Packing Well: Essential Thinking Tools and Business Rules for CEOs
How to be a Chief Decision Officer and Chief Communication Officer
Here are some business rules I learned along the way.
1. Prioritize Timing and Team: The timing of your market entry and the strength of your team are crucial for success, often more so than the idea, funding, or business model in the early years. The right timing can make all the difference, and having a capable team is important to navigate the many challenges that will arise. If someone isn’t great and in a key position, develop them to great, or move them on to something they can be great at. That can be internally or externally, but help them. How we deal with people we move on matters to the people staying too. And kindness is not that hard to do.
2. Managers Are Coaches & Culture Carriers: Hire managers who excel at coaching, developing their teams, and are strong communicators. This approach enhances communication within your company and builds a strong organizational culture. Remember, as the CEO, you are the Communicator-in-Chief, and your managers should mirror this by fostering open dialogue and growth among their team members and reflect the culture you lead with.
3. Act on Lingering People Issues: Address persistent concerns promptly, especially when it comes to personnel. Ignoring issues can lead to larger problems down the line. Often, you might sense something is amiss—don’t ignore that intuition. Reflecting in writing can help you identify and tackle these issues head-on. One problematic individual can hinder an entire team’s performance, so don’t settle for mediocrity or poor behavior.
4. Communicate Clearly: Ensure your team fully understands goals, expectations, and strategies through clear and specific communication and the facts and truth of things. This clarity sets the tone for the entire organization. Regular business cadences and meeting agendas facilitate this, along with a weekly CEO update. Remember, most problems stem from misunderstandings or poor communication or not following up, especially during departmental handoffs and when defining responsibilities.
“The hardest thing to explain is the glaringly evident which everybody has decided not to see.”
― Ayn Rand, The Fountainhead
5. Stress-Test Your Opinions: Encourage others to challenge your views and consistently engage with customers and external sources to refine your perspectives. Make it clear to your team that while they should feel free to question and provide input, once a decision is made, execution should follow with conviction. Demonstrate this openness by seeking feedback from various sources, including trusted network contacts and family. Be prepared to adjust your approach based on new insights, but remain decisive—after all, as CEO, your role is the ‘Chief Decision Officer’.
6. Engage in Third-Level Thinking: Dive deeper into issues to understand underlying causes and visualize the potential ripple effects of your decisions. This approach often leads to different, more effective choices. For instance, when planning a major change like hiring a new executive or entering a new market, consider not just the immediate impact but also the secondary and tertiary consequences. This kind of thinking has saved me from making ill-advised decisions on numerous occasions.
Einstein once said, “You can’t solve a problem from the level of thinking that created the problem in the first place“.
7. Understand Context: Always consider the specific circumstances surrounding your decisions. If something doesn’t make sense, ask more questions. This practice prevents assumptions and helps you avoid mistakes. Continually seeking context ensures that you’re making informed decisions based on the full picture. Try and build a practice of asking more questions in every meeting with your team and in your 121’s with your senior team. It will often cause them to go off and ask further questions too. We are all often moving so fast, especially on urgent topics, we don’t often go deep enough. You building this ‘learn more’ mindset in your organisation through your example, will carry into its culture.
8. Use the Null Hypothesis: Challenge assumptions by testing the default position that a proposed change or investment will not have the desired effect. Its at least a good thought experiment and discussion topic. For example, assume that a new AI training tool will not improve sales or justify the investment. Test this by implementing it with a portion of your team and measuring the outcomes. This method helps protect against the “shiny new object” syndrome and ensures that any new initiative is truly beneficial before full-scale adoption.
9. Counter Decision-Making Bias: Recognize that people deeply invested in a project may only see its positives. Actively ask what could go wrong and plan to mitigate those risks. Conduct formal pre-mortem sessions to anticipate potential failures and address them proactively. At a minimum, require teams to include risk assessments in their proposals. In addition the diversity of the team makes a difference. Finally your own bias makes a huge difference. I have a strong bias for action and am impatient, and so use a question to myself “have I discovered and listened enough yet” to try and stop my own bias from impacting the quality of the decision. I have no idea how many bad decisions are made in an organisation; but I think we are probably not even aware of many of them! But you can ‘feel it’ when the decision making is good, and you move on it, it feels easy to explain, including the downsides. So if you don’t ‘feel’ that it is good as you make it, you probably need to relook at it.
10. Reflect in Writing: Document your decisions and their outcomes regularly. Keeping daily reflections and weekly logs allows you to track what worked, what didn’t, and why. I have completed weekly reflections for over 25 years. This practice helps you identify patterns, reinforce learning, and make better choices in the future. Consider questions like: What’s working? What isn’t but could with adjustments? What is failing and needs to be addressed?
11. Separate Decision Quality from Execution and Outcome: Understand that a good decision can still lead to a bad outcome due to factors beyond your control. Focus on making high-quality decisions and ensuring they are executed as intended. Recognize that even with excellent execution, results aren’t guaranteed. This perspective is particularly useful when testing new products or exploring growth opportunities and encourages you to think in expected value/bets. Meaning you won’t bet the farm.
