Great leaders distinguish themselves from bad or even just good leaders by their ability to make the right decisions at the right time. There is a mystique that surrounds a great leader’s ability to make great decisions, and I see it all the time in founders.
Successful founders become successful by making great decisions, and they tend to do it viscerally. In their gut. I hear founders all the time, against all odds, say, “I just know _____.”
Les McKeown calls this the founder’s “golden gut.”
Bud Tribble borrowed the Star Trek phrase “reality distortion field” to describe Steve Jobs decision-making at Apple. Jobs seemed to have this internal magic eight ball that allowed him to go against the grain, challenge the status quo, and be right.
Yet as a business transitions from its organic growth stage into its structured growth stage, a founder’s decision-making ability, their inner magic eight ball, faces its most challenging test.
So difficult, it is guaranteed to fail.
Destined for failure?
The vision of most founders I meet is far greater than their capacity for decision-making. You simply can’t get to where you want to go by making decisions the way you are right now.
Let’s be honest; I doubt you want things to stay the way they are right now.
As founders, we don’t just have to deal with our decisions at work; they follow us home each night and greet us as soon as we wake up in the morning.
Founders don’t just experience this pressure mentally. We experience it physically. I’ve seen founders’ blood pressure go up with their decision-making demands. And I’ve seen it fall dramatically when they’ve evolved in their leadership.
We experience it emotionally too. It’s so draining. I remember running my business as hard as I could then going home with nothing left in the tank for my family. It’s not fair for your family, and it’s not fair for you.
So what do you do?
If you, as a founder, are guaranteed to fail the test, why even try? What can you do about it? Can you avoid the test?
We’ll take a closer look and see if we can answer these questions. But first, we need to talk about the test itself.
The test you are guaranteed to fail
In the early stages of your business, you are the judge and executioner. You decide what needs to get done, and you do it. As you hire employees, you still decide what needs to get done and when they do it.
If you make the right decisions and have the right people to execute those decisions, you will grow very fast. It feels great. You’re on top of the world. Congress may think the behemoths are too big to fail, but you know you’re too smart or too fast to fail.
However, as the numbers of clients, jobs, and employees increase, so does the quantity and complexity of decisions.
The quantity of decisions is easy to understand, and founders often see it coming. This is why many founders will reach out to coaches, consultants, or confidants to learn how to make better decisions faster. While it can extend the founder’s time in the organic growth stage, it is a stop-gap measure at best.
The complexity of the decisions is the real problem. It’s not just the complexity of the decision itself but also the complexity of the data needed to make the right decision.
In the early stages, the founder has her hands on everything. She hears about a client issue when it happens, and if there are two or three client issues, she knows there is a problem that needs to be fixed. Founders are incredibly adept at making decisions based on stories and anecdotes, and experiences. These are rich data sources, and there’s no need or even the capacity to try to replace them with reports, charts, and spreadsheets.
But this all starts to break down when the founder’s experience does not encompass the entire company or everyone impacted by the decision. Three clients used to be the majority. If they were all experiencing an issue, it needed to be fixed once your get to 300 or 3,000 or 30,000 employees, basing your decisions on a few customer experiences can lead to constant, dramatic, and unproductive change inside the business inflicting on it a form of organizational whiplash.
Ultimately, at some point, this style of decision-making fails. The founder is buried under a never-ending barrage of decision-making and firefighting. There is confusion all throughout the company. And not being armed with the right data, the founder will miss it on a few critical decisions.
There is simply no way for the founder to keep up. They try to give up some decision-making, but it’s hit or miss at best and usually fails, leaving the founder with an even bigger mess to clean up. Delegating this way fails because it doesn’t address the underlying problem.
There was never a golden gut. Individual decision-making based on instinct never provided a reliable way to make the right strategic decisions.
What can you do about it?
If the test is of your ability, you can’t pass it, and you can’t avoid it. But that doesn’t mean it is hopeless, far from it.
The answer is not to become a better decision-maker. It is to build a decision-making machine, one powerful enough to drive your business forward faster than ever.
Rather than try to push through yourself or delegate everything and completely decentralize decision-making, you need to make a shift to team-based decision-making. This can be a scary suggestion for a founder who hasn’t yet thought through the benefits. Here are just a few.
While individual decision-making can’t scale, team-based decision making is designed to scale.
While one individual can only have access to so much data, a team’s access is far greater.
While one individual can be swayed by personal experience or emotion, that is far less likely to affect a team’s decision-making.
While it is incredibly difficult to transfer decision-making ability from one person to another, it is far easier to transfer from one team to another.
By pulling the decision-making process outside of a single person, it can be structured, monitored, and improved.
Personally, you, as the founder, will experience an enormous sense of relief. Your team will share the burden you bear for your company. The weight of the most critical decisions will no longer rest on your shoulders alone.
All of this combined is a huge step toward creating the capacity you need to succeed in the structured growth stage.
The number one distinguishing characteristic between those who succeed in the structure growth stage and create an incredible business from those who languish and wish for what could have been is how they make decisions.The number one distinguishing characteristic between those who succeed in the structure growth stage and create an incredible business from those who languish and wish for what could have been is how they make decisions. Click To Tweet
Team-based decision making alone is not enough. What you need is high-quality, team-based decision-making (HQTBDM).
High-quality team-based decision-making
If you were to boil down the work that I do for my clients to just one thing, it would be this: I help them build a high-quality team-based decision-making machine. I help founders build a new team or equip their existing team with the abilities, processes, and skills to make high-quality decisions at scale.
And we don’t stop with the senior leadership team. Once you’ve done it at the senior level, the real exciting part begins as you equip senior managers and even cross-functional teams throughout the organization also to make high-quality decisions.
We’re not talking about adding 10% in revenue this year. It’s so much bigger and so much more powerful than that. I’ve seen companies who were struggling at $2M make this switch, then blow past $20M and then hit the $200M mark. If you really embrace this mindset shift, I would argue that those kinds of results are normal. The only hindrance at that point is the size of your market. In other words, the sky is the limit.
So how do you do it
This is the heart of my six-month Capacity Intensive. It’s not something you can do overnight, but you can get started today. Here’s how.
- Identify your existing leadership team. Ignore the formal team and just think about who on your team you go to when you need advice for your most critical decisions. This may be one person; it may be twelve. But however many it is, that is your leadership team.
- Structure your meeting. This step has two parts. First, set a routine time for everyone to come together, get it in the calendar, and don’t miss it. Second, structure the flow of the meeting. I recommend the 4D Process by Les McKeown but have also enjoyed using the Weekly Tactical model by Patrick Lencioni or the L10 meeting from the folks at EOS.
- Define your decision-making method. How will team-decision actually be made? Will you make it? Will the team make it? Is it a vote? Does everyone have to agree? Are you deciding now or later?
To find out more about creating a leadership team to make high-quality decisions for your company, check out this article. Once things are humming along, don’t stop there. The real value, the 10x or 100x growth, lies in building high-quality team-based decision-making into the very fiber of your company at every level. For more on that, check out this article.
This is a dramatic shift in a founder’s mind, but it doesn’t haven’t to be a difficult transition. If you take these steps and genuinely commit to this new way of leading your company, you will find your sense of control will increase, your decisions will be better, and your company will grow faster than ever.
The best part is you will get all this AND feel more alive and refreshed than you have in a very long time.