Manager'S Bounden Duty -- Decision Making

"Leaders' responsibilities are summed up mainly by two things: making decisions and using cadres."

For Chinese managers, it is useless to know the theory of decision making. The key is how to improve the level of decision-making in reality.

According to my understanding, there are three practical points.

Customer demand is the "heaven" of decision making.

In practice, what is the criterion for judging the quality of decisions?

Many people do not know where to start, and some of the books and theories of decision making are too complicated and abstract, or are constrained by deep mathematical calculations, which are not well applied in the real world.

And according to my experience, the "heaven" of decision-making is based on customer demand, and "what do customers need us to do?"

It should be the standard for all decision making of enterprises.

"What benefits do we make to our customers by making such a decision?

How will it affect customers?

Do we still have a better way to improve customer value? "

We must answer these questions before making decisions.

From the perspective of customer demand, we must consider the details of business models, business strategy formulation, and vacation time.

In essence, whether an enterprise's strategy is effective and sustainable and whether the business model is competitive depends on whether it meets the needs of customers that have not yet been fully met.

The more important the demand is, the more chances the company will succeed.

The success of Home Inn looks very simple. It only finds the business travelers' cost-effective housing requirements: bed is comfortable, clean and convenient to bathing, while entertainment, high-end dining and so on are not "luxury".

Therefore, designing the business mode according to the needs of the target customer group is not only pleasing the customer base, but also effectively reducing the operation cost, and has achieved great success.

The root of the seemingly insipid success is to accurately grasp the needs of customers.

The implicit demand of customers is often the source of corporate profits.

Cardinal Health has developed from a struggling drug dealer to the world's top 500 with a sales revenue of nearly US $50 billion.

The core of the growth process that involves countless decisions is a process of continuously meeting the implicit needs of customers.

"Customers' difficulties and troubles are often your opportunities."

They went deep into the needs of their customers, hospitals, unlike traditional distributors, who stopped taking drugs to hospital warehouses, extending their service antennae to all drug-related links such as pharmacy management, dispensing of patient pills, automatic replenishment and settlement, environmental treatment of waste drugs, and even extending upstream to the test and encapsulation of pills, so as to help hospitals deal with complex affairs related to drugs.

To help customers grow is business opportunities. If they can help customers to provide better services to their customers, it will be difficult to make money without thinking.

IBM's survey of global and Chinese CEO also shows that the best innovative thinking of 4/5 comes from outside the enterprise.

The partners and customers in the enterprise become the main source of innovation, which shows how important the customers are to the strategic decisions of the enterprises.

And details such as holiday arrangements should also depend on the needs of customers.

Our company's annual holiday arrangements are not in accordance with state regulations. We only ask customers how we can arrange our business operations.

On one occasion, the company's human resources department suggested that there was a traffic jam on Christmas day, and whether it was possible to leave work four hours earlier to improve employee satisfaction.

First of all, I commended the manager for taking the initiative to think. Secondly, I asked two questions: first, was the customer having a holiday?

Second, how can we serve our customers?

After a client interview, the manager cancelled his early commute.

In this way, decisions become simpler and easier to reach consensus in the organization.

A case later reinforced my idea of "customer demand" as a decision-making standard.

At that time, our customers often complained that the upstream enterprises had to rest on weekends and holidays. At this point, if they wanted to buy products, they could only eat "closed doors".

Therefore, after discussions at the company executives' meeting, we decided to launch the "year-round" supply service and become the first IT company in the country to stay in the same year.

This needs to do a lot of staff communication and persuasion work in the early stage. At the same time, we need to make major adjustments in the business process and the division and backup system.

Because we adhere to the "customer demand as a decision-making standard", we can overcome many difficulties and adapt to the needs of the new model.

About half a year later, through further investigation and analysis, we find that the customers in different parts of the country are different. Some of the provinces have mostly rest on holidays, but they usually work late.

Therefore, we also take the customer demand as the guidance, optimize the adjustment of "year-round service". In some areas, the supply service is still available on the 365 day of the whole year, while the rest of the region has resumed holidays and holidays, but it usually extends the delivery time. This improves customer satisfaction while controlling the rise of operating costs.

