Make Better Decisions Faster

27:42Number two, will it help me? No, or just a little bit. No, I need big steps, right? That's why that step one of what to stop doing is so critical. Oh, I love it. I mean, I hate that. I hate it. I know. I hate it, but it's so right and it's so true. It's so fun to start things. It's so hard to stop things. Absolutely. So fun to say yes, so hard to say no or not now. Especially, and I might add to this, especially when something is successful. On paper, we have a lot of ventures that are very successful and that are contributing like profitably. Yes. But they are a distraction to the much big step that we need to take in a different direction.

28:19And so that's hard. It is hard. It is hard. And I feel after listening to a lot of your work and then this conversation, I'm confirmed last night at dinner, I was talking to my husband and I said, I think we need to stop this. And he said, how did you get to that decision? I logically laid it out. And he said, great. So why haven't you already cut it? And I said, well, because I want optionality. So I don't need to make the decision now. So I'm going to wait till the very end because I need to see how the year is shaping up. And he said, it sounds like you're dwelling in a place of hedging your bets.

28:48Yes. And I was like, well, absolutely. 100. Right. But we have to understand optionality first, right? So what is a good option? A good option, if you think about option traders, right, they're really good at selecting options. Yes. So they buy options. So what are they doing? They're looking for an option that has a big upside if it works and a small downside if it doesn't. Yes. That's a hell yes option. Yes. Right? Mm-hmm. the hell no option is one that has only a small upside if it actually works and a huge downside if it doesn't okay those are the ones that we absolutely should stay away from and those are easy for me i'm the queen of no right i'm my my friends will call me the queen bubble popper because they'll come up with like i like this idea i was like yeah no it won't work yeah it's the ones that for me are there is a positive upside and even if it wasn't as good it's not that much of a low side.

29:47Okay, but I want to challenge you a little bit. Please do. One, this is not in my notes. It's making me a little uncomfortable, but okay, okay. So thinking about that it might not work is not a good way of deciding whether it's a good option or not. Or it might not be as profitable. Okay, let me give you two extreme examples. Okay. You have an option to pray the lottery or Russian roulette. Okay. Okay, so lottery, very very big upside if you win yeah right very small downside if you lose you lose a couple of dollars right but what's the probability of winning is almost zero but is it a good option yes because it has a huge upside if it if it works very small downside if it doesn't whereas if we evaluate it by the probability of success because again we're trying to protect ourselves from failing, we might have given up on that.

30:49Now compare that to Russian roulette. What's the odds of winning? It's five out of six. There's not many things in life that you have such high odds in your favor, right? So because we are so drawn to certainty, we might inadvertently pick options that are actually like Russian roulette. Why is it such a bad option? Because what's the upside if we win? We stay alive. We were alive before we started, right? What's the downside if we lose? We lose our head, which is kind of an important part, right? So it's all about us not thinking about the probability of success, it's thinking about the impact of success that makes all the difference.

31:36So when you give that framework to yourself and to your team, it'll help you and all of us select better options. Dr. Allen, I feel very annoyed right now. I feel annoyed because it's so clear. It's so clear. And I came in with this example that I have this conversation with my husband, but what it brought up for me were three other things. Three other things that the upside is not the lottery ticket. Everything that I'm deciding between, I am in a place in my life where I want the lottery ticket life. Yeah. And I'm playing the lottery while having two Russian roulette opportunities in my back pocket.

32:15And I'm not thinking about it that way. Yeah. Hot dang. Hot dang. There's another thing about setting really big goals that are so ambitious, it feels impossible. So there's a story behind that. I don't know if you've read Dr. Benjamin Hardy's and Dan Sullivan's book. Okay, number one, had Dr. Benjamin Hardy on the podcast. Check out that. It was one of the, he was on the podcast in late 23. He has one of the highest podcasts in all of 23 and almost 24. I will link it in the show notes. But yes, big fan. Love him. So I was at Joe Polish's Genius Network. He had invited me to speak on the stage, which I was super, super honored about.

