Clarifying Questions to Help Break Through Decision Paralysis

This month we had a significant new launch that I am super excited about! One year after India’s startup founders and venture capital firms came together as a team to fight COVID-19 through ACT Grants, we launched ACT 2.0 to further harness the power, resources and networks of the startup ecosystem to work on hard problems in the areas of education, the environment and women’s participation in the workforce. You can find more details here and the launch event here! We would love for you to join us and contribute as a volunteer, donor or as a grantee!

In a recent podcast, Ilkka Paananen, founder and CEO of Finnish mobile game development company Supercell, states: “I am the least powerful CEO in the world”. His view of an ideal world is one in which he doesn’t make any decisions at all (which leads to the ‘least powerful CEO’ idea). He goes on to share how he has built a culture where small independent teams, called Cells, take all decisions.

We usually associate leadership with power. Many founders and leaders find it hard and uncomfortable to let go and fully empower their teams to make decisions. Ilkka’s way of thinking of teams as smaller empowered startups within the larger company is a refreshing way to look at leadership!

Power in not always in making every decision. Often, it comes from empowering others!

Feeling stuck? – Three simple questions that can give you a real breakthrough!

It was two years into an investment when I realized that the fund’s original thesis was simply not panning out. This company Sequoia Capital India had partnered with was focusing on the lower-middle class segment of the population but despite strong customer growth, there was still no clear path to profitability in the business. In addition, the founder was a missionary leader who meant well but was unable to take the tougher decisions needed to build a commercially viable business. It was a significant investment from the Sequoia funds in those years and the team had the unenviable task of turning the business around.

Neither was the original thesis panning out, nor was the founder market fit right – but it felt like there was no choice but for everyone to invest more time and capital to try and turn this around. It felt like being in the proverbial well, where digging deeper would only make one more stuck! It wasn’t clear how we’d be able to get unstuck or improve the situation.

If you are interested in this topic, chances are you are looking for a way out of your current predicament. Maybe you are afraid to walk out of a relationship, to fire someone, to dump the current unviable project or change your job. Or, you’re simply in a situation where you don’t have control or free will, and you know it can be better. There is a sense of heaviness of knowing something is not right, accompanied by a sense of helplessness that comes from not knowing what should be done differently. Some well-meaning friends may be advising you to make a change but you may be reluctant to because you don’t have the clarity and conviction to act. Maybe you have compulsions in the short term to keep things the way they are (e.g. to keep growing to get the next round of funding) and are hoping things will magically take care of themselves later or that lady luck will smile at you at some point. Or maybe you are at a point where you have resigned to your fate and decided to chug along.

But inaction is the most direct path to regret. As Amazon founder Jeff Bezos once said: “When you think about the things that you will regret when you’re 80, they’re almost always the things that you did not do. They’re acts of omission. Very rarely are you going to regret something that you did that failed and didn’t work or whatever.” The fact that people regret not acting more often than taking action and getting it wrong has been well documented by multiple researchers who studied regrets of old people. So if taking action is the path to minimizing regret, then what can help us get the clarity and conviction to act? There are, in my view, three simple questions that may help us attain clarity and the conviction required to spur action. These are questions to help put some distance between you and the situation in hand, thereby neutralizing the current compulsions and providing clarity!

What would you attempt to do if you knew you could not fail?

This simple question, the most powerful of the three, is credited to the American televangelist and motivational speaker Robert Schuller. Many times we feel stuck because taking the alternate path is fraught with uncertainty. The fear of the unknown and fear of failure seem to overpower the pain of the familiar. But if you could mentally imagine that you could not fail and answer what you will do differently in that situation – you may uncover the right answer and realize that the fear of failure is what is stopping you from acting. It may be good in such situations to remind yourself that a good way to lead life is regret minimization – and not acting will likely be a bigger regret in the long-term.

What would you do if you knew you will only be judged ten years from today?

The second clarifying question is to help you reframe the context with a long-term view in mind. Many times CEOs are fighting to see through a period of time – let’s continue discounting the product price to ensure this quarter’s growth looks good; let’s hang on to this under-performing sales head until this upcoming fund raise is done, etc. In reality this is only an excuse to look good in the short term – but once that event is done you likely have another new event facing you where you have to look good again. What if you had a magic wand that ensured you would only get measured ten years later and no one would judge you till then – would you still hang onto the sales head or continue discounting? Many of us will be clear about the right answer for the long-term – we are just unwilling to take the pain of the short-term pressures by doing what we know will be good for the long-term. To be fair, not all of us will have the luxury to make that choice due to the pressures from other stakeholders in the situation – but what if you could convince people that it’s the right answer for all concerned? I think it’s worth trying.

