How to make better business decisions

DFN: A primer outlining a process striving for making better business decisions.

How To Think Like Bill Gates
Dec, 2, 2009
http://sourcesofinsight.com/2009/12/02/how-to-think-like-bill-gates/comment-page-1/#comment-30373

Over the years, I’ve asked various people at Microsoft about how Bill Gates thinks. I’ve asked people from his speech writers to people that have gone survived his executive reviews, where Bill is known for his grueling interrogations. I was always curious how somebody of that caliber flexed their mind and used their skills to slice and dice problems.

Bill Gates sees and thinks differently than most people do. He has an amazing ability to find the flaws, or see opportunities, or connect the dots. He can zoom in to details with precision or zoom out to the big picture. He can flip back in time or fast forward to the future. He also has the ability to focus on the merits of the idea or innovation before worrying about the business case. Chances are, you could benefit from Bill’s thinking skills, even if it simply means getting a new perspective on your problems. Whether you’re trying to change the world, or you want to unleash your best, it doesn’t hurt to be able to leverage the thought patterns of a billionaire and one of the world’s most influential philanthropists.

10 Ways to Think Like Bill Gates
While I don’t think Bill will lend you his brain, you can do the next best thing. You can take some of this thought patterns and practices for a test-drive. Here are ten patterns to get you started:

Prioritize. “What’s the next best thing you should be thinking about?” It starts here. Time is your most limited and precious resource. This is about asking whether the problem is even worth your time. Before you throw cycles at it, figure out whether it’s worth it. Is it significant? How much time should you spend on it? For an example of how Bill Gates figures out how to prioritize, check out the following video: Bill Gates on Mosquitoes, Malaria, and Education.

Ask smarter questions. If you want better answers, ask better questions. Rather than getting stuck in one line of questioning, such as “what’s wrong with this?” or “what’s right with this?”, you can explore your thinking more deeply, by asking a range of questions. One of the skills we learn at Microsoft is Precision Questions / Precision Answers. In this approach, there are 7 categories of precise questions: 1) Go / NoGo – Do we need to talk about this? 2) Clarification – What do you mean? 3) Assumptions – What are we assuming? 4) Basic Critical Question – How do we know this is true? 5) Causes – What’s causing this? 6) Effects – What will be the effects? 7) Action –

What should be done?
Make data-driven decisions. This is one of the toughest switches to make. By default, most people make emotional decisions and then find data to support the decision. This means asking questions like, “what’s the data say?” This means getting informed, before you make your decision. This means evaluating the sources of data. It’s an extreme exercise in emotional intelligence to pause your emotional response, while you check your logic and critical thinking.

Divorce your ego. This is where you separate yourself from the problem. This is also about separating yourself from the solution. Instead, you hold the problem or solution out in your hands and inspect it from different angles. Rather than focus on whether you’re right, it’s about whether the solution is right. It’s about being able to beat up the thinking, without taking it personally.

Frame the problem. Framing a problem is simply how you look at a problem, just like how you frame a picture. It’s about choosing what to focus on, what’s in and what’s out. When you frame the problem, you bound it. Framing also helps you get a better perspective on the problem, as well as share the problem more effectively with others. Some questions to help frame a problem include: Who’s the customer? What are their needs and priorities? What’s happening in the market? What are competitors doing?

What are our options for responding? How do we differentiate? How is technology changing and what possibilities does it offer our customers? What are the priorities for our business?

Get perspectives on the problem. This means being able to switch your perspectives. Rather than see the glass half-full or the glass half-empty, you should see both. Challenge yourself to switch back and forth from finding flaws to finding opportunities. If you only know how to play the Devil’s advocate, you have a limited view. Like a multi-faceted diamond, you should be able to look at the problem from different angles. This also means being able to broker in experts and get other people’s perspective on the problem. Problem solving is a team sport. It’s also about leveraging smart people without domain expertise. For example, you can take a dev manager in consumer devices and have him/her move into the enterprise or business applications.

Model the problem. By abstracting the problem into a model, you can think about it in simpler ways, without being bogged down by the implementation details. One of Bill Gate’s favorite tools is his whiteboard. A whiteboard makes it easy to sketch out ideas and visualize them. A whiteboard can help whether you’re trying to map out the problem or draw a solution. Keep in mind that George Box taught us that, “all models are wrong, but some are useful.”

Think of the system and the ecosystem. Bill Gates has an engineering mind. He can see the problem as a system. You can map out the system by asking yourself questions along the line of, what are the bits and pieces? … How does it work? … How do the bits and pieces work together? … what’s the flow through the system? … what are the inputs and outputs? After you have a handle on the system, you can ask yourself about the ecosystem or the system of systems. You can think about the

Think of the problem over time. It’s easy to look at the problem and just see it as a static snapshot. The challenge is playing out the problem or your solution over time. Time can dramatically change what it looks like. Consider the impact of trends. Consider sustainability. Some things that look good only temporary, and really break down when you apply time to them. Sometimes time is on your side. You might find that there may be better windows of opportunity.

Think strategically. Strategy guides your actions. You can think strategically along different lines. Consider the core of what you do (mission, vision, values, and goals.) Consider internal analysis (strengths and weaknesses, resources and capabilities, and benchmarking.) Consider external analysis (competitive analysis, opportunities and threats, and industry conditions.) Consider the organization design (structure, controls and incentives, culture and people.) Consider execution (roles, responsibilities, resources, action plans, measurement, and accountability.) Consider functional strategies (marketing and sales, operations, human resources, and R&D.) Consider strategic choices (corporate strategy and business strategy.)

If these thought patterns and practices don’t stand out as different or extraordinary, contrast them with some common default patterns:

less focus on emotional intelligence and more driven by emotional reaction
more likely to start thinking about a problem before asking which ones
more likely to ask a limited range of questions, from one specific angle or perspective (such as Devil’s advocate)
more likely to get lost in the details of the problem rather than step back, model it, and play with possibilities, unlikely to see the challenge as a system or think about the ecosystem (the players, the key levers, the centers of gravity … etc.)
unlikely to think about the problem over time (especially larger time frames like 1 year, 3 years, 5 years … or consider trends)
unlikely to think strategically over tactically, or get mired in tactical details before evaluating strategic options and differentiators, strengths, or weaknesses.

The good news is, thinking is a skill and there are plenty of resources that we can use to improve our thinking techniques. One of my favorites is Edward de Bono’s Six Thinking Hats.

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