32:54And we were setting up for the interview. And Joe said, you know, while we're setting up, I'm just going to ask the audience, I want you to think about three things that can increase the profitability of your business because there's a group of entrepreneurs. can increase the profitability of your business by 10%. Think of three things, right? So we continue setting up and we're about to start up and he says, oh, by the way, Dr. Barnard, what did you think of my question? And I said, it's actually a very bad question. And he's like, what do you mean? I said, well, how many ways are there to increase the profitability of your business by 10 %?

33:37there are many many many ways right i can increase it by increasing my selling price by increasing the volume that people buy the frequency that they buy the variable cost reduction operating expenses there's so many ways i said so if as entrepreneurs we are trying to find the one thing to focus on it's difficult using percentage as an improvement target is a really bad idea. Whether it's 10 % or 100%, it's still too small, which means there's too many opportunities. And I'll get back to having the 100 list of things that I'm working on. Because each of them can help a little bit. And a cent plus a cent plus a cent plus a cent will finally accumulate to a fortune?

34:26No, it can never. So Joe asked the group, how can you increase your profitability by 10 %? And then you even said, well, you took it a step farther and said, if you would ask them, how do they increase the profitability by 100 %? You said that that's still too much? It's too still. So I said the right question would be, ask them, is there one thing that can increase your profitability by 10X, not 10 %? Or by 100X, not 100%. Wow. And I said, so think about that. How many ways are there to increase your profitability by 10X? There's very few. There might only be one, but that forces the brain to find that one because even if you are only 50 successful it's still 5x or 50x right so that's the other element of it is to it's really important to set very very ambitious goals to the point where everybody says now it's impossible for two reasons one is that it will help you to find that one thing yes the other thing is i want you to think about what happens when we say that the goal is realistic.

35:32Why do we say that something is realistic? It's because we think we know how to do it. Else we wouldn't call it realistic, right? But that means we won't think out of the box. It's only when we set a goal that's absolutely impossible and then we ask ourselves it's impossible unless that we think completely out of the box. So those are two really, really strong reasons to set very, very important and high goals, but there's a warning with it. Both for yourself and for your team, do not confuse a target with a commitment. A target is inspirational. It gets us to think out of the box. A commitment is the minimum we have to deliver.

36:19When we turn a commitment into a target, or vice versa, it immediately becomes a self-fulfilling prophecy. People will argue and fight to get the target to become lower and lower, and then you're stuck. Don't confuse the target for the commitment. So this feels like a very good segue. We're talking about 10x thinking. We're talking about that being a forcing function to cut away all the other noise and say, this is the thing I'm going to focus on, because even if I only reach half of that, it's still better than any of the other options or paths that we could have chosen. Okay. Now, when I say this, a lot of entrepreneurs are overwhelmed and they feel very overloaded.

36:57And so when we're all of a sudden getting down to the things that we could be doing, we're lessening it, but it also impedes us from making good decisions. Because all of a sudden, we're like, okay, there's so many factors. Can you explain why and how we can make good decisions faster? So what if I had this like 10x idea and I was like, okay, I can get down into maybe there's like two or three and all of a sudden I'm paralyzed between, well, which one do I choose? How do I make a better decision faster? Right. So I want to go back to that 100-day, one-day task, right? Yes. So the first thing that we want to do there is how do I get a one-day task to take one day?

37:32Yes. Not 100 days. Yes. It's don't overload yourself. That's a key thing. I mean, yes. So stop, constantly evaluate what's on your to-do list and just stop most of them. because unless you do that, everything will take 100 days. That's the problem, right? Right. Every one day task will take you 100 days and stuck in some of those five tasks out of the 100, those are the ones that really, really matter that can change everything for you. So by stopping the 90 at least will release a lot of capacity. And now a task that used to take 100 days can take 10 days or five days or maybe one day. So that's the first part.

