I’ve noticed over the years that we’ve become very balanced in our decision making. I think that comes from having a very diverse set of partners. Almost every major decision involves a group discussion in which we discuss the pros and cons of the decision, as well as the priorities of making a decision (sometimes the best business decision is to just leave something alone). And, for the most part, we’ve been successful with this approach. Not like billion dollar successful, but continuous, steady, profitable growth in a down economy.
I was thinking a lot about this the other day. What factors go in to making a “balanced” decision? What I came up with was what I’ve decided to call the CAG model:
Customers – what are our customers saying? Are they complaining? Are they asking for a feature? Are we getting a lot of emails that could be reduced by improving how we do something?
Analytics – what does the data say? Are we losing customers? Are customers searching our site for something we don’t have? Are our conversion rates lower than they should be?
Gut – what do we think is the best for the short term and long term health of the business? Can we maintain whatever we create? Are we creating more problems than we’re solving? Is there something else that’s more important to us? Does this decision help or hurt potential future initiatives? How does this affect our current and future employees?
Not all decisions we make are weighted 1/3 each, but for most big decisions we’re giving quite a bit of weight to all of the above. For instance, it’s rare that we make a decision solely based upon our gut without investigating the other two.
This is probably one of the best reasons I’ve found for having partners. There’s no way that I could make sound business decisions by myself at anywhere near the consistency that we do as a team.
Generally the person who brings up the idea has the most jaded perspective. If I deal with a ticked off customer and I see a way to fix a problem, I’m likely going to prioritize it higher than Greg or Mike might. Their job is to ask questions like “how often do we see this problem?” and “is this more or less important than fixing other problems?” Generally we’re able to come to a consensus pretty quickly, and if we aren’t there’s always an action item – say to collect more data or run a test – that will help us revisit the situation in the near future and make a good decision.
This process isn’t rocket science. I’m sure most good businesses do something similar, either consciously or subconsciously. Yet I think it’s critically important in helping us maximize our upside and minimize our downside when it comes to making most business decisions.