The ultimate value that executives bring to a firm is decision making. Strategy is knowing what to do, and, more importantly, what to not do. Strategy is a chess board of trade-offs, and the best executives are grandmasters of evaluating the costs, timing and pay-offs of certain moves.
As a tech executive, we have curated four (4) points you should keep in mind as you navigate a rapidly evolving technology landscape.
As your firm goes larger and larger, it is important to codify and build out a repeatable decision-making process that members of your organization can follow. Ray Dalio makes the business case for using radical transparency and algorithmic decision-making to create an idea meritocracy where people can speak up and say what they really think — even calling out the boss is fair game. As a business leader, it is imperative that you reduce your decision making process to a set of algorithms (rules) that your team members can use to arrive at a decision that is true – even in your absence.
Call to action:
Develop a decision-making process manual for your firm and cascade it to every level of the organization through trainings.
An option is a financial instrument whose value is pegged to that of an underlying asset. For example, an option can be pegged to the spot price of crude oil, and the relative value of the option will vary depending on the price of oil. Generally, options traders think in terms of potential ‘upside’ and ‘downside’. The difference between the potential upside and downside of an option is called its ‘option value’.
As a tech executive, as you consider different decision-making options, it makes sense to ask yourself two questions. Ask “what is the incremental benefit if I make this decision?” Then ask “what is the potential loss if I do nothing?” There are some decisions you will make that will create high upside, but there are other decisions you need to make in order to minimize losses. Both are important.
Call to action:
Create an option value tag line in your meeting routine. Before any meeting ends and a decision is taken, your firm should always ask “what is the option value?”
“The thing I have noticed is that when the anecdotes and the data disagree, the anecdotes are usually right. There is something wrong with the way that you are measuring it,” – Jeff Bezos
As a tech executive, ensure that you have unfiltered user feedback channels. There is the tendency to rely on hard data and make decisions based on statistically significant results. While there is value in using hard data, the problem with statistics is that it ignores outliers and samples on the dependent variable only. Looking beyond the data involves listening for anecdotes, and user stories. When hard data and qualitative data do not match then it is indicative of a measurement problem. It may be indicative of some data sets that are not currently collected. The chief way to know what additional data sets you need to start collecting, or to know the additional analyses you need to do on the data you have comes from listening to customers and identifying areas of dissonance between what the numbers are saying and what your customers are saying.
Call to action:
In your firm, always ensure that reports begin with anecdotal voice of the customer segments. Also, ensure that customers have a direct channel to reach you as a chief executive.
A growth mindset means placing a higher value on learning than on short-term results. “The day the learn-it-all says, ‘I’m done’ is when you become a know-it-all,” says Satya Nadella.
A growth mindset is the underlying philosophy that gives rise to disruptive innovation. The drive for short-term results drives sustaining innovation. Whilst sustaining innovations are useful, it is disruptive innovations that push the envelope around knowledge and create brand new industries. As a leader, you should incentive your teams based on the velocity and quality of learning in addition to their ability to achieve short-term results.
Call to action:
Ensure that your firm’s performance management system rewards failure that leads to experimentation and new information.
In summary, the four traits that tech CEOs need to show up with daily, all focus on mental models, decision-making, and customer-driven management. Poatek uniquely applies these approaches to building products. We are a leader in providing state-of-the-art services across the entire financial services technology stack. We have a unique combination of strong technical expertise and experience serving clients in the financial services space across Europe, US and Latin America.
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