38:14When it comes to decision-making, so imagine I have these few decisions, few options left, and I still have to pick between them. Yes. So they're a really useful framework to use is a framework that Jack Canfield popularized in his book, Success Principles. It's E plus R equal O. I don't know if you've ever heard of that. So E plus R equal O. So E stands for events. So these are the things that happen to us. They can be positive or negative. You can think of them as stresses in our life. Could be a positive or negative stress. They're typically out of our control. Can we influence them? Probably, but they're typically out of our control.

38:58The R is for response and the O is for outcome, right? And what Jack Canfield used this formula, he said that the number one principle of success is to take 100 % responsibility for the outcomes that you get in your life. If you blame the events, you can never move forward because then you completely expose the randomness of life, right? So what I do with that formula to help even kids make better decisions is to say, let's have some fun. Let's look at the math behind this, right? So imagine a positive event happens to you and you have a positive response. So I say, Jasmine, wow, you look beautiful today.

39:45And you say, thank you so much. My energy levels was a little bit down. That really made me feel positive. So it's a double positive outcome, right? When you have a positive event, but a negative response. So I give you the same compliment and rather than responding positively, you go, what do you want? Right, it kills it. If there's a negative event, Imagine I criticized you and rather you defending or tacking back, you go, oh my God, sounds like you're having a bad day. How can I help? It wipes it out. Negative event, negative response, double negative, right? So that when it comes to decision making, this is as a sort of a decision making 101 that we teach the kids.

40:30It's a really good formula to think about it because it also helps us to think about the mistakes that we can make, right? The first mistake is with an E, is we don't distinguish between noise and signal. Noise is all the things that are happening that we shouldn't respond to, but we are. How can I stop most of that? The signal is those five things or three things that I should concentrate on. When it comes to the R, that's where it gets deep. We often don't respond, but we react. we make about 35 000 decisions every day which is based on what you said previously is where part of the overwhelm comes from right we are completely overwhelmed and unfortunately women suffer from this much more than men there's something called decision fatigue it was picked up first when i I studied parole board judges and I tried to figure out what gives a judge the reason for granting parole or not.

41:38And what I noticed is beginning of the morning when court starts, about 60 % of people get parole. Before lunch, zero. It's like, what the hell is happening? Is there some bias? Are they scheduling the court with all the easy cases in the front and in the most difficult? And I found that it's decision fatigue. So as you are fatiguing your mind, it gets overwhelmed. It will default to the safest possible decision, which is in that case, don't grant. But in our lives, it's don't take action. That often feels like the safest decision. and women struggle with this much more than men simply because you're making many more decisions than we do.

42:24You're thinking about everybody, including like what to wear. You know, woman thinks about that for an hour a day. Most men, five minutes, right? So that's the part is why do we react? It's because we feel overwhelmed and then we react emotionally. So we over or under react. and that's where that's the biggest mistake we should prevent it's to say of all these decisions that i'm making every day the majority of them don't matter that's good news they really don't matter what i'm wearing what i'm eating how i get to work you know but there's a few of them that really matters a lot and those are the ones that we want to think about right so daniel cardamon who wrote a famous book, Thinking Fast and Slow.

43:17He called it System 1 and System 2. He said, System 1 is our fast and automatic mode of thinking, right? You're not even thinking about it. System 2 is our slow and more deliberate way of thinking. So if it's a really important decision, the worst advice that you can get is to go 5, 4, 3, 2, 1, decide. It's terrible advice. I cringe every time I hear somebody give that because it's only valid under one condition. When you have built up so much intuition about that subject that it becomes instinctive. Got it. Right. But if you don't, if you are new to it, the worst thing is to trust your gut. You haven't put in the 10 ,000 hours to become an expert.