12. Rely on Analysis: Base your decisions on data and thorough analysis rather than intuition alone. While gut feelings can provide initial direction, supporting them with data ensures sound decision-making. Gather as much information as possible from your teams, customers, and external sources to inform your choices. This will actually help you ‘feel’ if the decision is a good one, to the points made in 9 above.
13. Analyze Transactions Deeply: I say to teams”how much and how many” all the time. Look beyond financial summaries to understand the fundamentals of your business—such as the number of customers, daily sign-ups, product performance, and unit economics. Regularly dissect transactions by geography, time periods, and other relevant factors. This deep dive reveals critical insights that high-level financial metrics might obscure. Also, establish a routine where your finance team conducts unit economics analyses on all products and customer segments every six months. Make sure your management team have units and customer numbers, not just revenues, in their weekly management reports.
14. Apply Statistical Tools: Utilize methods like linear regression and correlation analysis to uncover trends and relationships within your data. Often, these statistical tools can highlight truths about your business that aren’t immediately apparent, making it easier to make informed decisions. Your FD can show you how if this is not your area of expertise.
15. Follow Through on Strategy Implementation: Building on point 11. Good strategies fail without diligent oversight of their execution. Regularly verify that your strategies are being implemented as intended. Embed checks such as progress presentations, regular check-ins, and key performance indicators (KPIs) to monitor execution. Ensure that your agenda and 121 with your teams includes updates on all key projects. A Chief of Staff is a key tool in ensuring strategy execution, and worth their weight in gold because of it. Having a Chief of Staff join meetings, check on execution, and be the constant action chaser, will ensure speed and completeness of the decisions made.
16. Predict Change Actively: Anticipate industry shifts by consistently looking 12–24 months ahead. This forward-thinking approach is as crucial as managing day-to-day operations. Most CEOs don’t do it or it suffers to todays urgent agenda. While it’s easy to get caught up in immediate issues, maintaining a long-term perspective enables you to navigate future challenges effectively and will often change what your prioritize today. When planning annual budgets, consider starting with projections for the following year to set more strategic goals and working in detail back to what needs to happen today.
17. Recognize Prediction Challenges: Accept that making accurate forecasts is inherently difficult. Stay adaptable and prepare backup plans to adjust as circumstances change. This mindset allows you to respond effectively when unexpected events occur, ensuring your business remains resilient. Again helping you think in bets and expected value.
18. Consider Constants: Build your strategies around elements that are unlikely to change in the future. Focusing on constants—such as core customer needs or foundational team members—provides stability in a rapidly changing environment. For example, regardless of technological advancements, customers will always need reliable service delivery from point A to point B.
19. Seek Uncommon Opportunities: The best opportunities often exist where others hesitate to go or where the work seems too challenging. Success frequently lies on the other side of hard work. Embrace complexity and be prepared for a longer journey when pursuing unique opportunities. Many people give up when things get tough; persevering can set you apart from the competition.
20. Do Things That Don’t Scale First: Focus initially on creating valuable customer experiences, even if they’re not immediately scalable. Testing solutions directly with customers or internal users can provide invaluable feedback. With advancements like AI and no-code tools, it’s easier than ever to prototype and refine these experiences before scaling up.
21. Practice Disciplined Capital Investment: Be meticulous and strategic with capital investments, treating each dollar as if it’s your last and it must yield results. Use expected value calculations and consider your time horizon. For example, decide carefully whether to invest in expanding your engineering team for faster feature development or to allocate more funds to marketing for immediate sales growth. Involve your finance and product teams to run scenarios and gather insights, including customer feedback and competitor analysis. Establish criteria for investment decisions and evaluate options against them, often finding that a balanced approach yields the best results.
22. Cash Management: Maintain vigilant oversight of your cash flow. Regularly review debtors and creditors in your weekly meetings. If issues arise, investigate promptly—they could stem from process inefficiencies or inadequate sales management. Proactive cash management prevents small problems from escalating into significant financial challenges.
In Summary:
As a CEO, your role encompasses being both the Chief Decision Officer and the Chief Communication Officer. These two areas done well lead to successful execution. Begin by assembling a strong team and promoting clear, open communication. Employ deep analytical thinking and leverage data to inform your decisions, always considering the context and being mindful of potential biases. Diligently follow through on your strategies, anticipate industry changes, and remain adaptable to unforeseen circumstances. Seek out opportunities that others might overlook and practice disciplined investment, ensuring that every dollar spent is justified and strategic. Keep a close eye on cash flow to maintain financial health.
Remember, our thoughts are the heaviest baggage we will ever carry. It’s essential to “pack well” by equipping yourself with effective thinking tools. Regular reflection and documentation of your experiences will help you learn and grow, ultimately refining your approach as a leader, ensuring your reach your destination.
You can work through decisions with this Custom GPT I created here:https://chatgpt.com/g/g-vAp7RMOR0-ceo-decision-making
Good luck!