Hard choices in business

As startup and business leaders with formal education, we are trained when facing a dilemma to look for solutions - quickly. That's what we were hired for, right?

Not so fast. Decision-making challenges come in many shapes and forms. Before rushing to a decision, take your time to understand the true nature of the situation. A seemingly rational decision can lead to disastrous results if you haven't properly diagnosed the situation.

Let's say the situation looks like a choice between A and B. 

Focus on Enterprise or focus on SMB. Set up an office hub in Atlanta or Chicago. Take investment from VC firm A or from firm B. Hire 6 new engineers or hire 12.

As the decision-maker, you may be stressed and anxious because it isn't obvious whether you should pick A or B, and both alternatives have their downsides too. You may feel you are between a rock and a hard place.

The key is to resist the immediate urge to choose and instead, diagnose the problem. Here's a framework for thinking beyond the A/B dichotomy:

1. Genuine Choice: Sometimes, it truly is an A or B decision. In these cases, make the call and move on. But don't assume this is always the case.
2. Both Are Wrong: Sometimes, the best move is neither A nor B. Doing nothing might be the right answer.
3. Option C: A superior alternative (C) might exist, one that wasn't initially considered. Challenge your assumptions and explore other possibilities.
4. Compromise: The ideal solution might lie in the middle. Instead of 6 or 12 engineers, perhaps 8, 9, or 10 is the sweet spot.
5. Polarities: This is crucial. A and B might be interdependent polarities, not mutually exclusive choices. Choosing one at the expense of the other will ultimately harm both. You must find a way to manage both.
6. Oscillating Choices: Large companies often oscillate between two models, such as functional vs. matrix organization. This isn't always about finding the perfect model, but sometimes about the value of change itself. Alternative A might represent stagnation, making B the better choice for now. Next time, the decision goes the other way.

Before deciding, consider these alternatives. Your organization will be delighted at the positive effects of your thoughtfulness.

Timing Matters too: When does the decision need to be made? Could the relative merits of A and B change in that timeframe? Should you decide now, or wait closer to the deadline?

Mastering Polarities: A Game-Changer

Understanding polarities is especially critical. It can elevate your business to the next level. My experience at MySQL illustrates this. We had one paying customer for every thousand non-paying users. Which group was more important? Both. It was a polarity.

People both inside the company and outside tried to push us to pick sides, but we refused. We realized that the better we served our user base, the more eager our paying customers became. And the more we focused on commercial customers, the more resources we had to support the open-source community. Conversely, neglecting our user base would inevitably harm our commercial success too. The model worked because we served both groups.

Tactically, individual decisions were for the benefit of either users or customers. It looked like an either/or choice. But strategically, we were always serving both. It wasn't "either/or," but "both/and."

The theory and practice of polarities was developed by a person named Barry Johnson . He built a whole business around it, helping small and large organizations to resolve seemingly impossible conflicts between priorities. 

Teams facing difficult choices are "suffering paradox" and either get stuck or overreact. Complicating the decision-making, people often view those who hold their view in terms of their benefits and those of the opposing view in terms of their overuses. The solution of navigating paradox requires vulnerability and seeing a third way that respects the worries and hopes of both groups. It is a question not only of decision-making but of leadership and change management too.

Barry mentions the post-9/11 US Department of Defense as an example. DoD realized they had to share information faster in order to react to sudden threats. But they also knew they had to protect information so that it would not end up in the hands of adversaries. It seemed to be a choice between two conflicting principles, each with their staunch defenders.

Barry Johnson helped them see this as a polarity. Effective information sharing requires robust protection. And information protection is pointless without internal sharing. They learned to work together to manage both priorities, creating a synergistic effect.

When faced with an A/B decision, first ask: Is this a polarity? If so, don't choose. Find the optimal solution that advances both options. But don't use the concept of polarities as an excuse to avoid tough choices you must make.

As CEO, you're judged by your decisions. First, understand the nature of the decision, then act. If you make a wrong decision despite careful consideration, reverse course, apologize if necessary, and make a better decision. Few business decisions are irreversible. 

When you are both adaptable and a strong decision-maker, you are ready to win.

Marten Mickos