44:04Rather phone somebody that has that expertise. So the second mistake, first mistake is the events. We respond to things we shouldn't. The R part is we react, we don't respond. So how can I slow myself down? And often that comes from being comfortable with not knowing. As soon as I realize, I don't know what the best response is here. I need to think about it. That gives me that space, that small little space that I need to get into flow. I don't know if you know that there's five F's when it comes to stress responses. Fight, flight, freeze, and I don't know the other two. Yeah, so the easiest way to remember it is imagine you're in the wild and there's something really dangerous coming your way, right?

44:56The safest option is to flee. If you can, flee, right? If that's not an option, then it's freeze. please stand still hope they don't notice you okay right okay number three is fawning so it's different from freezing it's actually playing along being completely subservient pleasing them and hoping that they won't kill you okay right which is often the best option right then it's if that doesn't work and they're really starting to attack you then you have to fight those are the four instinctive f's of stress responses but there's another one which i know is an important word for you flow right what does flow mean it means pausing and igniting your cognition rather than intuition or instinct which is the fast and automatic way and let me think for a moment, let me be conscious of what's happening around me and see what's the best possible response here.

46:04So when I'm in flow, I become hyperproductive, hypercreative, but it requires that pause. And I can pause by breathing, by just taking a deep breath. I can pause by saying, I don't know what the best response is. Let me think about it, right? Whatever you need to do to get you to pause, that triggers the system too. Makes you think about it. What are my options here? What is the best option? Okay. Events plus response equals outcome. Yes. My greatest opportunity, I have become so much more honed, much to the chagrin of many of the people who I've been friends with, is now I know signal versus noise.

46:45I've cut a lot of noise out of my life. Yeah. By cutting out noise, I've also cut out people and time spent with people, and that's been difficult. But now my signal is so clear. What I need to do the deep work on is not having a reaction, but a response. Let me clarify. Please. So I don't set confusion. If you have built up enough intuition about something, enough instinct, you should react in fully automatic mode. it's when you haven't that you should respond where you want to think deeply so it's it's slowing down your thinking will help you make a faster decision and you know for me it's deeply ingrained and it's from childhood it has been conditioned that i am the i'm the eldest of five children in immigrant family and i had taken a lot of responsibility and so when you have so much responsibility and my mom battled cancer for nine years.

47:40And so I stepped into the family in that role. It was to have the reaction was always, it was Jasmine will always have the reaction. She'll know what to do. And what I've done is carried that into business. And I feel like people are deeply responsible to me on the team for the vision. And so I'll give a reaction and I need to have the courage to say, I don't know. Give me a second. And I'm telling you when I can slow down, I make a much better decision and I receive this because I want different outcomes. I do. And part of that is just feeling confident that you can trust yourself and trust those people around you.

48:14Yep. You know, that allows you to slow down your thinking a little bit. And the five F's, flee, freeze, fawn, fight, flow. Flow. Flow. Yeah. So when should I go into flow is when it's really important, right? that at least I should take a few seconds or maybe minutes or an hour to really think about it. So the last mistake is what happens with an O. And that to me was very interesting. Very few people think about what they really want. And it turns out that that's massively important to decide how to respond, right? It's like, I remember it's like, you have kids that are naughty, right? And then you say, stop throwing the ball, you're going to break something.

49:05And then you hear the vase falling over and breaking, right? And now you react, right? Because you want to teach them a lesson, right? Versus pausing for a moment and saying, what do I really want from this? The vase is broken, right? I want him to really learn the lesson. If I react emotionally, if I act angrily, they're going to lose respect for me and forget about the bloody lesson, right? So I had this with my two boys. My ex-wife would react, she'd get very angry because she would warn them, you know, to stop throwing balls around the house and then something would break, right? And she would say, go to your dad.

49:47So I'd be sitting in the office and the two would walk in and I would say to them, okay, so tell me what happened. And they would point to each other, right? And I said, okay, so what do we need to learn from this? And what punishment do you think would be appropriate? Because we want to make sure that you remember this and never do this again. And they start fighting against each other. What's the best punishment? And I'm just sitting there and watching this play. But they give a punishment that they think is fair. And then they learn the right lesson. So we also need to think about that as every event that happened and we responded.

