Jeff Bezos’s decision making advice

I read about Jeff Bezos’s Day 1 letter before. I believe most people know him. He is a CEO and founder of the largest online store in the world – I read it again yesterday and am still fascinated with his thoughts and advice on how decision making process should be.

Jeff’s Day 1 philosophy is that we should always have an entrepreneurial, start-up mindset. Making high-quality, high-velocity decisions is part of his philosophy. It’s not easy especially in an established company with lots of layers. Here is what high-velocity decision making process looks like, according to Jeff:

  1. Never use a one-size-fits-all decision-making process. Management or all of us must understand that many decisions can be reversed. You just need to correct a bad decision you made. Not all decisions cost millions of dollars to the company.
  2. 70% of information should be sufficient for you to make a decision. You will never get all the information you need to make decisions. If you wait until you get more than 90% of information, you would probably be too slow.
  3. Disagree and commit. Not everyone would agree with everything. Remember this – you should expect common action, not a common census. Even if you disagree but the team has valid reasons to proceed, you should be fully committed to that decision.
  4. Identify true misalignment early. This is very important. The true misalignment comes from the team having different objectives and expectations from a project. No amounts of discussions or meetings would solve this issue. You need to go back to clarify the goals, the objectives of the project before you can proceed with any decisions.

This is the part I like the most from Jeff – “you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.


The Worst Case Scenario

How do you make tough decisions? Do you require all the information in the world before making any call? Making decisions is something that all leaders have to do. People, more specifically your subordinate, judge you based on this skill.

Some of them judge you if the outcome of that particular decision is not so good. Some of them judge you if you don’t make a decision or eventually make it but it’s too late. Decision making is an intriguing activity.

If you ask me, I make lots of decisions. I make them all quick, I don’t normally take longer than a few days to make any decisions, big or small. I am not saying that all the decisions I made were correct. Many of them were not. But, it is unforgivable for a leader not to make decisions. My tips? Very simple,

  1. I gather all information, in my brain library and other sources. Once the scale of information reaches about 80%, I am ready to make a call.
  2. I create “the worst case scenario” of what would happen if things go south. Can I accept or manage the situation? If I can, then no reason to slow down on anything.

My team or my colleagues always hear me ask “what would be the worst case scenario?” Can we handle it? What preventive actions do we need if things don’t work the way we want? Waiting for a decision to be made is super frustrating. It’s your job to make the damn decision.