How to avoid making slapdash U-turn decisions in your startup

At some point all startup leaders will make a bet-the-company decision. To make a good decision requires both prediction and judgment. But how do you get better at both – and when is it the right thing to do to reverse a decision and make a U-turn? Most of us change our minds all the time on the small stuff, but making a big decision is tough, and sometimes you realise you’ve made a choice… and it turns out you’re heading in the wrong direction.

Circumstances change, new information comes to light, our objectives evolve, so it’s normal for our decisions to develop with them. You may agonise over a U-turn, but suffering a period of self-doubt and a few embarrassing conversations is a small price to pay for making the right choice, second time around. John Maynard Keynes, the C20th economist, summed it up well: when the facts change, I change my mind, I alter my conclusions.

So, don’t ever rule out making U-turns in your startup, because one day you will face that challenge. When you realise you’ve made a wrong turn on a big issue or in a crisis, it can feel unnerving with the need for a rapid response. Searching for the right answer is pointless, this is the realm of unknowables. In this domain, a startup leader’s immediate job is to stench the bleeding, acting to re-establish order, working to transform the situation from chaos to stability.

Doing the right thing because of a change of heart is better than pursuing a policy that will cause harm. It’s about judgement and authority too. Beyond the subjective nature of the ‘right thing’ there are also moments when the momentum is pulling so strongly in one direction, it becomes inevitable. But before we look at the right way to make a U-turn decision, let’s look at lessons to be learned from the government’s several screeching U-turns in their Covid response, highlighting how not make and communicate U-turn decisions.

Let’s start with an obvious point: governing in an unprecedented global pandemic is not simple. When coronavirus hit many of the government’s plans went out the window, ministers forced to react quickly to events. But it’s also pretty obvious that the government has changed its mind a lot in the last few months. In the last fortnight, over A Level/GCSE results and face coverings in schools, their positions changed significantly in a matter of hours, and its this frequent, seemingly knee-jerk reactions which creates instability and lack of confidence – key things to avoid in U-turn situations.

That’s led to real concerns that government don’t have a grip on the moment, and strategy and policies keep evolving without clear thinking. There comes a point in time when strategy-makers have to be firm, clear and certain, giving reassurance. All I’ve seen is the government making U-turns is reacting to pressure questioning their decisions, rather than shaping the response. That undermines confidence, as it appears the government is devoid of the ability to make a difficult argument and is making it up as it goes along.

Welcome to Education Secretary Gavin Williamson’s disasterclass, where incompetence is his core curriculum subject. Williamson, who exhibits no passion for his brief, endangered an entire A-level generation. On the one hand, the decision to cancel exams and have results set by an algorithm, using inadequate and patchy information about pupils, was made in April, so we must consider that he only had five months’ notice that students would not be sitting their exams and to come up with ways of handling the situation as fairly and accessibly as possible. However, each day seemingly brought new layers of unpreparedness.

Williamson insisted allowing pupils to use teacher assessed grades in lieu of exams would be unfair, as it would give a 13% inflation in grades this year, so instead he opted to use the controversial algorithm to downgrade the A-level results of 39% of pupils. The upshot was such a demonstrable shambles, that on 13 August, Johnson declared of the English A-levels: Let’s be in no doubt about it, the exam results that we’ve got today are robust, they’re good, they’re dependable for employers.

Four days later, following outrage over the downgrading of marks, Williamson announced that the algorithm-moderated results would not stand.

Williamson is present, but not involved, or, to put it differently, my attention was recently drawn to a way of distinguishing between white and blue collar work in the US – the America that showers before work and the America that showers after work. Williamson strikes me as are very much a man that showers during work.

In a crisis, you need to understand the limitations of both the evidence and the process through which it is channelled, and difficult as it might be, be prepared to act in the absence of scientific certainty – there weren’t enough facts, so make a judgement. Poor decision making is not an inevitable consequence of a crisis. But in a fast-moving situation, there may be little time or opportunity to fix early mistakes. That means thinking fast and considering implementation at the outset are all the more crucial.

The best decisions are made when you know not just what you want to do, but why you want to do it, within a wider sense of a convincing strategy. Greater focus on why this would have led to better outcomes all round, instead Johnson is ‘governing in hindsight’ with a series of forced U-turns, with the speed and frequency of policy shifts the crux of concern.

These are unprecedented times and you can’t expect to get everything right first time, but the propensity of U-turns suggests that the decision making approach is flawed. So, what can we learn from the government’s repeated screeching U-turns on how to do it better for your startup when facing the need to change a decision?

1.        Be less certain

In May, Williamson said that all primary children in England would have four weeks in school before the end of summer. But on June 9, he said there was ‘no choice’ but to scrap the plans amid concerns that the two-metre social distancing rule would make a full return impossible.