50:24Did we think about what the outcome is that we really wanted? And did we do a debriefing afterwards to say that we get what we really wanted or needed? And in the future, if I get another event like that, is there a better way to respond? I received that with such profundity because I had a conversation with our COO and we were talking about our growth projections. and there was a point, like an inflection point without additional staffing that we would be having more revenue, but at a lower profitability percentage. And so when I go back and I track to the outcome, the outcome isn't more revenue.

51:02The outcome is a certain percentage of profitability as indicated by me. And I was like, that makes no sense. And had I only looked at the factors, right? So I'm having my signal, I'm having the event money and then having a response. Very good. But what was the outcome? The outcome was a certain percentage of profitability that's important to me. And I think that now having this equation to anchor that in, I have a better communicative style of saying, that's great, but it's going against the thing that we ultimately want. Yeah. And that's so important because another thing that we kind of intuitively subconsciously do as business owners is we start confusing the means with the end.

51:38Yes. We start thinking about, my job is to keep everybody busy. No, my job is to create a company that has high value. And profitability is a key part of that. The multiple I can get is another key part in eliminating risks that can increase my multiples. But when you start thinking about, I'm looking at everybody, is everybody busy? Do I keep everybody busy? The coal mines is the same. They try to keep all the resources busy, right? Everybody's producing tons, but most of those tons are not needed now. They're just trying to keep busy. and it's the busyness that causes everything to take much longer and everything to be done much less than what we can.

52:21So if you think about that, imagine every person in your company is 99 % utilized, right? Everything will take years to complete. If they are sitting there waiting for you to assign them that one or two or three tasks that are most important, things will flow. Good Lord. Right? You don't want work to be waiting for resources. You want the resources to be waiting for the right work and get it done as fast as possible with the best quality, lowest cost and get it to flow. One thing that we started before the cameras were rolling, I said, what is the win? Like, what's the win? And many people will sit here and say, oh, I would like to point people to my podcast or I would like to have more people on my newsletter list or I'd like to have them to sign up for this thing.

53:09And when you sat in the chair across from me, you said, Jasmine, the only thing I want is to empower people to make better decisions faster. Yeah. When it really matters. That's the important part to add to that. Because most decisions don't matter. But there's a few that really do. And it's getting those right that makes all the difference. Being able to know what is a hell yes decision and a hell no decision. Everything in between probably doesn't matter. so one of the things that we were talking about was of the many things you do you have a series of apps that help people live in harmony can you explain how okay so it's harmonyapps.com but how did you decide to name the company that i really liked the idea of the naming behind it so as i mentioned i'm passionate about helping people make decisions so we're trying to understand in my research lab, why do we make and often repeat bad decisions?

54:06And part of it is we don't realize the consequences fully. It's like that crisis thing. We're actually in crisis almost all the time. So you want to understand why is it that we make bad decisions? And there are different reasons. One is we are more emotional than what we think, right? So we don't rationalize and then we decide, we decide and then we rationalize. We find reasons to justify what we've done rather than thinking through it. Another thing is like thinking about the overwhelm side. That's why some of the apps that we build is digital twins that can help us model a full supply chain.

54:47A recent example would be, you know, Ralph Lauren came to us and said, we're experiencing shortages and surpluses in our retail stores. what is the bad decision that is causing that? And with a digital twin, we can go back and say, this buyer bought this amount of goods at that price to get a price reduction, but now it caused us to sitting with too much, et cetera. So all of that is the range of apps that we've developed is called Harmony. And the reason for that is that when we are making bad decisions or when we are procrastinating and making a good decision, it causes disharmony. It hangs over us like a dark cloud and follows us around.

