MBA2706 How To Make Tough Decisions

0:00Whether in business or in life, you will, at some point, face tough decisions. Those decisions might keep you up at night. They might change the direction of your life. I faced plenty of them. Ending partnerships, selling businesses, ending relationships, hiring, letting go of people on my team that I actually care about. So today, I'm going to talk about how to make tough decisions in both business and in life with clarity, with confidence, and peace of mind.

0:32Welcome back to the$100 MBA show. I'm your host Omar Zinhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday to help you start, grow, and scale your business. Real quick, if these episodes help you in any way, hit the follow button on this podcast app. It helps us to keep bringing you practical Business Insights three times a week for free. Thanks. Tough decisions are hard because they involve uncertainty and consequences. That's why they feel uncomfortable because we're uncertain what's going to happen if we make one decision or another, and we're not sure what the consequences will be.

1:10If you're deciding between two good options, you have fear of missing out. And if you're deciding between two bad options, which often happens, you fear regret. Am I going to make the wrong decision and that decision I make is worse than the other decision. What really makes decisions hard isn't the options. It's actually the emotions behind the options. We attach these ideas. We attach our identity to the choices we make. We think that if we make one choice, what does that mean about me? Does it mean that I failed? Does it mean that I'm an idiot? What are people going to think about me? All these thoughts go through our head.

1:48But the truth is, what I found is that indecision costs more than the wrong decision. In most cases, not making a decision is a whole lot worse than making the wrong decision. The wrong decision is often not irreversible. Most of the time, you can figure it out. You can learn from that wrong decision and pivot. This reminds me of a concept that Jeff Bezos teaches his leadership in Amazon, and he calls it two door decisions. You know, some options, some decisions that you have to make are going to be decisions that you go through a door. If it doesn't work out, you can always come back and make a different decision and correct your mistake.

2:28And then there's some decisions that are like one door decisions, meaning that you're going to go through the door and you're going to have to pay for that mistake for eternity. And he says that 99 % of decisions in life are two-door decisions, meaning that you can go in, go out, no problem, you can correct. Very rarely do you make a decision that will cost you not just now, but later in life. And it's important to be mindful of this. You've got to ask yourself, is this a one-door decision or a two-door decision? Is this a decision that will be irreversible? And if so, then that's a different type of decision.

3:01And it's quite rare, but most of the time we're going to tell ourselves, actually, this is a two-door decision. The stakes are not that high, I can figure it out if I get it wrong. But really, the message I want to convey right now is that not deciding actually keeps you stuck. Deciding actually helps you move forward, even if you have to adjust later, even if you find out that this decision was not right for you. And then you say, Okay, no worries. I'll just change my decision. I'll change my course and make a better decision down the line. So there's three filters I use for big decisions. Number one, I call the long-term filter.

3:37You got to ask yourself this question. Will this matter in three years? Will this matter in five years? Will this matter in 10 years? Great question to ask because it really puts things in perspective. An example is when Nicole and I were debating whether we're going to sell our software company Webinar Ninja, I asked this question. It was an emotional decision. No question about it because Nicole and I worked on that company for 10 years. That software was our life and we dedicated so much to it. we did decide to sell and i am so glad i did because when i was making this decision i asked myself would i rather be working on this for another three five ten years or do i want to have the freedom and the clarity to build something new then stay attached just because of fear because the reason why i was contemplating of not selling is because i was like i have lighting in a bottle here i have a business and an idea and a product that people like i'm not sure i can replicate this and that's just fear really speaking and i don't like making decisions out of fear so whenever fear shows its face i ask myself am i doing this just because i'm afraid that's not a good enough reason you need to also ask yourself would you rather have the opposite have the the freedom in this case or have the flexibility and the answer was yes i don't want to do this for the three five ten years and the only reason i would continue to do it is because i'm afraid of trying something new and failing.

5:00So that question instantly brought me perspective. Will this matter in three years, in five years, in 10 years, whatever timeline you want to give, but three years is the minimum to kind of think long term. And yes, it will matter because I want to live a different life. I don't want to continue to do this for the long term. The second filter is the energy filter. And this is where you ask the question, does this give me energy or does it drain me? When you think about each option in the decision you're making, pay attention how your body reacts. If one side of the decision gives you excitement, curiosity, that is a signal to a yes for that side of the decision, that idea, that path.

