Tag Archives: decision-making

An ABC of decision-making

Assessment – Balance – Compromise (but not necessarily in that order)

The big supermarkets tell us we want choice, they imply that the more choice we have the happier we’ll be. In reality of course, we get overwhelmed if there are ten brands/ sizes/ prices of tomato ketchup; we want only limited choice. If there’s too much decision-making we don’t make a choice at all and the supermarkets have been late to acknowledge this and are only now cutting back on the range of items on their shelves.

Price is just one element of a buying decision and, even then, it can seem difficult. When faced with just three prices for three brands of a relatively low-cost item with similar specifications – for example an electric kettle – many of us will avoid the highest and lowest prices and go for the mid-priced item. It’s comfortable and we can probably justify our choice as the ‘least-risk’ option (not getting ripped off nor buying a cheap pup). Similarly, when given a survey question asking us to rank an item from say 1 -5, we’ll often choose option 3 because it means we don’t risk criticism or need to give further explanation by expressing a ‘for’ or ‘against’ view. Anything to make life easy.

For decisions more significant than buying a kettle or completing a survey, compromise – taking a middle-of-the-road position can be seen as positive or negative depending on the context. In international negotiations, the resolution of a fiercely contested debate will strive for a consensus that is likely to end in compromise. All sides making concessions is usually necessary if diplomatic relations are not to break down.

In a business context, compromise can be seen negatively – a sign of weakness, the worst of both worlds, the easy way out – with the risk of losing face if applied to a negotiation. We expect our leaders to make firm decisions, after taking soundings from others holding contrary views maybe, but ultimately being decisive seems to be what leadership is all about.

This pressure means that our leaders, including politicians, often develop what Tim Harford brilliantly describes in a TED Talk as ‘the God Complex’. This is the belief that, although undeniably the world is an incredibly complex place, those with the God Complex believe they understand how the world works when, of course neither they nor anyone else, really does. Having identified the God Complex, Tim Harford goes on to advocate that we stop giving school children the idea that all problems have answers, and show instead that most progress in life is achieved through trial and error. A messy but more accurate portrayal of reality.

In my work with young people trying to start their own businesses, I try to instill in them the idea of trial and error – having the confidence to take risks, to fail, but then to reflect, learn and return to the original challenge. But my particular interest in getting away from expecting a direct route to solutions, is my experience of the importance of a b-word – balance.

I invite young entrepreneurs to look at a variety of routes to achieving success, even though it may feel less comfortable than choosing what appears to be a direct route to the next stage in the development of their business. The ‘right way’ is surprisingly often about pursuing more than one route and being prepared to flip from one to another as situations change – balancing alternative solutions.

As the person trying to support the decision-making of others, I’m aware it’s a fine line between helping them make an informed decision and (perhaps subconsciously) steering them in a particular direction. Working with a group, it’s a question of balancing top-down versus bottom-up ideas development, and in moving forward, it can be a matter of finding the balance between the ‘just do it’ and ‘fail to plan and you plan to fail’ approaches. Deciding to be indecisive can be liberating – try it!

Tim Harford’s TED Talk is at:  https://www.ted.com/talks/tim_harford/transcript?language=en

What makes an entrepreneur?

Recent research by Innovate UK and YouGov asked 18-30 year olds that were not in employment, education or training about their attitudes to innovation and entrepreneurship. One of many findings suggested that young people have problems with the word ‘entrepreneur’ and only 8% of those interviewed said they would describe themselves as ‘entrepreneurial’.

This got me thinking about the images conjured up by the word ‘entrepreneur’ and why young ‘disadvantaged’ young people might distance themselves from that image.

I think mass media has a lot to answer for here. TV programmes (or ‘shows’ as Lord Sugar once described his) like The Apprentice and, to a lesser extent, Dragon’s Den have long since given up on pretending to reflect real business and typical business people – no doubt in the scramble for viewing figures and the need to edit hours of filming down to a few handpicked moments of high drama, however contrived they may appear in the final cut.

The confrontational format of both those TV programmes probably does nothing to encourage more thoughtful and less gobby would-be entrepreneurs to consider starting their own businesses. This may also explain why 82% of those young people that YouGov consulted viewed the business sector as ‘difficult to access’ (whatever that really means).

But I also think the contrasting portrayal of entrepreneurs – as super-cool, edgy, risk-takers – is equally unhelpful. I assume this portrayal is intended to make entrepreneurship more attractive to younger people, but giving entrepreneurs super-hero qualities can also be off-putting if you’re perfectly capable but low on self-confidence.

Maybe the potentially confusing terminology is also to blame. I’m not sure I could clearly describe the difference between an innovator, an inventor, and an entrepreneur. And that’s just in a business context; as far as I’m concerned all three individuals might have no plans to invest their particular talents in setting up a business, but still aspire to make a difference and change the world.

