Last week I had the privilege of attending an event with Supreme Court Justice Stephen Breyer. It was an incredibly inspiring experience at a remarkably challenging time for our country and the world. One of the most resonant things Justice Breyer shared was that the best thing you can ever say about a judge is that their decision is “sound”. A reflection of a thoughtful and deliberative approach independent of bias or politics. With that, Justice Breyer shared the 6 principles that constitute his interpretative philosophy or the method by which he makes decisions. I couldn’t help but contemplate how these same principles apply outside our highest court and discovered in my reflection that his principles work incredibly well for business and life. Enjoy this bit of wisdom from one of our wisest elders coupled with my perspective and experience.
The 6 Principles of Sound Decision Making
Text: Text in a judicial sense is of course the constitution. The constitution serves as a Framework for interpretation and decision making. Frameworks can help us simplify and apply data and focus on how best to organize it to make the best decision. When making a decision, applying the right framework can be a critical help to choosing the right path. Frameworks range from the decision making type like the Eisenhower matrix, to behavioral like game theory or strategic like Christensen’s disruptive innovation. Identifying the right framework can lead to faster, clearer, and more consistent decisions.
Example: When making a decision on whether or not to preemptively initiate a lawsuit against a competitor who was larger and better resourced than us and one that would have a massive impact on our company, I stopped to teach our lead attorney about game theory and specifically the prisoner’s dilemma. It was a great exercise to map out all of our possible moves against our competitors to determine what the right course of action is. Applying the framework allowed us to quickly determine that the lawsuit was the right course of action amongst all the possible scenarios. That right decision combined with great execution by Peter led to protecting our core technology and preserving the strength of our business.
History: Those who fail to study history are doomed to repeat it. History can always be a guide. What have similar circumstances and actions yielded in the past and can help us evaluate our decisions. It’s important however to note how things relative to current circumstance and make sure the other history related axiom doesn’t take hold: Historical performance isn’t indicative of future results! The world is constantly changing and while being a student of history is important, it’s important to note as the rate of change in technology and business continues to accelerate, history is informative but not decisive.
Example: When it came time to decide what our brand positioning would be on a product launch we had to consider history. The market we were launching in operated on two metrics that weren’t very relevant for us: technical features and relationships, neither of which we could win on. In this case following history puts us at a disadvantage. By choosing a differentiated positioning based on our strength, we were able to shift the field towards a world that was better for us and for the patients and customers we served.
Tradition: Until Westworld becomes a reality, we live in a society composed of human beings and all human beings have expectations. Whether making a professional or personal decision tradition can weigh heavily on how that decision is perceived and ultimately how successful it can be. Going against tradition needs to me managed and messaged carefully helping people see why the future is better for that departure from the past.
Example: When I was an engineer, we were hit with a surprise. One of our competitors launched a product about a year earlier than we anticipated instantly obsoleting a recent product launch. So we had to get cracking! We had to essentially do in 6 months what typically took us 18-24 months of design and verification work. What made it more challenging was our VP of R&D was an old school engineer, and insisted that all firmware design be done in assembly language vs the more modern language C. Now I loved assembly language as much as the next guy or gal but there was no way to get this project done on this insane time scale without using C as assembly took orders of magnitude more time to code. So I proposed we write the code in C and convert it later in assembly. With the safety of that back stop we got to work and as at the project progressed our VP gained confidence in C and we never went back. Acknowledging tradition rather than fighting it while finding a path to move forward was critical. It took a lot of late nights ending at 2am but we achieved our goal and launched our competitive product in record time!
Precedent: One of the most under appreciated things about decisions is precedent. If we do this what precedent are we setting and does that create other problems down the line? This is especially true when it comes to people related decisions like promotions and parenting. Precedent also matters quite a bit if you’re part of a public company. When you announce revenue, do you choose to pre announce ahead of a conference, what metrics you share sets a precedent. And any deviation from that precedent is taken as a sign by analysts and investors. It also matters when you’re establishing a culture. In fact precedent is the essence of culture in that every action can reinforce or undermine a value.
Example: Culture is a reflection of the values you value as a leadership team and as a company. Ultimately those values are exhibited as people decisions. And with each people decision you make you’re setting a precedent. Does work ethic matter? Does integrity matter? Does teamwork matter? Every time you hire or promote someone who exhibits those values you’re establishing your culture by setting a precedent. This is what it takes to succeed in this company. Every time you fail to hold accountable someone who does not exhibit your values, you’re also setting a precedent. People decisions are ultimately that precedents that people monitor to learn the culture and operate within it, make them thoughtfully.
Purpose of a Statute: What is the objective we’re trying to achieve with this rule? This is perhaps best captured by the classic elevator problem. You own a building and get frequent complaints that the elevator is too slow. If you focus on the letter of the feedback you would need to rip out the elevator and install a new, faster one at great cost and inconvenience as elevator capacity would be reduced. But what if you focused on intent. What are the complaints telling you at their core? They’re telling you people are bored while waiting for the elevator. When understanding the purpose alternative solutions become a reality. Installing a mirror can reduce boredom and address the problem without the costs of the alternative. Purpose is a powerful tool in solving the right problem.
Example: One of the core things to focus on while scaling a growth organization is bureaucracy. It creeps in as rapid growth causes things to break and rules are installed to deal with the problems. The challenge is rules accumulate over time creating bureaucracy and driving out top performers. One way to deal with this is to understand the underlying reason something broke, as in the elevator problem, and ensure you address the core issue. An example was early in a commercial launch we had an issue with our commission plan and our sales ops team wanted to create a rule whereby all such issues would be dealt with automatically. But as anyone who knows sales knows, every sales person, territory, quarter, etc. is different. So rather than institute a rule, we created a 30 minute meeting at the end of every quarter to review issues and come up with solutions. That allowed us to manage by exception in an efficient way without being a slave to an indiscriminate rule.
Consequences of Competing Interpretations: What is the long and short term consequence of the interpretation. In law, that is understanding both sides of interpreting the law or statute to ensure you know the consequences of your decision. This works to overcome confirmation bias or the tendency to only look or things that confirm one’s view and ignore anything that counters our views. This is critical to good decision making and it’s no surprise that a Supreme Court Justice ensures they have a principle to help them overcome this bias
Example: Often times in business there’s no clear answer. This is particularly true in venture capital and entrepreneurship where you’re making decisions with very little information and there’s a lot of ambiguity. In my experience in venture, companies rarely fail due to failure of the underlying technology. They often fail due to poor strategy or poor decision making leading to bad execution and ultimately the inability to raise money. And this often all happens due to confirmation bias and not understanding competing interpretations of the future. Making decisions on a business strategy thinking the world would play out one way for it to play another is a recipe for failure. Taking the time to understand the competing interpretation is critical for success.
Conclusion: That is a lot to digest. More than anything ensuring you have a process for making your decision is key. For me it involved a lot of the above on reflection. But perhaps more importantly I’ve always surrounded myself with great people that served as a sounding board and advisors that helped me enormously in every decision I made. That includes my family, friends, colleagues, and mentors. As the proverb says, if you want to go fast go alone, if you want to go far, go together. And Justice Breyer certainly referenced that often times Justices learned a lot from each other in deliberations. So having the right process, incorporating the appropriate framework and coupling that with the right people around you can enlighten your path and lead to sound decision making. Here’s to better decisions.