5:39But if the other side gives you tension and dread, that's a no. You know, I once had a partnership arrangement in our company that looked great on paper and it was, you know, fruitful. But every meeting, every time I was working on that partnership, it drained my energy. So I decided to say no more. No, I don't want to do this anymore because this energy is being wasted. I could use this energy somewhere else. And that was one of the best business decisions I ever made and personal decision because I started to enjoy my work more because I didn't have to do that dreadful work. Listen, the thing I love about entrepreneurship is what Derek Sivers talks about in his book, Anything You Want.

6:21And in this book, he says, the great thing about entrepreneurship is that you can create your own utopia. As a business owner, you can create your own world. You don't have to work with people you don't want to work with, people that drain you. You can do whatever you like. You can build whatever you want. You can spend your days the way you want, as long as it serves your business and your customers. So you don't have to be stuck in a situation that drains you. Filter number three, the integrity filter. And this is a really important one. And the question you want to ask Can I explain this decision proudly a year from now?

6:51Again, I'm going to call on Jeff Bezos. He calls this the regret minimization framework. If you'll regret not taking the leap or the decision that you want to take aligns with who you want to be, you probably already know the answer. This is the power of the regret minimization framework because regret is a very powerful thing. And if you've lived life a little bit, if you're in your 30s or your 40s, you have some regrets right and you wish you did something different you wish you started something different maybe it's even just something a personal like i wish i learned how to play the piano when i was younger i wish i spent more time with somebody that i don't see anymore whatever it might be the point here is is that it's a real thing and you should use regret every time you make a decision say hey am i going to regret this decision not taking the leap not betting on myself not going for it?

7:40Probably. So I should do it because doing it and failing is not as bad as not doing it all and not seeing what's going to happen and not really at least giving it a shot and allowing myself to be my true self, align with who I am and try things that really get me excited. So I want to give you some examples of successful people and look how they make decisions, how they handle tough calls. Steve Jobs, he said that focus is about saying no to a thousand good ideas. Steve Jobs is maniacal. We know that he's not perfect. None of us are perfect, but I love this about Steve Jobs because he really nails it right here.

8:22It's easy to say no to things you don't want to do. It's hard to say no to things you like doing, the things you enjoy. And most of the time, if you want to get anything done in your business, in your life, in your career, you're going to have to say no to a lot of things you want to do so you can focus on the most important thing. Apple succeeded because he made brutal decisions to cut a lot of products that were not doing well. When he came back as CEO into Apple, he cut a lot of products that are just like taking up space, energy, time for no reason. They minimized their product line and just focused.

8:53So this would allow the company to obsess over what matters most, the product and the customer's experience with the product. Sarah Blakely from Spanx. She's the founder of Spanx, self-made billionaire. She's an inspiration, putting it lightly. She turned out a major early acquisition offer. She wasn't sure if it was right for her, if she should sell her company. She asked, would future me thank me for this? And she said no. She held on, built a billion-dollar brand. And by the way, Sarah did this with zero funding. So it's pretty incredible. Elon Musk, love him or hate him, he's controversial.

9:28I definitely disagree with a lot of things he said and has done, but there's no doubt this guy's decisive. When Tesla was weeks away from bankruptcy, he doubled down and invested his last personal money to keep the business alive. And that's conviction. That's decisiveness. He made a decision because he knew that he would regret it if he didn't. And Tesla now is one of the most profitable, valuable companies in the world. What's the pattern here? Well, they all chose decisively an accepted responsibility. They took ownership over the decision and they said, I'm all in. They didn't outsource their judgment to others.

10:05They didn't say, okay, I'm going to just do whatever my advisor tells me to do. No, maybe they seeked counsel. Maybe they talked to their friends or maybe their colleagues or their mentors. But at the end of the day, they made a decision and they took ownership over that decision. So I want to give you a quick five-step process that's a simple system that you can use for any tough decision, business or personal. Step one, write down the problem clearly. Don't keep it in your head. So for example, should I quit my job and go full-time on my business is the problem you're trying to solve here, is the question you're trying to answer.

10:43Write it down so you see it in black and white. Trust me, it makes a difference. Step two, list your real options. Usually it's not just A or B. There's a middle path to. There might be C and D and E and F and G, right? Write down all the options there. Maybe it's going part-time first. Maybe it's delaying it for six months. Maybe it's quitting tomorrow and starting. Maybe it's asking your boss if you can work four hours a week full-time, but do 10 hours every day. Write down every option possible. Step three, identify the key variable. what's the one factor that matters most time money relationships mental health what is the factor that matters most to you and just be honest often when i'm making decisions the answer is money i want to make more money and just be honest with yourself that's what you want sometimes it's i want more time sometimes it's i actually value the relationships in my life and want to have more time for that in this decision that matters most to me choose one remember we got to focus and allow ourselves to make a clear decision based on real data, real information about ourselves.

