Karyn Schoenbart, CEO, The NPD Group
As a leader, it’s critical to make important decisions in a timely manner. You will never have all the data, complete consensus, or a crystal ball. You just need to make the best decision you can with the information you have at the time. However, having a process for making complex decisions can help.
Recently, I was working on a major transformation effort, and it was important we moved fast. My motto was “go, learn, iterate,” which is the opposite of the old adage “measure twice, cut once.” While both have their place, a leader must know when deciding things quickly is more important than being precise, and when precision take precedence over speed. When making tough calls, I generally adhere to this process:
- Outline all the possible options, even those I don’t like. There are usually 3-5 options.
- Gather information/data
- Lay out the pros and cons of the options
- Solicit opinions from others involved
- Make the call
The length of time and the amount of effort expended at each stage depends on the importance of the decision and the weighting of speed versus precision. Sometimes, I can run through all of these steps in my head and be done. Other times, it might take longer to get to a point where I feel confident enough to act.
You have to accept that, occasionally, you will make the wrong call. But. as a leader, it is critical you take action in a timely manner. Sometimes, getting from 90 percent to 100 percent isn’t worth it in terms of lost time or additional cost.
Here’s an example of how my process helped me decide whether to shut down a business. Several clients had cancelled a certain service, and we didn’t know if we should discontinue offering it or continue to provide it. I first outlined all the options:
- Do nothing (this is an option to remember, and, while it’s often not attractive, it is worth mentioning). In this case, do nothing was to continue the service as it was.
- Shut down the service.
- Modify the service.
Next, I gathered information/data. How many clients were buying the service, how happy were they, and how much revenue did it generate? Was the service profitable?
I jotted down the pros and cons and solicited feedback from my colleagues. I uncovered a few interesting pieces of information along the way. While the service was profitable and the remaining clients were generally happy, there was a problem I didn’t anticipate: Joe, a critical company resource, was spending an inordinate amount of time on the service, taking away from more important initiatives. This was certainly a disadvantage to continuing the service. However, I also learned a huge client who buys many services from us would be very unhappy if we discontinued this particular one. This was a negative to shutting it down.
So, with the scales virtually balanced, we turned to option three: modify the service. The team came up with an approach that would reduce the frequency of the service from monthly to quarterly. This would result in lower profits, but it would allow us to decrease the burden on Joe while still providing clients with enough value to keep them satisfied.
Having a process for tackling complex decisions can help you gather the information and weigh the pros and cons. It’s then up to you as a leader to make the tough call.
About the Author
Karyn Schoenbart is CEO of The NPD Group, a global provider of information and advisory services, and author of MOM.B.A. Essential Business Advice From One Generation To The Next. She has over 30 years of experience in the market research field, with expertise in identifying and developing new business opportunities and client partnerships. Schoenbart was named one of the Top 25 Most Influential Women of the Mid-Market by the CEO Connection. She is also the recipient of the Long Island Brava Award, which recognizes high-impact female business leaders, and the Legacy Award from Women in Consumer Technology. Schoenbart is passionate about coaching others to greater levels of achievement. She is a resident of Long Island, NY. To learn more, visit: www.KarynSchoenbart.com.
[Image courtesy: Max Pixel]