Posted on: August 11, 2021
Wi 751 | Not Doing Right
The ability to make sound judgments is an important asset to have when running a business because making decisions is one thing entrepreneurs and leaders do more than anything else. Individuals—even organizations—have failed or gotten into trouble because of bad decisions, so what can you do to avoid being in the same situation?
In this episode, Chris Arnold will walk us through his methodology for making decisions, sharing tips that he picked up from books he has read on the topic. He will explain why some decisions are agonizing to make and what you can do about it.
If you’re looking for a systematic way to process your thoughts and make better decisions as a leader, then this is the episode for you!

Reality Check – The Most Important Thing You’re Probably Not Doing Right In Your Business

I’m excited that you’re with me. This is a solo episode. It’s going to be me and you. I’m going to start off with a question. This question is going to lead pretty quickly into what you’re going to get from this episode. My question is this. What’s the one thing you do in your business more than anything else? What I’m going to argue is that it’s making decisions. Do you ever sit back and ask yourself in a day, week or month as you’re running a business how many decisions you’re required to make on a daily basis, particularly if you have a team? You’re not only answering and figuring out the decisions that you’ve got to process for yourself, but you’re doing that for a lot of the members of your team that is coming to you every day.

We call those you-got-a-minute meetings, “You got a minute? I got a question?” If that’s the case and the one thing that we do, I’m going to follow up with this next question. What is your methodology for making decisions? Have you ever stepped back and asked yourself, “Do I have an actual systematic process, a methodology for how you make decisions or are you just making decisions?” I know for myself, I was just making decisions. It doesn’t mean that you don’t intuitively and maybe if you thought about it, you sat down and maybe you’re able to ride out some principles or maybe some best practices on how you make decisions.

I know for myself, I didn’t have a grid for making decisions. I sat back to myself and questioned that. I was like, “If making decisions is the thing that I do more than anything else in my business, how is it that I’ve never sat down and come up with a methodology?” What we’re going to talk about is I’m going to give you a methodology for making decisions. In my opinion, this is probably one of the best gifts that I can give you in 2021. If decision-making is the thing that you’re going to do the most and this show is going to help you make better decisions and you’re making thousands a year, you can imagine that we can move the needle quite a bit in your business and your personal life. Running a business, being a father, being a husband, all of the roles in which we have, we’re constantly making decisions.

The content I have is not original. I do want to give credit to Chip and Dan Heath. They wrote a fantastic book called Decisive. Some of the information I’m going to be pulling is directly from their book, as well as some other books and stuff that I’ve read on decision-making to help me figure out my process. Let’s hop in and get right to the meat. We’re going to break this down into two parts. First, we’re going to talk about the four villains of decision-making. Lastly, I’m going to give you a few additional tips that I picked up along the way that I find that I’m constantly, daily to weekly, utilizing in my decision-making.

The Narrow Frame

The first villain of decision-making is what’s called a narrow frame. It’s spotlighting one alternative at the expense of all others. You always find yourself saying, “Should I do this or that?” A lot of times, people will call me to help them think through a decision. What I always find is they come to me with only two things. It’s like, “Should I either do this or that?” It’s being stuck with only two options. What I want to give you is the first thing that you want to do when making decisions. The very first thing I do is you want to widen your options.

When somebody comes to me, what I do is I say, “I know that you have a decision to make between this or that, but let’s sit here and find 3 to 5 more options than the two that you brought me in order to make sure that we are looking at this problem or challenge that you have from every direction.” What happens when you widen your options is you remove yourself from getting stuck between two things. All of a sudden, new options come to life that you didn’t think of.

Sometimes it’s a combination of two things or like a hybrid or it could be an option where you’re like, “I didn’t even think about that.” In my coaching and helping friends, when I sit down and do that, they’re always like, “I didn’t realize that I had that many options to take a look at.” The first technique, the thing I would tell you to take a look at, is to make sure that you don’t have a narrow frame. Make sure you sit down and widen your option.

Wi 751 | Not Doing Right

Not Doing Right: Attain distance before you make a decision.

 

Confirmation Bias

The second villain is confirmation bias. You’re not truly objectively analyzing a situation, but rather you’re looking for confirmation for what you subjectively already want to do. You’re fundamentally like cooking the books with the data that you’re collecting. What you’re looking for is reassurance rather than the truth. I don’t know about you, guys, but if my heart gets set on something and I say that I want to be objective about it, the reality is I’m hunting for information that makes me feel good about choosing the thing that I’ve already decided that I want. That’s not real decision-making. That’s confirmation bias.

