The Algebra of DecisionsFebruary 4, 2022
This has been a week of difficult decisions. I walked away, for now, from a long-time business partner and watched another be fired. It’s been draining, and made me think about decision-making. Specifically, how to make better ones.
When I was younger, I embraced (subconsciously, as I was sleepwalking through life) the notion that you can make any decision the right one through leadership and persuasion. I was more focused on proving my decisions were right … because I’m awesome … than on making the best ones. Granted, there’s a benefit to making decisions quickly, as speed can compensate, somewhat, for misdirection. But there’s being decisive, and then there’s being allergic to course correction. People often mistake this for being principled … it’s not. Your decisions are a guide and an action plan, not a suicide pact. Be open to evolving, changing your mind when presented with new data or compelling views and insights. A step back from the wrong path is a step in the right direction.
Ideally, it’s better to make the right decision in the first place. Your instincts are a decent guide to survival and propagation, but a complex world offers exponentially more challenges and rewards. I’ve learned I need a framework — a set of values that help define how I want to live my life and serve as a lens through which to filter my thinking. It’s the key to navigating by starlight and developing greater situational awareness. I just read the last sentence and feel like maybe I’m trying too hard. Anyway.
My fifth-grade teacher used to say, all the damn time, “You Matter!” No, not necessarily. Your actions matter. It’s easy for a person to be near-meaningless and, if you’re unlucky or choose to stay on the sidelines, to not touch anybody else’s life or happiness. Every action — and every inaction — is the product of a decision. A framework doesn’t guarantee that every decision will be right, but it will help you speed decisions, build trust with others as they know what to expect, make your actions count, and ease the pain of bad decisions as they are authentic.
The hardest part is developing your framework, as it requires identifying a set of values and/or ideologies you believe in. You have to trust these values more than you care about the outcome of any one decision, or you’ll override them whenever the going gets tough. Ultimately, tested by time and decisions made, these values become your filters — an algebra of decisions, if you will. Note: I’m not advocating for any particular set of values, only urging you to identify and frame yours. So, here’s my Algebra of Decisions: CSAM.
I’ve spent the majority of my waking hours trying to choreograph human capital and technology to create a differentiated product or service so I can charge more than the cost of the inputs. Growth and margin create stakeholder value via cash flow, enterprise value, and (I hope) meaningful work. The full-body-contact violence of competition creates prosperity that gives people and their families economic security, options, and the ability to help others. It also gives us a say in our society. I choose not to eat at Chick-fil-A, as I don’t care for ownership’s social commentary. Competitive markets, the key to capitalism, allow me to opt for In-N-Out instead. (#Awesome.)
It’s important to note that without robust oversight, the wealthy and powerful will overrun the system. When we ignore the externalities of capitalism — hoarding, failing to invest in the middle class, lacking compassion for those left behind — we end up with a G-7 nation that has the greatest inequality, polarization, and Covid mortality. But that’s another post.
Capitalism’s superpower is mutual prosperity brought about by self-interest. However, we all need allies. There’s a cartoon of a billionaire Monty Burns type who lights cigars with $100 bills and pours mercury into the river. It’s just that, a cartoon. I used to see most business relationships as win/lose. Successful capitalists create allies along the way. Capitalists ask how can we be great partners, they execute, and they ensure they’ll benefit from the value created.
Competition and conflict is best hammered out in the marketplace. Strife between people is deadweight. In 30-plus years in business I’ve never sued or been sued by anybody. If I feel I’ve been treated poorly I don’t work with them again. That’s my choice. Your anger at a person or party is a weight, and becomes an ailment — even debilitating — the longer you hold on to it.
This week, I flexed my capitalist muscle, and pulled the Prof G Pod from Spotify. I’ve spent much of the week working through an articulation of why, but Roxane Gay took the words out of my mouth in her superlative New York Times opinion piece … if my words were 10 times more eloquent and powerful.
In sum, I evaluate business decisions through the lens of how we can further differentiate the product and strengthen the relationship. That is my cocktail of prosperity.
Much of what we encounter in life is outside our control. What can we control? Our beliefs, judgment, and desires. As Ennis says in Brokeback Mountain: “If you can’t fix it, you gotta stand it.” Be aware of your emotions and passions and try to disarticulate them when making a key business decision.
I have found emotions are the enemy of investing. Whenever you’re inclined to sell a stock or business, the other side feels the same way, and it therefore may be a good time to hold or buy. The recent market selloff taps into a basic instinct of wanting to avoid any more pain (i.e., sell). Try to ignore your emotions and realize the market is likely picking up billions of similar sentiments at that moment and reflecting them with depressed, or inflated, valuations.
This one is difficult for me. I struggle with anger and hold grudges against people, places, and things. But cultivating an apathy toward antagonism is liberating.
This week, CNN fired its CEO, Jeff Zucker, after he disclosed that he’d been in a consensual relationship with a subordinate for some years. I had no knowledge or input into that decision, but Zucker and CNN are important business partners for me, and I like and respect both the man and the organization. I had a range of emotional responses to the news; a younger version of me would have aired them, probably taking three different positions on the issue and pissing off everyone relevant to me. But the reality is that I don’t know what happened in that boardroom, the decision had nothing to do with me. All I can control is my response. At a minimum, I can continue to like and respect the man and the organization. Note: Be loyal to people, not to organizations.
An easy one. Don’t make an important decision without getting input from others. Perspective matters … it’s difficult to read a label from inside the bottle. A mentor isn’t necessarily someone smarter than you, and they likely won’t know more about your situation, but their standing outside it is what’s valuable. Besides, the ask itself matters. Asking for someone’s advice is an expression of trust — that’s why it’s intimidating. Trust builds trust and deepens relationships. Seek counsel, and your mentor will be invested in your success.
Asking for advice doesn’t mean you have to take it. Often, what’s most valuable about advice isn’t a recommended course of action, but the questions a mentor asks you — pressure testing your reasoning. You might not follow their advice, but don’t ignore what they say. Another benefit? Your actions post-decision will be more refined, because you’ll have a preview of their impact on others.
The most useful construct in my life is … death. Specifically a 99.9% certainty (you should never be 100% certain of anything) that there will be a moment when I look into my boys’ eyes and know our relationship is ending. And that’s OK, as it motivates me and provides perspective. I can see my death. I was 25 yesterday, and I’ll be 84 tomorrow. I know the people, photos, music, and drugs I want to have around me at the end, and I can imagine, and even feel, my thoughts at that moment. It’s the closest thing I have to self-awareness.
As Frida Kahlo said: “I want my exit to be glorious, and I don’t want to come back.” Putting myself there, at near-death, helps me sort through life and weigh the decisions that will give me peace. I know at the end I’ll be more upset about the risks I didn’t take than I will about the fallout from ones I did. That it will give me joy that I kissed my boys every day, let my dogs on the couch, and dressed up as Elizabeth Holmes on CNN+. I’ll be angry that I was so angry so much, and disappointed that I let fear, or my need for people’s approval, get in the way of living out loud.
Wading into public controversies and stepping back from important business relationships are both fraught but necessary expressions of values. I will be subject to pushback, accusations of censorship, etc., but I’m focused on what I can control and how I can exercise my capitalist muscles. I reached out to several people to get their input. And I know that at the end, the only thing I’ll remember is I tried to do something.
Life is so rich,
P.S. We’re headed to Miami next weekend. (Finally.) Last chance to come turn up the heat with me. Purchase your tickets here. I look forward to connecting.