There are any number of articles defining ‘what makes an entrepreneur’. A Google search with this question gets you 30.7m results and I myself have written about this in the past, in relation to ‘social entrepreneurs’ in particular. There’s a mind-boggling array of arguments about whether entrepreneurship is about having the right mindset, relevant practical skills, or suitable character traits – in reality it’s probably a mix of all those elements.

Sometimes I work in the Entrepreneurial Spark incubator in Milton Keynes – a business start-up-and-grow facility (‘powered by NatWest’ it says on the publicity) and there I’ve seen a large poster with E-Spark’s interpretation of what it means to be a successful entrepreneur. The poster’s list of 22 ingredients in their recipe for success [with my own commentary in brackets] are below:

I focus, focus, focus [yes – procrastination and being all over the place is rarely helpful]

I re-imagine daily [whatever that means… could it be about constantly monitoring progress?]

Outcomes rule my day [being effective as opposed to efficient (which is about outputs) makes sense – ‘results-focused’ is another way of putting this]

I am self-aware ALWAYS [if this means knowing what you’re not good at, knowing your limits and how to plug the gaps, that a good thing]

I know my numbers [yes – whether you like or loathe them, you need to understand figures]

I engage my customers [Engage is one of my red-rag words because it’s so vague – so is this ingredient]

I am constantly curious [although they say the best entrepreneurs are not too bright – so they don’t always think about what could go wrong and focus instead on the destination]

My business has vision [I suppose as long as your vision and that of the business are complementary…]

I am humbly confident [yep – I think that strikes about the right balance]

I inspire my team to excel [leading by example is clever, leading from behind is even smarter]

Uncomfortable? I’m comfortable with that [the ability to take yourself out of your much-talked-about comfort zone is an essential requirement when starting a business – be prepared to do it]

I love to collaborate [yes – I believe collaboration (rather than competition) is the future for businesses that matter]

I am aware… Always on [I hope this doesn’t mean you never switch off from being an entrepreneur – that is not a healthy habit]

I make decisions intuitively [gut feeling is important for some people and, if you’re wrong, they also say ‘fail early, fail fast’ to make you feel better about your mistakes]

I take action – ALWAYS [cue old joke – I used to be indecisive, but now I’m not so sure]

I am constantly selling and pitching [interestingly there’s a current backlash against pitching. And a tip – don’t sell and pitch to your friends and family]

I wake up ready to communicate [as long as this doesn’t keep you or your partner awake at night!]

I have a lean work ethic [makes sense for some businesses – particularly those with low start-up costs, as does the concept of a ‘minimal viable product’]

I develop a relevant network [love or loathe networking, it can get you further faster]

I value working with mentors [never stop learning and never think you know it all]

I am opportunity hungry [I think this means being able to spot opportunities and take them]

The buck stops with me [exciting and scary – as is much of ‘going it alone’ in business]

Further reading:

Slowing the spin about social entrepreneurs https://enterpriseessentials.wordpress.com/2013/12/21/slowing-the-spin-about-social-entrepreneurs

Age and social entrepreneurship https://enterpriseessentials.wordpress.com/2015/04/08/age-and-social-entrepreneurship

Has pitching had its day? https://www.theguardian.com/commentisfree/2017/dec/15/the-apprentice-pitch-pitching-productive?

An A – Z of social entrepreneurship: A – D

As a contribution to Global Entrepreneurship Week (17 – 23 November) Chris Lee blogs his personal and highly selective reflections on what increases the effectiveness of social entrepreneurship to mobilise resources of all kinds for positive change and social impact in and beyond local communities.

A – Accountability

Even when you’re spending your own money you’re not truly free to behave as you might wish. You have a responsibility to guard against your actions having a negative impact and to be aware that a poorly executed plan may harm the credibility of those who follow you. When you’re working with vulnerable people, as clients or employees, their welfare should also be your concern.

 B – Balance

Rarely are there right and wrong ways of doings things, even when applying a proven model in a new situation. For all the online advice and training manuals, social entrepreneurship is about testing new and different ways to bring positive change in society and seeing ever obstacle as a new opportunity. Ultimately the ‘right way’ is likely to be a compromise – balancing conflicting needs and interests.

 C – Collaboration

It’s too easy to stereotype entrepreneurship as being competitive (and aggressive if you believe ‘The Apprentice’…) and social entrepreneurship as being about collaboration. In reality, entrepreneurs of all varieties know the value of networking and building mutually-beneficial alliances with others. Indeed, with growing need and shrinking resources, partnership may be the only answer in some cases!

 D – Decision-making and democracy

When asked, four years on, why he’d not consulted the community when setting up a (very successful) social enterprise, the entrepreneur replied “They’d still be trying to decide what to call it if I had.”  

Consultation and involvement are our watchwords, but they can make decision-making more cumbersome. Business decision-making tends to be more streamlined. But, ultimately, which brings better decisions?