The second thing that I would tell you is the tactic that you want to do. You want to reality-test your assumptions. You want to come in with a clean slate and be what’s called neutral. Being neutral is the idea that, “I am okay regardless of the outcome.” That’s a tough place to get to, particularly if you’re emotionally wrapped up in the outcome of maybe something that you want to have happened. I’m telling you that getting neutral and I’m utilizing that from Terry Looper. He talks about that in a book that he wrote called Sacred Pace.

He, as a billionaire, said, “One of the most important things I ever learned to train myself to do was to get neutral. I know that I might want an outcome, but I’ve got to step back and be okay with either outcome. If I put myself in a place of neutrality, then I’m going to make a good decision because I’m not going to allow what I want in my confirmation bias to come in and corrupt the process of making the right decision.” This is a huge one because we know we’re emotional.

Widen your options so you won’t get stuck between two things.

If you’re reading, you realize that fundamentally what you do is sales and most people make decisions in sales out of emotion. That’s why people buy on the showroom floor. That’s why you don’t want that seller to get off the phone. You want them to make that decision at the moment, but I want you to be on the other side of this and the fact that you have to make a decision. I want you to be able to learn to make decisions based on data and remove any type of confirmation bias that you have. That’s important.

Short-Term Emotion

Let’s go to the third one. The third villain of decision-making is short-term emotion. This is a big one. It’s when you get excited with that new idea that you have when you come across maybe something you want to buy that you haven’t heard of. Whatever it is, there’s that moment, emotion, excitement, and this is true for those of us that are entrepreneurs. We get hyped up. I don’t know if you’ve ever gone to a mastermind or maybe you got off the call with someone and there were 4 or 5 good ideas. You’re on your toes, excited. You’re like, “I can’t wait.”

What you have to understand is that is a villain of decision-making. What you want to do in the third tactic is you want to attain distance before deciding. You want to allow that emotion to run out of you so that you can come back and make an objective decision. I’ll give you a practical thing that I picked up from Terry Looper. He calls it the 24/7/6 rule. I live by this rule. If I receive an invitation to do anything, I will not say yes to that invitation unless I sit on it for 24 hours. It could be to come to speak on a podcast. It might be to go to an event, whatever that looks like. Again, something that’s going to require time.

I don’t do that if a friend asked me to lunch. Obviously, I’ll go to lunch, but there are times that we get invitations for things and so you wait 24 hours. If I get a new idea and ideas are popping in my head all day long, I will express that idea to my COO or my team and then we’ll shelf it for seven days. We’ll come back and relook at it seven days later to see if that idea was as good as we thought it was when the emotion was there. It’s surprising. I’ll go back seven days later and ask myself like, “What was I thinking? That idea was not as great as it felt in the moment.”

The six stands for six months. If you have some type of death, divorce, disaster, or even a windfall, Terry Looper will tell you, “Don’t make any decisions for six months.” This is a big rule, particularly with people that sell companies. They get a big windfall of cash that comes in. What you’ll always hear and what I’ve seen from guys that have sold their company and made millions is they will sit back for six months, sometimes to a year. They will not make a decision about what they’re going to do with that money, what their next venture is going to be, etc. The 24/7/6 rule is something that I’ve utilized on a daily and weekly basis. That has been valuable for me. That villain is short-term emotion and you want to make sure that you attain distance before you make a decision.

Overconfidence

The last one is this. What makes the fourth villain for bad decision-making is overconfidence. You have got to use the tactic, understand and prepare for the fact that you’re wrong. I see people come in and they have such assurance, almost a bit of cockiness, about a certain move or strategy that they’re about to implement. There’s no humility and understanding that the fact that they might completely miss it or might have been completely wrong about it. I’ll circle back around with that person and ask, “How did that particular decision you made go?” They are like, “That thing completely fell apart. The wheels fell off.”

What I’m going to tell you is you don’t want to be overconfident. You always want to know, regardless of the decision you’re making in your business, you got to be prepared for the fact that, as much as it seems like a slam dunk, you might be wrong. The model that I’m giving you is what’s called the WRAP Model. That’s a great way to remember these four tactics. Those are, Widen Your Options, Reality-Test Your Assumptions, Attain Distance Before Deciding, and Prepare To Be Wrong. I love the WRAP Model. I use it all the time. I’ve shared it a lot with my Multipliers brothers and different people that come to me for decision-making.

Wi 751 | Not Doing Right

Not Doing Right: Make decisions based on what it will look like 10, 20, 50 years, or even generationally, from now.

