Decision-Making Styles: Fists, Numbers, Words & Demos
One way to think about organizations is that they are decision-making machines.
An organization's mission constrains the things they make decisions about, and an organization's culture dictates how they go about making these decisions.
I believe there are a limited number of styles we bring to decision-making. Each organization can be thought of as a certain blend of these decision-making styles.
Here are the four styles I think pervade tech. Perhaps there are more but a blend of these four does a decent job of capturing decision-making culture.
- Fists: "The most experienced person makes the call"
- Numbers: "Let's decide objectively."
- Words: "The best argument wins."
- Demos: "The best experience wins."
For example, following the popular characterizations of the big companies it seems that Apple is Demos & Fists. Google is Numbers. Microsoft is Fists. Amazon is Words & Numbers. Companies almost always have a bit of each of these styles, but they will have a dominant style (or two).
Here are my own views one each of these styles:
By its very name and our strongly ingrained societal mistrust of authoritarianism there seems to be a lot wrong with using "fists" in your culture. I'm not going to waste space on that side of the argument – I hope they are already obvious. Instead let me defend why fists can be good.
In many decisions, no matter how talented the team and exhaustive the exploration of the decision, there will remain real ambiguity on the "right" path. If you're like me, you have found by now that for many decisions, you can argue persuasively on both sides of an argument. Organizations often need a tie-breaker. A person that sticks their neck out and says we are going to go this way. This is an example of "fists" as the ultimate rationale for why they chose Option 2 over Option 1 is simply "because I said so."
You should be part of an organization where you believe your leaders are better than random at making these calls. If you're not comfortable with "fists" being used at times it seems to suggest you don't have confidence in your leadership.
This is the most incongruent style in my opinion. While the others styles demonstrate some degree of direct conflict or assertiveness, "numbers" at its purest avoids debate altogether. A "numbers" person would argue that all forms of debate are flawed and subject to numerous biases. Better to agree on sound experiments and then let the data decide. At its worst it shows up as 41 shades of blue, but at its best it can drive compounding growth.
The biggest drawback to this style in my opinion is its hard to see how you can make big leaps with your product with a pure "numbers" outlook. Often a breakthrough relies more on an insight or demo that is hard to quantify in terms of impact. Also, I wonder on team morale when things are too often abstracted to KPIs (the mission gets lost to a pure performance-oriented culture).
That said, I think if you can couple "numbers" with a style that encourages debate it can shine. I love it as a secondary style but question it as a primary.
I would group Ray Dalio and his idea meritocracy in this style. Here you believe in the power of rational argumentation and want to create a culture where concrete ideas are considered on their own merit. In the extreme, you don't believe in the notion that there can be ambiguity on decisions like the "fists" like to claim. Every decision has a rational right answer, and its about making investigations as thorough as possible through recruiting good people and good processes.
I believe this style is underutilized in tech. We, of course, have Amazon and its six-page memo as a prime example but frankly writing is hard and time-consuming, and so we often punt to "fists" or "numbers" to avoid a grind it out back-and-forth. That's the argument for why we should be doing more with "words" – in a way I'm saying we're being too lazy.
That said, there are limits to "words". As Ken Kocienda describes in his book "Creative Selection", often these arguments end up looking like two people debating whose imaginary puppy is cuter – you can only get so far with words. The point being that we don't build and sell arguments, we sell products. And a high percentage of a product's success is determined in its experience (ie., how it works).
Demos in a non-obvious way are a close sibling to "numbers". They both are uneasy about conference rooms – the province of "fists" and "words". Demos however instead of going all-in on objectivity, heads the other way and puts emphasis on subjectivity. The thinking here is that the act of building reveals the critical details about a decision. Moreover by embracing building, and thinking and debating in successive approximations of your product you never lose sight of how your product works. This experience is arguably as critical to the adoption of your product as the merits of the idea itself.
Taken to an extreme though, a Demos organization builds a wonderfully designed widget without much of a market. Some healthy amount of "numbers" and "words" can help pressure test if things are on the right track. And effective "fists" here should be strong editors with impeccable taste.