What would you do if you were an outsider to this situation?

The final clarifying question is how an outsider may see a situation. It’s like getting outside your own body and looking at yourself and the situation from a distance. One way to do it is to reframe the situation and ask if your friend was in your position, what would you advise her to do? Funnily we seem to know exactly what to do if it was someone else in that situation! Another way to do it is to imagine you weren’t the current CEO of your company – but an incoming CEO.

Andy Grove, in his book “Only the Paranoid Survive”, talks about this one situation in 1985 when he and Intel’s then-CEO Gordon Moore were discussing a quandary they were in with respect to the memory chip business and Grove asks Moore, “If we got kicked out and the board brought in a new CEO, what do you think he would do?” and Moore answered without hesitation, “He would get us out of memories” and Grove said, “Why don’t you and I walk out the door, come back in and do it ourselves?” Insiders get used to their situations and feel stuck! Putting distance between you and a situation creates clarity and provides the conviction to act. This is exactly what Andy Grove and Gordon Moore did at Intel.

Once you ask yourself these questions it quickly becomes clear what the next steps ought to be and you will hopefully have the courage to do the “right thing”. I have personally benefitted from these questions even if making the change in every situation is not always possible. Back to the sticky investment – the team reflected on what the right thing to do for the long term was and acted decisively and generously towards the founder and split the business into two different companies. The founder took control of the bigger profitable business, which he was passionate about. The COO was promoted to CEO and co-founder of the smaller, unprofitable business, which the Sequoia team believed in. The team doubled down on this small business in the hope of value creation in the long-term.

Five years from that decision, the business is thriving and profitable. Revenues are compounding healthily, and the company recently attracted a significant round of capital from a reputed investor to enable the next leg of growth of the business. And our original founder is a happy 100% shareholder of his own profitable business – a win-win for both. My learning from this – always do the right thing for the long-term even if you know the short-term will be hard (but assuming your survival is not at risk!). Sometimes, the obstacle is the way – like author Ryan Holiday’s book title so aptly captures!

Recommended Reads

Here are three articles I read over the last few weeks that I found super impactful.

Google Director Of Engineering: This is how fast the world will change in ten years by Michael Simmons, is a slightly long but easy read that talks about how Ray Kurzweil, the director of engineering at Google and a respected futurist, thinks about the accelerating rate of change. Kurzweil’s basic premise is that future will continue to surprise us, and that’s because the rate of change itself is accelerating!

The Science of Reasoning with Unreasonable people by Adam Grant, is an interesting take on how to convince unreasonable people to see another point of view. The article argues that a technique called motivational reasoning, which is based on the premise that you’re better off helping people find their own intrinsic motivation to change than trying to force them to change, is the best way to deal with stubborn people.

A Historic Market Bubble – this is a podcast (with transcription) with Jeremy Graham, the co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo (GMO), a Boston-based asset management firm. While it is no secret that we are in a significant bull market, what I found interesting was Jeremy’s view that this bubble is being driven by the large influx of retail investors.

If you have time for a longer read, here are three books I’d like to recommend.

The Body, by Bill Bryson

Recommended by a candidate I recently interviewed, as we were discussing her research work in Biology. This turned out to be a book of very interesting facts about the human body and an easy listen/read as it is meant for a non-scientific audience. Learnt a few interesting things I didn’t know before – including the fact there are taste receptors in the stomach, intestines and lungs!

As a Man Thinketh, by James Allen

Every once in a while I find a small book which is packed with so much wisdom. The Little Prince by Antoine de Saint-Exupéry is one such I read last year (a must read!) and As a Man Thinketh, which was first published by James Allen in 1903. The main premise is that the key to mastering your life is harnessing the power of your thoughts! I like these small books, as they help me meet my targets on reading for the year ?

The Future We Choose: Surviving The Climate Crisis, by Christina Figueres and Tom Carnac

I found this in my bookshelf serendipitously but it turned out to be a really good read – especially as the ACT team works to build out an environment track to fund ideas that can have a positive impact on water security, air quality and waste management.

Do write in at gv@peakxv.com if any of my interests intersect with yours! Click here to read more articles on Peak XV’s blog. For more editions of Connecting the Dots, click here. I’m also on LinkedIn and Twitter.