Decision making – one of a founder’s top priorities


I keep a lengthy file of topics for this blog. Sitting in the list, gathering dust, is “postmortems and premortems” – a topic I haven’t gotten to, probably because I hadn’t come across a relevant article or book. But Sunday’s New York Times provided both. Steven Johnson, a prolific writer about science and the history of innovation, has a new book coming out, Farsighted: How We Make the Decisions That Matter the Most, and he contributed an essay based on the book to the Sunday Times.

I thought I had invented the term “premortem” but it looks like psychologist Gary Klein got there before me. I came up with the term for two reasons: one, at the software-driven companies I worked at we held postmortems on shipped products. The focus of these meetings was constructive criticism: what did we learn from developing and launching the product? What can we do better with the next version? With the next new product? Startups are learning machines and one of the best ways to learn is with a structured, focused examination of your product development, marketing and/or sales events. The second reason I came up with the idea of a “premortem” is from an article that advised entrepreneurs that a good exercise for the founders in the early stages of the startup would be to make the assumption that the company had failed in X years. Then to brainstorm about why it had failed with the goal of “going back in time”, e.g. to the present, to fix those problems and save the company! This same technique could be applied just as well to shipping a product as to starting a company.

Here’s Dr. Klein’s explanation of the term:

As the name suggests, the approach is a twist on the medical procedure of post-mortem analysis. In a post-mortem, the subject is dead, and the coroner’s job is to figure out the cause of death. In a premortem, the sequence is reversed: “Our exercise,” Dr. Klein explains, “is to ask planners to imagine that it is months into the future and that their plan has been carried out. And it has failed. That is all they know; they have to explain why they think it failed.”

I’ve written about this decision making twice before: How do you make decisions? and How to make decisions, or how to avoid the deadly embrace! and I’m sure I’ll be writing about them in the future, for as I’ve told my mentees, startups are a decision machines. You’ll make more decisions at a startup than during any other period in your life, guaranteed.

One of my sayings is “He who has the most options, wins.” Apologies for the use of the mail pronoun.) Research by Professor Paul Nutt supports this supposition:

Over the years, Professor Nutt and other researchers have demonstrated a strong correlation between the number of alternatives deliberated and the ultimate success of the decision itself. In one of his studies, Professor Nutt found that participants who considered only one alternative ultimately judged their decision a failure more than 50 percent of the time, while decisions that involved contemplating at least two alternatives were felt to be successes two-thirds of the time.

The upshot is clear: If you find yourself mapping a “whether or not” question, looking at a simple fork in the road, you’re almost always better off turning it into a “which one” question that gives you more available paths.

Another interesting research finding that Steven Johnson writes about is that more diverse groups generate more and better options. This is but one powerful argument as to why we need more people of color and more women on boards of directors and in decision-making positions in startups. Keep this in mind when you are recruiting your team – diversity has strong business benefits, it’s not just a “do-gooder” exercise.

The issue I’ve been thinking about during the past week as I mulled over the premortem, postmortem idea was once you have all those options for your decision how do you choose amongst them? The obvious answer seemed to be by weighting criteria, and sure enough, Steven Johnson concludes his article with methodology of weighting your options by the list of values important to you and then running different scenarios for each option. You then grade the outcomes on how well they would address your core values.

One decision I made after reading Mr. Johnson’t article didn’t require sophisticated scenario planning – that decision was to go to and order his book!


Author: Mentorphile

Mentor, coach, and advisor to entrepreneurs, small businesses, and non-profit organizations. General manager with significant experience in both for-profit and non-profit organizations. Focus on media and information. On founding team of four venture-backed companies. Currently Chairman of Popsleuth, Inc., maker of the Endorfyn app for keeping fans updated on new stuff from their favorite artists.

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