How Entrepreneurs Can Make Better Decisions
Originally published in Verge Startups.
We make hundreds of little decisions every day. Wear the black shoes, not the brown ones. Salad for lunch. Turn left. We don’t often doubt our own judgment in these situations. There isn’t much at stake, after all.
But when we run up against big business decisions that come with serious implications, something changes. We become more aware of just how unreliable our brains can be, and the stress we feel from uncertainty amplifies our own doubts. In these situations, we need a little help.
Avoid Common Business Decision Making Traps
Sometimes, we’re able to help ourselves. Here are a few examples of how you can pull yourself out of a business decision making trap (from the HBR):
- Anchoring. Many people give disproportionate weight to the first information they receive. Be sure to pursue other lines of thinking, even if the first one seems right.
- Status quo. Change can be unsettling and it’s easy to favor alternatives that keep things the same. Ask yourself if the status quo truly serves your objectives and downplay the urge to stay in your current state.
- Confirming evidence. If you find that new information continually validates your existing point of view, ask a respected colleague to argue against your perspective. Also try to avoid working with people who always agree with you.
Here’s a little trick to pull yourself out of the quicksand of uncertainty and take action on a decision:
Work towards a binary decision (i.e., yes or no, this or that) and, once you have two options, flip a coin. Don’t go with whatever George Washington tells you to do–rather, try to gauge your reaction to the coin toss. If you’re disappointed by the outcome, then you should go with the other option.
Sometimes all of us need a little help.
So where do some of the world’s leading entrepreneurs turn to enhance their business decision making?
Business Decision Making Inputs
The following answers are provided by members of the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.
Where Leading Entrepreneurs Turn to Make Better Business Decisions
1. My Team
My team is going to be with me before and after a big business decision, so they should be part of the process. They know our customer base, and they can offer valuable insight to things that will affect the company.
– Michael Patak, TopstepTrader
2. My Intuition
I’m a huge believer in following your gut. Read Malcolm Gladwell’s book “Blink” for a scientific explanation of the incredible amount of wisdom and knowledge stored in your intuition. When faced with a tough decision, I go inward. Is my gut telling me this feels right or wrong? I’ve never regretted listening to my intuition, but I’ve often regretted ignoring what I knew to be true.
– Laura Roeder, LKR Social Media
3. My Partners and Mentors
When I am faced with a big business decision, I always speak to my partner first. He is the person I spend the most time with in business, and we discuss everything. I also have a few mentors with whom I discuss decisions. I do that because they have been there already. They know from experience where things can go wrong, and there is nothing better than experience.
– Joe Apfelbaum, Ajax Union
4. A Broad View of Perspectives
I tend to reach out to multiple people with multiple experiences and relationships to get as broad of a perspective as possible. It’s not uncommon for me to talk to as many as 15 people. Once I feel that I have input from a good cross section of people, I’ll make sure that I have some time alone to ponder the feedback, figure out how I feel and what my own inner voice says. Then I act.
– Panos Panay, Sonicbids
5. My Competitors
Yes, I talk to my competitors and people facing highly analogous challenges. You will be surprised what you can learn if you are willing to be transparent. Your secrets aren’t so secret, and if you help a competitor and yourself, you are both better off than facing the entire marketplace alone.
– Trevor Sumner, LocalVox
6. A Group of Dissenting Opinions
I like to be surrounded by strong people who think differently than I do and whom I respect. These kinds of people who have different opinions are my go-to people when I’m facing a big business decision. They attack the issue from a different angle, play devil’s advocate to my traditional line of thinking and challenge me to defend my perspective.
– David Ehrenberg, Early Growth Financial Services
7. My Business Partner
My business partner and I are open in our discussions about our ideas. Most business decisions ultimately affect him, so it’s good to put two heads together to solve the problem by dissecting it and brainstorming possible solutions. Both of our experiences and the way we think are different, but our values are the same. The different ideas and aligned values help us make good decisions.
– Andy Karuza, brandbuddee
8. A Personal Board of Advisors
A personal board of advisors is a group of people you meet with regularly who are smart, savvy and trustworthy. They do not have to be in your industry; they just need to be able to help you when you have a big business decision. I love my personal board of advisors because the group is an amazing way to get feedback and have a personal support system.
– Vanessa Van Edwards, Science of People
9. My Father
My dad has a lot of experience growing a business as a pseudo-entrepreneur. He deals with the operations of the business and was instrumental in teaching me how to communicate with employees, suppliers and potential business partners. He isn’t afraid to give me constructive criticism on the decision or the process, and it is something that is needed for me and the company to improve.
– Derek Capo, Next Step China
10. My Top Five
I have a group I call my top five, and it serves as my personal board of directors. I rely on my top five to help me look at big business decisions from different perspectives. I make sure these individuals have varying outlooks, experiences and temperaments. My Vistage group, a professional organization of other CEOs, has helped me more than I can express with some of my toughest decisions.
– Eric Holtzclaw, Laddering Works
11. My Non-Startup Friends
Few founders use friends outside of the startup world and wrongly assume that they won’t understand. Though non-startup friends rarely ask questions about ROI, competition and investors, they often shed light on the valuable humanistic aspects of the decision, asking things such as, “Why are you hesitant? What do your users think? What do you want to happen?” Outsiders reveal a lot.
– Heidi Allstop, Spill
Where do you turn when you need help making an important business decision? Tell us about it in comments below.