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Jeff Bezos Decision Making Framework | How to Make Fast Decisions?

1,970 views Wait, is this logic right? • May 12, 2023
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Slog Reference: Decision making like Jeff Bezos

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Improve decision making skills with Jeff Bezos decision making process. Jeff Bezos uses a brilliant framework to determine whether a decision can be made quickly or whether you need to take time and think about all the possible outcomes before enacting it. It's the framework that if learnt correctly, can dramatically help you improve your decision-making skills and make you faster at making difficult decisions.

Learn what is the Jeff Bezos framework for decision making and how to transform your slow decision-making to quick decision-making skills in this episode of FutureIQ.

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Listen it on the podcast provider of your choice: https://tapthe.link/FutureIQRSS

Chapters:
00:00 Introduction
00:55 Principle 1
03:57 Principle 2
07:20 Principle 3
09:20 Principle 4
10:55 Principle 5
12:00 Anti-principles
12:40 Be customer centric
14:07 Write press release first
15:43 Bezos anti-principles

#futureIQ #decisionmaking

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Decision making like Jeff Bezos

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Transcript

and then it becomes decision making by the person with the most stamina I disagree with that I don't chill all 24 hours I chill only for 23. I'm going huh customer Centric yeah but you so Jeff Bezos is one of the richest people in the world and Amazon is one of the most important companies in the world we know that all of us um Bezos created Amazon from scratch almost 25 years ago the question I have had in my mind for a while is how has he achieved this what did he do to achieve this so I think a lot of people have looked very closely at what Amazon does and how Jeff Bezos runs Amazon there's a lot of analysis on
that what I have done today is pick one sliver of that which is his decision making uh strategies right okay we are going to look at three four principles all related to decision making okay so let me ask you a question should you make decisions quickly or should you make them carefully well the speed of decision making more important or is it more important to consider all factors and make the right decision me personally I consider all factors before making a decision because I want to be absolutely sure of the decision but then the problem is that you will move to slow your competitors will go ahead of you you will get stuck in analysis
paralysis that does tend to happen so are you saying that I should take decisions quickly and whether actually that was a trick question okay so uh okay the most important principle Jeff Bezos has related to taking decisions is that there are two kinds of decisions okay there are two kinds of situations uh what he calls uh two-way door decisions versus one-way door decisions okay what you have to ask yourself is that once I take this decision can I reverse it easily or not okay okay if you can quickly reverse it and come back to the same situation you were in earlier that's a two-way door decision yeah you went in you came out okay whereas if it's a one-way door you once
you take that decision there is no going back ah smart so first decide whether this is a two-way door decision or a one-way door decision for two-way door decisions take decisions quickly quickly quickly quickly right because it's always easy to remind them yeah don't overthink them speed is important right people with speed will usually outperform people who do things more carefully but when it is a one-way decision huh take your time collect data try to simulate the possibilities may do maybe do little mini experiments and only then take the decision so the first decision I need to take is whether the decision I'm about to take is a two-way decision or a one-way decision and it's not difficult okay so
if you are getting married versus if you are dating somebody which one is a one-way door decision on which one is two way okay listen easy right it's kind of easy because uh until recently one of them used to be a one-way decision and the other used to be a two-way decision but these days it doesn't really both of them are two-way decisions no no no no no no no no no Society still gives a lot of importance to marriage once you get married it is really difficult to back out of it right well if you look at all of the paperwork and everything involved Fair I'll call that a one-way decision in that sense
sure okay yeah and usually and yeah part of it is you need to take a judgment on whether this is one way or two way but usually in real life you'll realize that part is not hard right the hard part is that when there is a one way door decision then how much thinking should you do correct at what point do I stop thinking and not get India can engage in that right analysis paralysis as you said Bezos has something called the 70 rule second principle what he says is that when take the decision when you have around 70 percent of the data so okay right uh usually a lot of people have a problem that they want to collect all
the data they want to have all the information and then make the decision that does lead to analysis paralysis or at the least it leads to you being very slow and your competitors getting into your UDA Loop okay UDA Loop is covered in a different episode uh but you need to move fast right right if while taking the decision you waited until you got 90 of the data that is too slow hold on was spelled o-o-d-a right that is observe Orient decide and act so this is a principle which uh came in from fighter fighter pilot called Boyd and is one of the more important Concepts in decision making one second he was a pilot called no no
void he was a pilot and he coined Ura yes o-o-d-a that is correct the Marathi and Hindi guys will appreciate this joke okay anyway coming back to the second principle 70 tell us about it so uh don't wait for all the data you cannot wait for all the data the best managers the most successful people learn to take decisions with partial data which is 70 all right but wait till 70 don't take decisions on like 30 percent of the data okay so now I have seventy percent of the data I am about to take a decision is there something I need to be very of careful of um I mean no I just again related to the
same concept right that you have to take even the slow decisions you have to take quickly okay one of the things a lot of people do is collected whether a committee to help with the decision and this is a good thing right this is how you collect the data this is how you collect the various viewpoints correct but you have to be careful to not make this like you know like a full unanimous committed decision if you try to convince everyone that is again going to take uh too long okay especially in a business setting if you say that all these people have to agree before we move ahead then nothing gets done if two people are
not agreeing what is going to happen is that they'll just be at loggerheads until one of them gets tired and gives up and then it becomes decision making by the person with the most stamina you don't want that right yeah you don't but again then you don't have to um you know what if you can't convince the other people at that time what you do is you pick one person who is the final decision maker okay and then that person makes a decision and the other people disagree but commit principle number three disagree but commit what that means is that okay I don't like this decision I disagree with this but now that the decision is made I
