Excerpt from Chapter 6 No Aim, No Gain - How to Achieve Clarity of Objective
Why Bother Defining Decisions?
What happens when we do not define a decision?
Usually, after we implement a haphazardly selected solution, we are surprised at the result-that it is different from what we expected and wanted. As a consequence, much valuable time that could have been spent in achieving the initial business objective is lost, not to mention the wasted energy and other resources. Very frustrating! In addition, we have to put more time and resources into implementing another solution.
Let's take two examples of a similar decision in two different companies. Both companies are start-ups that have grown to several million dollars in revenue and are at a point in their development when a professional management team needs to be put in place. Both are starting with the first major position to fill-the VP of Sales. Let's examine the differences of how these companies went about selecting a candidate for the position.
Company A has bootstrapped itself, is profitable, and has accumulated some reserve money. However, at the time of the decision, the company has been losing money for the last three months, making the founders (Tom and Steve) uncomfortable and making them question the timing of the decision.
Tom and Steve spent a lot of time interviewing candidates. They also spent money to hire a recruiter in order to identify a good candidate. The finalist was a mature, experienced individual from their industry who, they felt, could do the job. One of the important factors that Tom and Steve focused on was the candidate's ability to put together a sales strategy for the company and then assemble a team to execute the strategy. Tom interviewed the finalist at least 10 times. To this day, he cannot say what was bothering him, but something was.
Very shortly after the person was hired, it became clear to Tom that he was not performing. Tom was wrestling with the question "Should we fire the guy, or are we being too impatient? Have we given him enough time?"
Finally, Tom and Steve decided to talk to the new VP. Together, they developed specific sales group objectives for the next month. Nothing really changed in the new VP's results or approach after the meeting. In Tom's words, "He was approaching his job as if he was in a large company and had tons of time to develop strategy and think about the organizational structure for the future team. But we needed deals, we needed revenue, and this was not happening." Two weeks after the objective-setting meeting, they let the new VP go. The founders reached the conclusion that "The guy talked the right talk, but could not execute."
Company B is similar to Company A in its stage of development. Its founders had previously closed all sales deals themselves. The company is not profitable but has recently raised several million dollars in equity from a venture capital firm.
Four people were involved in the interviewing process for a new VP of Sales. They went from 20 candidates to three and then two. Three people were backing one candidate (Jack), and one was backing the other (David). Jack was polished, mature, from the same industry, and a strategist, while David was an aggressive, "hungry" football player, not brilliant strategically. They finally hired David, and, so far, everyone is happy with this selection.
The selection was made based on one factor-the fit between the individual and the company's needs in its stage of development. Even though the team liked the strategist Jack, they realized that the company actually needed the aggressiveness of execution. They were "hungry" for immediate deal closures and more revenue, so a "hungry" David was a better fit. They also realized that David might not remain their VP of Sales as the company grows and enters a more mature stage of development.
What is the difference between these two companies in making a similar decision? The difference is in the clarity of the decision definition-the articulation of an objective and constraints in the case of Company B. Company B knew that they needed fast execution and revenue, and they hired the appropriate candidate. Company A did not define their needs clearly. They were under the impression that they wanted a mature strategist, but when this person focused on developing a strategy, they realized that they needed fast execution first. It is hard to move effectively when you don't know where you are moving or whether you will get there.
Not only did Company A spend time and money in getting to the current disappointing result (it is back to square one), but it also needs to find another VP of Sales, another time-consuming and costly process. This is a very high price to pay for not spending a couple of hours or, at the maximum, a week on defining a decision!