55:29So when we are able to make a better, faster decision that brings harmony back in our life with our partners and at work. I love that. So drallenbernard.com and harmonyapps.com. So entrepreneurs are the vast listeners of the show. Where would they go to get more information on how to learn more about the research you're doing and what you are putting out in the world? So before I get there, one more thing. So we said there's three things. There's the goals we set. Yes. There's the decisions we make. And then there's the actions that we take. Ooh. Right? So I don't want to leave without sharing just one insight on the actions to take.

56:09I learned this lesson from a business partner. Now, we got involved in one of the largest SAP implementations, a big IT system, $5 billion implementation. After six months, they were already six months behind on a five-year project and consequences would have been horrible. I got engaged. We helped them figure out a few things that they can do. We were able to catch up and deliver the project on time. And the executive of this company took me out for dinner and he said to me, you know, thank you so much for what you've done. Do you have any questions for me? And I said, yes, I'm curious to know what is it that I said that gave you the courage to take the action?

56:51It takes courage to take actions, right? It takes courage to make decisions, but it takes even more courage to action those decisions. And what he said, I'd never forget. He said to me, there was one thing that you said. You said, we're going to do an experiment. He didn't ask me to make a change or improvement. He said, we're going to do an experiment for the next month. And I realized that we don't learn from experience. We learn from experiments. Right. So if you think about touching a hot stove plate, right, as you touch it, it burns you. Imagine it burnt you a day later or a week later. How long will it take you to learn the lesson?

57:35so my last piece of advice is to think about every decision you make as an experiment to go and try create what i call a minimally viable experiment so you get minimally viable product which is a step further but it's to be very clear what's the assumptions i want to test and what's the fastest feedback i can get so good yeah so another f that i can add is not just the flow part but fast feedback. That's a double F. Double F. I'm sorry. So that to me is the essence of what I do is, you know, how do we get into flow? How do we get the right response, get into flow when it really matters? And how do we get fast feedback?

58:14Oh, so good. It takes courage to make decisions and it requires more courage to take action. To take action. That's when no rubber meets the road. And then when we tell ourselves we're going to take an action, we're not going to treat it as if it's the end-all be-all, when we take an action, all we're telling ourselves is this is an experiment and we're going to learn from the experiment and that will act as the gumption to get us to where we want to go. Yeah, and a good experiment is one that I'm clear what assumptions I'm testing. So I assume that if we made this offer, we will sell more or they will pay more.

58:45Great, what's the fastest way we can test that assumption before we even build a product, right? So good. That's a key thing. So getting back to your question about the app, so we've built various apps They're all under the harmonyapps.com. You can go there. So one of the apps is I took that E plus R equal O framework and took it to another level because one of the challenges with response is I always have two options. Yes. Right? Yes. So I can change something or not, or I can change one thing, change another thing. So I developed this method called the ProCon Cloud and there's an app there called Harmony Decision Maker and that will help you to find out is the problem that you're trying to solve really important enough what's the options you have what's the positives and negatives of each option because that's the other complexity we think response equal outcome there's always two responses and always two outcomes for every response so it teaches you how to think about your options what's the pluses of both and the minuses of both and then pick the best option one that gives me all the pluses without any of the minuses so that's a harmony decision maker app and then we have a whole range of digital twins that people can use to model their process.

59:54Okay, y 'all, you see why I had this man on my podcast? He is a researcher that's coming in and teaching us how to make decisions. And then he's contextualizing it for entrepreneurs specifically. HarmonyApps.com to get more information about him. It's DrEllenBernard.com. Thank you. Thank you. Thank you. He flew in from Las Vegas today and is flying home back to his research lab today to serve you. So please do me a favor and leave a review for the podcast or connect at drallenbernard.com. Dr. Alan Bernard, thank you for being here at the Jasmine Starr Show. Thank you so much. And I've just published a new book.

1:00:29It's called From Crisis to Catch Up to Keep Up. So it's available on Amazon. They're welcome to check it out. Great. Check it out and leave the man a review, y 'all. Thank you again. Thank you so much.