Excerpt from the book Made to Stick by Chip and Dan Heath
Most people in an organization aren’t in charge of formulating strategy; they just have to understand the strategy and use it to make decisions. But many strategies aren’t concrete enough to resolve a well established psychological bias called decision paralysis. Psychologists have uncovered situations where the mere existence of choice, even choice among several good options, seems to paralyze us in making decisions.
Barry Swartz in his book The Paradox of Choice has covered the idea of Decision Paralysis in detail.
Heaths write —
Every organization must make choices among attractive options: Customer service versus cost minimization. Revenue growth versus maximizing profitability. Quality versus speed to market. People development versus the needs of the quarter. Mix together lots of these tensions—an atmosphere full of potential opportunities and risks and uncertainties and incomplete information—and you’ve got a recipe for paralysis.
Organizations, in formulating their strategies, must grapple not just with competitive advantage but with their internal capabilities. What capabilities do we need in order to grow? What skills will our employees need to successfully please customers, and how will we get better at serving our customers over time? An example of strategic language that speaks to internal capabilities comes from Thomas Alva Edison, the inventor of the phonograph and the light bulb. Edison was not a lone inventor; he created the first industrial R&D lab in Menlo Park, NewJersey. The researchers in his labs were called “muckers.” The term comes from two slang phrases of the time—“to muck in” was to work together as mates, and “to muck around” was to fool around. Why was this a good way for Edison’s researchers to talk strategy?
In any entrepreneurial organization, there’s a natural tension between efficiency and experimentation. Innovation requires experimentation and freedom, and it necessarily involves dead ends and wasted time and errors—all of which, in turn, will reduce efficiency. Edison’s environment, then, is ripe for decision paralysis: How do we decide between efficiency and experimentation? Efficiency promises reduced costs, better margins, and more orders. Experimentation promises new products and other opportunities. How do you choose in the myriad daily situations where the conflict will arise? (E.g., “Is it okay to spend the next hour of my time fooling around in the lab?”)
The term “muckers” is a strategy statement masquerading as a nickname. It makes it clear that, given the tough choice between efficiency and experimentation, you choose experimentation. Why? Because you’re a mucker. Muckers don’t obsess over Gantt charts. Muckers muck. And muckers muck because that is precisely the organizational capability that will make Menlo Park successful. Talking strategy in a thoughtful way can relieve the burden of decision paralysis.
Among all the contemporary business leaders, no one can outdo Jeff Bezos when it comes to communicating and explaining business strategies. He says that high velocity decision making requires a different framework. In his 2015 letter to Amazon shareholders, Bezos wrote —
There are some decisions which are irreversible. They’re like one way doors. The consequences of these decisions can’t be undone. You have live with them for all your life. Bezos says that such decisions should be made methodically, carefully, slowly and with great deliberations and lot of thought. These are Type 1 decisions.
But most decisions aren’t like Type 1. They are changeable, reversible. They’re two way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly.
As the companies become bigger they have a tendency to adopt the Type-1 decision making process for all decisions. As a result, Type 2 decisions also get slow. There’s unnecessary risk aversion and people stop experimenting.