do you fall on the scale and why? This is a great way to get an alignment check. In the end, you can still make your decision, but it’s really important to refine, make sure you don’t miss anything or pitfalls and also to get ahead on your change management, future proofing. This is so important because we have to acknowledge all forecasts are broken right now. They’re just all broken. Scenario planning is the only thing we can really do right now. And 2020 also, it’s important to get ready to be wrong on whatever decision you’ve made. OK, briefly, forecasts depend upon having good sense of cause and effect, a solid sense of trend. I don’t think any of us can say that the global pandemic hasn’t interrupted their trends. All trends are crazy. That doesn’t mean we shouldn’t do work and make plans. It just means don’t tell your team. Yeah, we’ve got a new forecast coming out. Say we’ve got some scenario plans. We did a low, medium high. We have no idea where we’re going to fall out. But here’s a range that we think could be possible. And now let’s all work together to get as close as we can to the high one. And that will give your team the confidence to understand that the future is uncertain. But we can handle it. We may not be able to predict it, but we can handle it and we’re going to be ready for it. So scenario planning, not forecasting. Also, once you’ve made your decision, it’s very important to identify. If I have made the wrong decision, where is it most likely to have gone wrong and let your team contribute to this? Right. OK, if I made a mistake on this one, this is the wrong call. What most likely will mess it up? This will help you. One, make sure your execution is focused on that point and to identify quickly if you need to pivot again. Right. What observable data will you have? When will you get to see it by again? This will help your whole team relax into a OK. We know what we’re looking for on this high stakes decision in terms of whether it’s right or wrong. And we’re all going to be aligned and when we should start seeing results, good or bad. This also helps you avoid confirmation bias, right? Once you’ve made the decision, you don’t want to look only for data that will back up the decision and make you feel real good about yourself. You want to look at all the data that is potentially out there. So get some agreement on what kind of data you’re going to look for. Here is an often neglected piece of decision making that I think it’s important to name and to call out and prepare for. Do not be surprised by your decision making hangover. This is really common because the real work starts after the decision is made. So you’ve got to give yourself time to get in that zone. Plan for the afternoon, the evening, the day, the week where you’ve made the decision, but you haven’t rolled it out yet and you haven’t had to explain it to a larger circle to take a deep breath, feel your feelings for some people. They’re going to feel instant relief. Some are going to feel out, oh, did I make the right decision? Some are going to feel excitement and happiness to go forward, even though it’s a really hard thing. And then you’re sort of at an emotional mismatch for where your team is going to need you to be. Right. Really, you need to process all of those feelings so that when it is time to do the roll out, that you are grounded and you process your feelings so that you can be there to absorb and de-escalate everybody else’s. Right. And one of my mantras is remind myself I can do hard things to do that in your, like, little breather zone, in your aftercare moment, remind yourself you can do hard things. The organization needs this to you all needs this from you. All of the feelings you’re having are natural. Fill them and get ready to have a better day tomorrow. I want to leave you with one final quote from Winston Churchill, one of my absolute favorite. He says, Success is not final. Failure is not fatal. It is the courage to continue that counts. All right, guys, you got this. I hope that this was helpful to you. Best of luck and all of your really, really difficult high stakes decisions in the months ahead. You can do it.

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