11:54Step four, talk to one or two trusted people, not everyone. Okay, don't try to talk to five or 10 people. This is going to be very confusing. You're going to get opinions that are opposing all over the place. And they're all just talking out of their own perspective, right? Too many options causes paralysis, really. So choose people who understand your values, and not just your situation. If you can, speak to somebody that is where you want to be in a few years, that has achieved what you want to achieve. So in this case, they've quit their job, they started a business, they have a successful business, they have perspective, they've gone through the path, so they can give you some sound advice, and something to think about.

12:33And lastly, step five, decide with a deadline, you have to put yourself on a deadline, set a date and stick to it. And remember, clarity comes from action. And remember, is it one door decision, two door decision, Most likely it's a two-door decision. I can always change what I do based on what I learn when I make a decision. So once you decide, commit to at least 90 days before second-guessing yourself or changing the course of action. So you're going to decide. You're going to take action for 90 days. See the result. Oh, okay, I'm moving closer to where I want to go. Good decision. If you're not moving closer despite all your efforts, question, is there something you can do different?

13:12Maybe it's not the decision. Maybe it's your execution. One of the things I learned about poker is that sometimes you can make the right decision, but you get the wrong result. Doesn't mean your decision's wrong. It just means the next time you try it, you might get a different result. Like I mentioned, when Nicole and I decided to sell Within Our Ninja, our software company, it was one of the hardest decisions ever, really, for us. We spent a decade building this software, serving over 30 ,000 customers. We had dozens of employees. Our identity was very wrapped up in being the founder of this business.

13:42but deep down I knew we were ready for a new chapter and Nicole felt the same way we wanted to focus on this business the$100 MBA teaching and new projects and the podcast and that excited me and we followed this same framework that I just shared with you where we asked ourselves the question in three years how will I feel am I going to be happy that I said yes to selling and the answer was yes. You know, my energy said yes. My integrity said yes. It felt right. Was it easy? No. But once you decide, you have a sense of relief. All the stress starts to disappear. That's the magic of clarity. And a lot of people think that if you want to change your life, I got to work, I got to study, I got to do research, I got to speak to people.

14:30No, actually change happens when you make a decision. Decision precedes action. So once you make a decision, you start taking action and things start to change. Before I go, I want to leave you with this. In business and in life, you'll never eliminate uncertainty. The goal isn't to be fearless or have 100 % clarity on everything in life. It's to act and take action despite your fear. You want to be guided by your principles. You want to be guided by what you want out of life instead of fear and panic. Trust me, I came from an immigrant family. Fear is a big part of being an immigrant, fear of getting in trouble, fear of standing out, fear of doing the wrong thing.

15:12And I had to eradicate that and I'm still working on it where it's like, I can't make decisions out of fear. That's not a good place to operate. You can't really soar if you're afraid to fly, right? You have to just say, hey, am I doing this out of fear? Then I need to rethink this. And guess what? If you get it wrong, you can adjust. That's entrepreneurship. That's life. Clarity is really the byproduct of having the courage to make a decision. Just one more thing before I go. Now, one of my favorite things about being an entrepreneur is that you get to exercise a muscle that a lot of people don't get to exercise as often as you do.

15:50And that is decision making. You're making decisions constantly as a business owner. Should I make a hire? Should I spend money on this marketing channel? What am I going to work on today? All that kind of stuff, all those decisions are on your plate every single day when you wake up and work on your business. So this is great because you become more and more in tuned with your decision making intuition, your muscles, you're able to make decisions quickly and execute as fast as possible. That allows you to make changes faster, allows you to progress faster. so as you earn your stripes as an entrepreneur and as you start building your business you're going to make more and more decisions and get better at this and only spending a lot of time on making big life-changing decisions and the medium small decisions are kind of easy for you now because you've done it so often and that's something to look forward to you're you're going to be way ahead of most people so that's one of the hidden benefits of being an entrepreneur being a business builder.

16:47So if anything, it makes you a better person. If you found today's episode helpful and you want more practical business lessons to help you start, grow and scale your business, the best thing you could do is subscribe to this podcast. Hit subscribe or follow on your favorite podcast app, the one that you're using right now, whether it's Apple or Spotify or ever you listen to podcasts. By hitting subscribe, you get our next episode automatically. And it's the best way to support the show. It's absolutely free. And it's a way for you to commit to growing your business. And now that you've subscribed, I'll check you in the next episode.