You Know What To Do

One of the most consistent observations I’ve had in my time in startups, scale-ups, and public companies is that smart people with context on a tricky situation almost always know exactly what they need to do.

Teams obsess about company strategy, about data, and about frameworks for decision-making. But I’ve found that for most operational decisions the right course of action is actually pretty obvious to people with a lot of business context.

It’s Hard to Be a Hard Ass

The simple fact is that people hate confronting difficult decisions. And instead, most come up with increasingly painful coping mechanisms to avoid conflict. Eventually they wind up incurring much more aggregate pain than if they had simply bitten the bullet as soon as they recognized the realities of their situation.

Some of the more notable instances where this plays out:

• Should we fire <some exec>? You almost always already know whether they’re good or not (if you’re asking, the answer is no)

• Should we do a layoff? The answer is less definitive, but you almost always know in your heart whether or not a layoff needs to happen

• Should we cut this product? In today’s cutthroat markets, a middling product tends to be a dying product and the potential of great products is immediate and extreme

• Is it time to sell the business? If you’re out of gas or slowly dying the decision to sell is obvious. On the positive side, a truly amazing acquisition opportunity will typically be very obviously excellent (e.g. several times higher than prevailing public multiples for growth startups, or selling for a 200x revenue as a startup)

• Is it time to shut down the business? Again, in every case where I’ve seen someone grappling with this question, the look in their eyes told me everything that I needed to know

Do The Right Thing

The fact that the right business decision is so often obvious leads to a few actionable operational steps.

Lean Into Discomfort

If you’re torn between multiple choices, the path that makes you most uncomfortable is unfortunately almost always the right one. There’s a very strong human tendency to avoid hard decisions, so the errors you make will only go in one direction. Pay attention when you hear any of the tells below – in particular watch out for the word “just” which is a calling card for an argument that’s really an excuse:

• I know we shouldn’t make them a manager, but they really want it and it should be fine if we just do it once

• We just need to give the team another shot at this one

• The team will be really upset if we kill that project, let’s just give it a few more weeks

• We’ll be fine if we just close this next quarter strong

Gather On-the-ground Feedback

Since people close to a problem almost always know what to do, teams must be open to difficult feedback from inconvenient sources. Especially as organizations grow, the difference in comprehension between an expert who is close to a situation vs. someone who’s further away or not an expert can be night and day. Favor proximity (and expertise) over title.

A common type of error that one sees is a friendly, charismatic, highly-visible executive who is very popular with more junior members of other teams but seen as incompetent by his peers and senior staff. The senior veterans who are closest to the situation know what to do, but they avoid providing the harsh feedback because it’s awkward and seen as not worth the effort.

Data-Driven Dangers

The cult of being data-driven, particularly at huge consumer companies with non-intuitive user behavior patterns, has led many people to believe that there are non-obvious nuances to every situation. In reality, most business and management situations do not have a lot of nuance.

• The business line sucks: It isn’t showing signs of life, it’s obviously non-viable.

• An executive is screwing up: They’re probably screwing up many dimensions of their job all at once - missing numbers, weak team, cost overruns.

Being data-driven has many merits, but its most debilitating flaws are that it favors certainty over speed and trains teams to look for subtle nuances that don’t exist 99% of the time. If you know what to do, you should just do it as soon as possible rather than waiting for more information. If you’re a smart and experienced executive, don’t let the siren call of more data gaslight you into re-running the analysis on a situation where you have certainty.

Having worked with teams as an advisor/investor in the past, I’ve also found that external advisors can be very helpful to simply confirm what teams already know. Importantly, these external forces can also help informed teams to assess severity. In a pinch, one of the easier ways to get a gut check is to ask a trusted friend to rubber duck a difficult management decision with you. Just explain the challenging call to them, and have them ask occasional questions until it’s clear what to do. Some of the most useful discussions that I’ve had with companies begin with someone simply asking “is this normal?”

You Owe Your Team Decisiveness

Finally, you actually owe it to your team to make the hard calls that you know to be correct. Many leaders fall into a state of paralysis because they don’t want their team to blame them for making the wrong decision. They would do better to respect their team’s macro analysis more: everyone who joins your team is ultimately doing so because they trust your judgment on some level. Well run companies are benevolent dictatorships not democracies, and your team will respect you more for decisive action than they will for a theoretically higher hit-rate on your decisions.

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