 

If the number one thing you’re doing in your life and business is making decisions more than anything else, you need to have some type of scientific, a proven system or some systematic way in which you are processing all of the decisions that you have to make. Think about it. What is going to determine the success of your business more than anything else? I would argue it’s going to be the level at which you make great decisions. People that run great businesses, if you go back, the number one common denominator is they made a lot of great decisions.

You’re going to make bad decisions, mistakes and fail. That’s okay and a part of it. There’s no way that you’re going to run 100% in your decision-making, but if you could move your decision-making ability up 20%, 30% or 50% better, can you imagine that over the trajectory of 5, 10, 20, even 30, 40, 50 years as an entrepreneur? It’s unbelievable where that could put you when it comes to the fact of being a business owner for a long period of time. That’s why I wanted to take the time to share this with you because I do feel like it’s a game-changer if you understand the importance of decision-making.

10/10/10 Rule

Let me go to the second part of this. I want to close with a few more tactics to consider. First of all, there’s the 10/10/10 Rule. When you’re making a decision, you want to think long-term. If you’ve read anything on Jeff Bezos, there was a great biography written about him. They will tell you that Jeff Bezos’ greatest skill is the fact that he is a long-term thinker. He makes decisions based on what this is going to look like 10, 20 and 50, even generationally from now. That’s hard to do because we tend to be shorter-distanced in our thinking. We’re thinking about this year, this quarter or this week. We’re not thinking about a decade from now.

The 10/10/10 Rule is, “If I make this decision, how am I going to feel about this ten minutes from now? How am I going to feel about this decision ten months from now? How am I going to feel about this decision ten years from now?” What I like about that grid is, it’s helping you think about both sides of the spectrum, “How am I going to feel about this decision quickly, soon in the process after, but more importantly, how am I going to feel about this decision long-term?” That’s an important thing to understand.

Soul Of Your Core Values

The second one is, have you ever found yourself agonizing over a decision like you’re completely torn about it? I love what Chip and Dan Heath talked about with this particular aspect. What they’ll tell you is that is usually the sign that you have two core values that are conflicting with each other. It’s like there’s a showdown going on between your core values. Let me give you an example of one that I see quite a bit in Multipliers. Somebody will call me and they’ll go, “I’m thinking about taking my business to the next level. I want to go bigger, but the problem is I’m concerned about it taking away from the time with my family. I’m worried about losing the lifestyle that I currently have right now, but I have this desire to grow and get bigger.”

That’s a conflicting thing because what I point out at the moment when I’m talking to that person is I say, “I can tell that you have two core values that are working here right now. You have a core value that you desire to make things better. You’re a builder. You love to grow. That’s one of the things that you value. You love to make things better, but the challenge you have is you also have a core value when it comes to your family and your time. You want to make sure that you’re a good steward.” The reason that this decision is so agonizing for you is because these two core values are in conflict with each other. What you have to do in a moment like that is you have to sit back and understand that the reason that this is so conflicting is because it’s getting down into the soul of your core values.

At that point, what you have to do is you have to look at those two core values and ask yourself, “Which of these two core values is more important to me?” Usually, when you look at it that way when I talk to guys, that becomes an easier decision for them in the example that I gave because what they’ll say is, “My lifestyle and my relationship with my kids and my family is more important. I’m going to continue to get bigger, but I’m going to be cautious as I do that. I’m not going to go as heavy into that process as I was thinking about going matchsticks and burning it at both ends type of mentality.” It brings a lot of clarity.

Pilot Language

The next one is pilot language. There’s a word that’s called lemur. Pilots use it. What it is, is that they feel that something isn’t right. In decision-making, call it your gut. People will say that. They’ll tell you a lot of times as you get older in business just to trust your gut. If I were to define what your gut is, it’s the feeling that has been put together by all the experiences that you’ve had that have been layered on top of each other. The longer you’re in business, the more experiences you have, the stronger your gut gets. There’s something that’s like, “I’ve been here. I know this. There’s something that I recognize about this that I understand.”

Making great decisions determines the success of your business more than anything else.

Pay attention to the lemurs. If you’re in the decision-making process and something in your gut is not right, don’t ignore that. There are two types of people that are reading right now. There are those of you that are what we call organizers. By nature, you tend to be extremely analytical. You’re super data-driven. That’s great. You’re the one probably I’m speaking mostly to on the side of trusting the lemur because you’re like, “This is what the data says. I’m not going to trust what I’m feeling.”