Nobel-prize-winning psychologist Daniel Kahneman said overconfidence is the bias he’d eliminate first if he had a magic wand. It’s ubiquitous, the chances are good that you’re more confident about each step of the decision-making process than you ought to be.

So, the first rule of decision-making to avoid U-turns is to just be less certain about everything. Think choice A will lead to outcome B? It’s probably a bit less likely than you believe. Think outcome B is preferable to outcome C? You’re probably too confident about that as well.

Once you accept that you’re overconfident, you can revisit the logic of your decision. Have you prepared for a different outcome than your expected one? You can also practice aligning your level of your confidence to the chance that you’re correct.

2.        Ask How often does that typically happen?

The Government promised regular testing of two million care home residents and staff, starting July 6; Professor Jane Cummings, the government’s adult social care testing director, said that the earliest date by which it would reach all care homes was now September 7.

Kahneman uses the example of when he was collaborating on a book and asked his co-author to estimate the date on which he’d complete their first draft. He said between 18 and 30 months. Then he asked an experienced author, who had been involved in many textbook projects, how long it typically took. He answered, 40% never finish the book, and he couldn’t think of a project that had finished within seven years. The person’s mistake, and the point of Kahneman’s story, is that they should have thought about how long similar projects typically take.

Research suggests the best starting point for predictions – a key input into decision making – is to ask How often does that typically happen? The idea with both prediction and judgment is to get away from the ‘inside view’, where the specifics of the decision overwhelm your analysis. Instead, you want to take the ‘outside view’ where you start with similar cases before considering the specifics of your individual case.

3.        Accept there is no silver-bullet solution 

Johnson pledged a world-beating test, track, and trace operation to isolate new infections would be in place by June 1. The much-vaunted app, trialled on the Isle of Wight, has still not been launched. The head of the UK’s Test and Trace programme, Dido Harding, has refused to put a timeline on when the app could be launched. 

We badly want a silver bullet solution, a simple action that will leapfrog the competition or supercharge performance in one fell swoop – but the next time you ask yourself Is there a simple solution to this problem? be prepared to answer probably not.

The pressure to make the right decision is huge. That makes it even harder to say that we made the wrong choice. Failure is recoverable, regret is much tougher.

 4.        Consider alternatives explicitly

Building on the first three points, recognise decision making is about choices, and you can’t make good choices without good alternatives. Most of us do not explicitly formulate and evaluate alternatives in making big decisions – we are focused on the answer.

So, imagine this scenario: you want to expand your online capabilities. You can build your own team and invest, or consider strategic partnerships, and joint venture arrangements. The act of formulating and evaluating explicit alternatives invariably improves the quality of decision making. The next time someone recommends a course of action, ask two simple questions: What alternatives did you consider and reject? and Why?

5.       Have a strategy and use your U-turn to inspire others  

25 August: advice on wearing facemasks in schools was changed overnight. The communication of that decision was a bit messy. On Monday, deputy chief medical officer Jenny Harries played down the need for face coverings. Just over 24 hours later, the government was announcing its policy change.

There is no need to apologise for a U-turn, you can justify it by explaining the reasoning behind your decision. Be confident, holding onto your conviction. Your boldness in changing direction can inspire others, lots of people wish they had the courage to change course too.

Acting on your awareness is a critical step, and acting sooner rather than later may actually save the day. A deep understanding of context, the ability to embrace complexity and paradox, and a willingness to be confident and show flexibly is required for leaders who want to make things happen despite U-turns in a time of uncertainty.

6.        Don’t underestimate the challenges involved in execution 

Back in June, ministers defended the decision not to pay for free school meals in England over the summer, highlighting other chunks of money given to councils to help. Marcus Rashford’s campaign made that defence less sustainable. The outcome: Marcus Rashford 1, Boris Johnson 0, and the government with egg on face.

The complexities associated with a big-stakes decision rarely end with the decision itself, research indicates that only 12% of large-scale changes are executed as intended. That’s because change is hard and the bigger the change, the bigger the risks.

All leaders, startup and government, have to demonstrate on a perpetual basis that they are heading in the right direction and broadly taking the correct path. Too many U-turns and the impression is of leaders simply keeps getting things continuously wrong instead, with credibility being chipped away.

Frequent changes of heart can be damaging, but a U-turn is not a sign of weakness. You shouldn’t beat yourself up when you decide to change track. Circumstances never remain static, so why should our responses to them be forever locked in their initial form? But when asked to provide direction, don’t nod along with whatever bumper-sticker solution is available.

A startup faces many unknowns, and things change rapidly, so U-turns can be an effective tool if done right, but too many undermines any pretence of leadership, it looks slapdash. If done swiftly, the pivot looks strong, reactive, and decisive, and is often the right thing to do.

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