When deciding about the long-term success of your organisation, you perform an intricate balancing act of understanding the alternative directions open to you, the criteria on which you will evaluate outcomes, the outcomes you will prefer and the information that will improve your odds of succeeding.
Sometimes unusual strategic moves become your best decisions – for instance, when you partner with your competitor, and enable opportunity that would otherwise not exist, or you drop long held believes about how to manage people, and suddenly have a workforce that is willing to go beyond what they’ve done before.
Sometimes opportunities are lost through your decisions – for instance when you pass by an acquisition of a business that becomes the new way of how things are done.
Think for instance how Blockbuster failed to acquire Netflix in the 2000s, which now in 2016 has achieved a market cap of US$ 41.31 billion, while Blockbuster was liquidated in 2013. Decisions can result in opportunities lost through what some ascribe to lack of vision.
Clearly strategic decision-making requires a complex set of skills – such as vision, systems thinking, understanding opportunity, aligning to the market – to mention only a few. But, to master strategic decisions we firstly need to master choice.
The dating and “social discovery service app” Tinder offers a good learning ground for understanding choice. In simple terms the first step in Tinder is a choice between ‘like’ and ‘dislike’, ‘yes’ and ‘no’, where you swipe the faces of complete strangers in opposite directions, based possibly on how symmetrical their faces are and the absence of clear signs of psychopathic traits online.
This first step is based on simple heuristics, ‘mental short cuts’, that help you to, based on minimal information, select between what is acceptable and less acceptable. In strategic decisions, executives also use short cuts such as choosing best first option, meeting minimum criteria, or adoption because it reminds them of a successful similar moment in the past.
Whilst these types of heuristics can reflect common bias, they also help executives to save time and determine criteria of acceptability. Therefore strategic decision need to hinge on a clear and joint understanding of what are acceptable behaviours and outcomes and what are not.
The second thing that happens on Tinder is that someone may match your interest. This creates an important filter between where you are able to play and where your offering will not be valued. A mistake many top teams make in their strategy sessions is to plan in isolation, forgetting the constraints of where the company is wanted and where not.
A company cannot be all things to all people, and should also not create plans separate from the changing needs of the market. Strategic choice therefore requires an understanding of where you can really add value, and where others should rather work.
After a match has been made on Tinder further vetting of suitability takes place through short communications, phone calls and ultimately the meeting in person, where the biggest consideration is whether the Tinder profile matches the face of reality.
This process is one of reducing uncertainty. It is a subconscious and conscious comparison of expectations. Likewise the executive decision makers require reasonable expectations of returns as decision criteria. With that they need to be sure about the guiding principles that govern their choices – what they are willing to do or accept as embedded in their values. If integrity is such a value, the options in strategic choice become more focused, and the effect of uncertainty reduces.
Next, on Tinder there comes a moment where one of the parties decides to move forward or not. This follows from understanding whether to explore more options or to establish direction and action. Business leaders too have to reach a point of either choosing to create more options and choose a strategy that is better than the one before, or to move forward with the current and see how things evolve.
To know the difference between these two directions they need to have a clear understanding of the vision of the ultimate outcome of the company, and keep this foremost in their minds.
As all companies that don’t reinvent themselves come to an end, the conversations in the organisation should be permeated with a need for purpose, a reason for being, and why you are in business in order to be able to almost instinctively understand which direction will work.
Finally on Tinder and in business there are moments of extraction, when one has to say good bye to good intended strategic plans. Many executives fall to the bias of endowed progress, putting more into failing strategies because of all the effort that had already been put in.
Strategy entails several options such as immediate entry or exit, delayed entry or delayed exit, unexpected options, or getting the best of all worlds. Decision-makers need to know when to step back and cut losses and when to push through and not give up.
The difference lies in on the one hand understanding that we cannot always see how the activities of today may enable the opportunities of tomorrow and on the other hand to know that a well-developed intuition is an important source of information even for strategic decisions.
1. Rule of infinite options
When making decisions understand that there are infinitely more options than you can think of, but choosing the best available option will probably suffice.
2. Rule of guiding principles
If it is against your core values, don’t do it.
3. Rule of deciding to decide
It is better to take action through decision than to not take action at all.
4. Rule of relevance
If your strategic choices are inward looking rather than outward looking and forward looking, they will fail.
By improving the way we choose we can ultimately enhance our strategic decisions and trajectory of our firms. There will be mistakes and there will be lessons learnt, but by knowing the criteria of good outcomes, where you can really add value, aligning values and purpose, and tapping into both the best information and your intuition, there is no need why better things may not be realised.