Those of you that are reading on the other side, you by nature are entertainers, using the CORE Map, Commanders, Organizers, Relators and Entertainers. You’re emotionally driven. You’ve got a lot of high energy. You’re on the other side of that. You are more susceptible to hearing the lemur. What I would challenge you on is you got to quiet down a little bit and spend more time looking at the data. You don’t want to be on either side of that spectrum. Learning to understand your personality and utilizing both data, as well as emotion being your gut both those things will serve you well long-term in your business.

Wi 751 | Not Doing Right

Not Doing Right: There’s such power in asking the question, “what is the wise thing to do?”

 

Greatest Question Ever Asked

I want to leave you with what I would consider the greatest question that you can ever ask. I picked the stuff from Andy Stanley. He wrote a book about it. It’s called The Best Question Ever. He says, “There are a lot of times where the decision that you’re going to make is not very black and white. There’s not a right or wrong to what you’re doing. Honestly, I’m steering even a little bit out of business more into the moral aspect of your personal life as well.” There are a lot of decisions that come up where they’re gray and you don’t know what to do.

Andy Stanley wrote a book. He did a talk called The Best Question Ever. He said, “Here’s the question that you ask yourself at the moment, ‘In light of my past experiences, my present circumstances, and my future hopes and dreams, what is the wise thing to do?'” You got to let that simmer a little bit. That is such a powerful question because it moves into the gray area because you’re no longer asking, “Is this good or bad? Is this true or false? Is this right or wrong?” You’re simply asking yourself, “What is the wise thing to do?”

Let me give you a couple of examples of how this might work in leadership to break this down. Is it wrong for me to drink alcohol at outings with my team members if you run a team? I’m bringing this up because I’ve been in a lot of circumstances where I’ve seen this and maybe observed a leader with their team, coaching students or whatever and they’re a little bit tipsy and I’m going, “I don’t know.” Is it wrong to do that? No. I’m not going to say that you can argue that it’s wrong, but if you ask the question, “Is that the wise thing to do?” I would probably tell you, no. I don’t think that’s the wise thing to do is to consume alcohol in front of the people that look up to you for leadership.

You can see how that question cuts through right or wrong versus-wise. Let me give you another one. Is it wrong for me as a married person or a leader to go have lunch with somebody of the opposite sex? I don’t think you’re going to get in and argue if that’s right or wrong, but I’ll ask this question. Is it the wise thing to do? I would probably argue that it’s not because, if you’re in a leadership position and there’s a particular reputation that you have, let’s say someone walks by. They don’t hardly know who you are. Maybe they’re a competitor and they see you sitting there having lunch with someone. People have imaginations.

If you’re in the decision-making process and something in your guts is not right, don’t ignore it.

We also understand with the way things work how the affairs begin. A lot of times, they begin just with a conversation with the opposite sex. That’s a little bit more on the personal moral side, but I want to give you an example of like, “Is it wrong to do that?” I’m not going to say that you can argue that’s wrong. You might be reading right now and go, “I don’t think there’s anything wrong with it.” I’m not here to debate right or wrong, but what I’m here is to ask you and give you a new question to ask yourself in those circumstances, “In light of my past experiences, my present circumstances, my future hopes and dreams, what is the wise thing for me to do?”

For me, personally, if I were to be vulnerable for a second, I would tell you when it comes to alcohol, based on my past experience, I was definitely a troubled kid. I got into a lot of stuff when it came to drugs and alcohol in high school. Is it wrong to drink? No, I don’t think it’s wrong to drink, but if I take that question for myself and I say, “In light of my past experiences, my present circumstances, my future hopes and dreams, is it wise for Chris Arnold to drink?” No, it’s not, to be honest with you. That’s why for me, that is something, for the most part in my life, I have done intentional work about steering clear from.

I have friends that moderation is not a problem for them at all. They can have a beer here and there and it’s not an issue, but I do find a lot of us entrepreneurs tend to have pretty excessive personalities. The anomaly when it comes to entrepreneurs is moderation. What I tend to find usually is excessiveness. I want to give you some examples of that question there. There’s such power in asking the question, “What is the wise thing to do?” I think this is such an important episode because I want to go right back to what I was saying at the very beginning.

When you take a look at running a business, being a leader and fulfilling all the roles that you’re called to do, every day, you’re having to make decisions. If you have to make decisions, what I would say is like you’re sharpening your skill for marketing, to become more financially literate, to convert better, to be better on sales when you’re out in front of the seller, or whatever that looks like for you, are you sharpening the most important skill that you need and that’s decision-making. That’s what I wanted to challenge you with. I was personally challenged with it myself. It has been super valuable for me, so I want to take some time to share it with you. Thank you guys so much for tuning in to the show. As always, I will talk to you soon when I add more value.

 

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