Agile, Business Performance Consulting, Customer Development, Innovation, leadership

Stop making good decisions, start making right decisions

You usually start with this idea in your mind. . .

i'm right

You think you are right and this is a great starting point. It’s also probably necessary if you’re going to do anything. However, you also know that you do not know for certain. This is where the “Good” decision versus “Bad” decision framework comes into play.

g vs b

Good and bad

 

Essentially the more information you have, the higher the likelihood that you’ll make a good decision. The less information you have, the higher the likelihood that you’ll make a bad decision. This is a very pervasive framework, and consumes a lot of energy. Organizations will spend lots of time researching and compiling this information, and it often takes the form of a business case. Also, much of this work occurs at a workstation and very little – if any – interaction takes place with people outside of the organization.

After the business case is compiled and presented – and if people in your organization think that there is good information – you think this . . .

hpefully right

You hope you’re right, because now you have spent weeks or months building your case, and you have to launch. But if you have ever made a mistake in your life you realize that, even with a lot of information, you are sometimes wrong. So, instead of more information leading you to a successful and right decision, you often get it wrong. Why is this?

disconect

Disconnected from Customers

The reason is because a decision based on either good or bad amounts of information – regardless of its quality – can still turn out to be either the right decision or the wrong decision. A decision takes a life of its own once hit gets outside the building and people start to try to understand it, buy it, or completely ignore it. Also, shifts in the economy, changing attitudes, and simple timing can also greatly impact whether your decision was the right or wrong. The key here is that a “bad” decision – i.e. one based on little information – can still turn out to be the right decision, and a “good” decision can still turn out to be the wrong one. What also starts to happen is that what happens outside of the building feels disconnected to what is happening inside the building; with the consequence being the work you are doing has very little influence on what is happening outside of your walls and vice versa.

What typically happens next is something David Bland has called the “Product Death Spiral” (image below), where you ask customers what they want, they tell you, and you build it, and spiral out of profitability and existence.

death cycle

Product Death Spiral – David Bland

 

So what can we do? We can spend more time collecting information inside the building – more data analysis, etc. – or we can get outside and start testing our idea as early in the process as possible. This early interaction with customer is part of something called ‘customer development’, and is a way to indicate early on whether your decision will be the right one, and not simply a good one.

What we need to do to break this cycle is engage on the “right” side of the diagram as early as possible, using the insights and information we gather directly from customers to inform and shape the date we collect. By doing so we can “get to right” quicker, produce better and executable insight, and create opportunities for genius to express itself in the solution design.

Here’s the overall framework:

overall framework

Overall Framework

As illustrated above, the key is to connect the two gears. The world outside of your building needs to drive the work inside your building. By doing this you can focus on getting to the “right decision” by creating better information.

You simply need to engage and immerse yourself into the real world of your customers before you build anything.

 

Chris

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