Jeff Bezos` decision-making advice

We want leaders to take decisions fast. But also to stay alert to trends and changes (Hyperawareness), and to visit and revisit data and information (Informed Decisions-Making).

There is tension there and it is not always easy to find the balance. Many get stuck in analysis - paralysis. Others take hasty decisions and consequently, wrong turns with irreversible damage.

Three critical behavior for digital business agility

In the HAVE model of agile leadership*, we define three critical behaviors for digital business agility and agile leadership:

1. Hyperawareness

2. Informed-Decision Making

3. Fast execution

Finding the right balance

Often, leaders ask for advice in finding the right balance between speed and slow, careful decision-making that involves data collection, analysis and consultation.

IMD Professor Howard Yu writes in a recent article* about how Jeff Bezos of Amazon classifies decision. This classification is a helpful guide for deciding between speed and thoroughness in decision-making.

Type 1 and 2 decisions (Jeff Bazos)

Jeff Bazos of Amazon wrote* that he likes to categorize decisions in two categories:

Type 1 decisions: The choices are irreversible. Consequences of the decisions will change things for good. After the decision is taken, there is no way back to how it was before.

-> Bezos says these decisions require a careful, methodical approach that takes time. Staying alert and watching trends and developments (Hyperawareness), collecting and analyzing data as well as consulting others (Informed Decision-Making).

Type 2 decisions: Type 2 choices are reversible. You can back out or undo them. Consequences wouldn't change anything drastically or only temporarily.

-> These decisions call for speed (Fast Execution). Try, fail fast and learn fast.

The skill is to differentiate between the two.

Sources:

*IMD & metaberatung, 2017;

book: https://www.goodreads.com/book/show/56050890-agile-leadership---leadership-competencies-for-the-agile-transformation

*https://www.howardyu.org/how-leaders-should-make-critical-decisions/

*Bezos, J. (2020). Invent and Wander: The Collected Writings of Jeff Bezos, With an Introduction by Walter Isaacson. Harvard Business Review Press.