am 100 behind this ah disagree but commit that sounds like a smart thing to do because yeah but there is an interesting sub principle there right okay now there's a manager and there's a junior uh the junior is supposed to implement something but wants to know uh what strategy to use right very familiar scenario the junior they decide they're trying to take the decision and there is a disagreement who should take the decision typically uh what happens right manager I am Senior I take the decision and the junior has to do it Bezos says no usually the if the junior is after the manager has explained his thought process right if the junior is still
insistent on their uh approach then the junior should take the decision and the senior is the one who should disagree but commit okay wow because the person the junior is the one who has who is doing it they are the one closer to the situation right again this is also a concept from the UDA Loop uh we will come to that but take decisions should be pushed closer to where the action is and the higher ups should collect data but then let the lower down people take the decisions so I think people are going to clip this part of the video and they are going to share it heavily on WhatsApp especially in office group chats and office lacks
and all of the working whatever groups that they are working on the junior should take the decision the manager should disagree but commit Absolutely I'll tell them Bezos said so all right so uh my one of my analysis paralysis is because I get tired after thinking too much is there a way to kind of do better there actually there's a bigger problem right at least you realize you are tired lots of people don't realize they're tired oh and they take bad decisions so business principle number four is that one he likes to sleep eight hours a day okay if you are sleep deprived you are going to make bad decisions second is he likes taking decisions in
the morning in the 10 a.m to 12 noon time frame when your mind is fresh everything is clear that's when you take the best Decisions by evening you're tired and you just want to get things over with and that's not a good time to take decision but also notice that he didn't take decisions at 5am because what he wants to do is wake up normally peacefully have his tea coffee butter around in the house you know just chill in the morning that chilling in the morning is also important to him wake up calmly chill slowly get to work and then take decisions quickly the guys aren't exactly like me here Matlab I don't understand why he has 200 million
dollars and I barely have 200 Rupees to my name in my bank account what is this this is unfair this is absolutely unfair no no the problem is that he doesn't chill all 24 hours okay I I disagree with that I don't chill all 24 hours I chill only for 23 and one final uh principle I want to introduce here number five um uh again related to decisions is be customer Centric okay okay and now I can imagine everybody going ha customer Centric yeah but you know that like who in the world doesn't want to be customer Centric but this is actually a more surprising thing than most okay okay because what being customer Centric means that you are not
employee Centric you are not profit Centric what it means is that if you have a choice between making more profit or giving the customer uh a cheaper product you go for the cheaper product if there is a choice between a customer being happy versus an employee being happy you make the customer happy okay what like be customers a trick so that is insane levels of customer centricity like you would put your customers happiness over your employees yes that's a business principle I'm not necessarily saying that you should follow it what I'm saying is that when I first said be customer Centric all of you in ordered your headstring that is very obvious now suddenly it doesn't sound obvious does
it it does I want you to think about this carefully in fact I have a principal saying that whenever somebody gives you a principle like this ask what is the anti-principle ask what do I have to give up so when you say be customer Centric you ask what do I give up in exchange so I have a peace of mind if I'm going to be that The Eccentric if a principal doesn't have an anti-principle then it's just a feel good statement that you forward on WhatsApp and forget like three minutes later okay so Centric like crazy I think that explains why some people in his warehouses don't get to go to the bathroom yeah so I have an uh another interesting
example right yeah that pose is like a legendary company uh in Las Vegas right and they were legendary for legendary customer service yeah do you know what happened to them they shut down I think no Amazon bought them because Amazon really really believes in customer Centric yeah correct yeah right there are a lot of stories of Amazon being highly customer Centric and really weird because like I remember this one thing I think I read it on Reddit um where somebody had ordered a SSD 120 DB SSD and ended up getting a shipment of 10 graphics cards instead Amazon like keep it yeah so I mean also I can imagine a lot of readers are going to
say no Amazon is not customers they sell to be a stone instead of my iPhone it happens right yes happen what I'm saying is what is the strategy at the top right at the lower levels everybody can't be perfect all the time and also you know Amazon does a lot of horrible things okay okay what I am saying is these are the good things that you can pick out of okay all right so uh five brilliant principles from Jeff Bezos is there anything else that differences can teach us one one that I really uh like huh uh he says that suppose you want to build a new product uh right uh this is for all of the startup entrepreneurs out
there listen carefully very carefully he says that you know write the press release first okay then work backwards on what product what the feature should be and then what the architecture should be right because if you don't have a press release that is going to be impressive to customers and investors and lay people then it's not interesting enough to do right yeah that backwards from the final output that actually makes sense because if you don't know how you're going to pitch it sell it then there is no sense making it so all of you startup entrepreneurs write that press release now like write it now um so you know if sugar is sitting there telling me that but this is opposite of
government no it is not okay listen to our episode on Karma and watch it explain that while planning you do look at the goals yeah but then while execution and after you are done then you are supposed to ignore the goals all right since you uh mentioned that every principle has to have an anti-principle uh tell me why you shouldn't listen to Jeff Bezos well a lot of these principles are such that there have been major successful companies which have done the exact opposite and they have been successful right okay so um for example there are companies who are like very focused on making employees happy and if that results are being unhappy tough luck you can fire
the customer there are companies uh which uh you know are like we make fast decisions move fast and break things okay yeah break something major that's also fine so a certain person in a gray hooded sweatshirt comes to mind yeah so um I am not saying that you just follow all these blindly what I want you to do is evaluate each one carefully ask yourself are you this kind of person and ask yourself if you have 200 billion dollars no again now you are not being permanent right I know that's why we are looking at the principles the process to be followed not the end goal listen guys of the guy for having 200 billion dollars I am
allowed I am a human well looks like you need more lessons from the Gita we will get to that also we will get to that in another episode but this was Mishra that's Naveen this is future IQ thank you