In the whole process of this case, "customer demand" has always been the main basis for our decision-making, and also the core idea of communication with the team.

Coincidentally, a recent president of China Merchants Bank and I talked about their customer service reform process and found that they shared similar experiences with us.

After thorough customer investigation and analysis, China Merchants Bank adjusted its working hours to 6 p.m., 1 hours later than other banks, because they found that many customers went to the bank to do various businesses before and after work.

In fact, these 1 hours will fundamentally change the internal operation of China Merchants Bank, which is undoubtedly a great challenge for business management. It is precisely these 1 hours that profoundly reflect the strategic positioning and decision-making standard of China Merchants Bank as a truly market-oriented bank.

Therefore, if you study your customers more deeply and comprehensively and truly understand your customers, your decision-making will be greater, and this decision-making method is predictable, mastery, and learning.

It is the most effective, simple and executable method for the enterprise to make decisions according to the needs of the customer.

Insight into the assumptions and preconditions in decision making

Any decision is based on assumptions and premises.

You may know this very well, or you may have this concept in your subconscious mind, but you may not know anything about it.

Grasping the assumptions and premises of decision-making is very important for improving the quality of decision-making.

Moreover, the assumptions and preconditions of decision-making change with time, environment and other factors.

Drucker, a management guru, believes that people's decisions are based on their own views, and the so called opinion is "yet to be proved".

For example, we will assume what kind of demand the customer has, what the competitors will react to, what speed the market will grow, and so on.

These seemingly simple assumptions are fundamental to decision making.

It is a good start to clearly list the "hypothetical" in our decision making, because we can verify these hypotheses by improving the facts and debates to improve the quality of decision making. Moreover, in practice, we should always pay attention to whether these assumptions are still in place and adjust accordingly.

Lenovo made a strategic move toward IT services in 2001.

In McKinsey's design plan, the assumption of decision is: first, the market of China's information service industry will develop at a high speed; at present, it can get good growth; second, Lenovo's PC market share has reached more than 30%, and rivals such as DELL can't adapt to the Chinese market. Lenovo's superior position is so clear that it can put more energy into new fields such as IT services.

However, the facts in the following years show that although the information service market has indeed been growing rapidly, it is far from being expected to be so fast and serious at the time. At the same time, Lenovo has great advantages in the PC market, but it is not rigid. With the rapid growth of domestic companies such as Tongfang, DELL's direct selling mode has been rising rapidly after the localization operation in the Chinese market through "disguised distribution".

The hypothetical contrast between the "positive and negative" hypothesis makes Lenovo suffer from both sides. Therefore, it has to shrink its business and return to PC, forcing it to turn from "geopolitical diversification" strategy to "professional internationalization" strategy. Then, the acquisition of IBM global PC business by accident is also due to woe.

In the past, Lenovo's decision making errors vividly illustrate the power of the hypothesis, which can be said to be "assuming and losing."

SONY made extensive market research before the invention of the Walkman, but customer feedback was frustrating: most people thought they didn't need the Walkman product, but SONY still decided to continue to develop, thus creating a great product and company.

At that time, the decision made by SONY to continue to develop requires great courage. Its "assumption" is that consumers need to listen to music and information anytime and anywhere, and they will also like this new product.

In the end, this assumption was established.

Therefore, many "assumptions" are difficult to investigate, often judging the trend, or gambling.

The more innovative things are, the less likely they are to "investigate".

As a result, innovation projects often require venture capital to share risks, while sharing huge gains after accurate judgment.

There is a popular saying in the Internet circle: "we all agree to do business that we all understand and do not do, because others are definitely already doing it."

This seems a bit absolute, but it shows that innovation business is different.

This leads to an important question of decision making: maintaining flexibility.

Once the assumption is not set up as expected, or the "assumption" has changed, the decision should be adjusted accordingly.

Therefore, managers' decisions on decisions must be very clear, rather than vague, without considering "assumptions" to make decisions.

The most dangerous decision is to have a large number of "assumptions" without knowing it, or to make decisions based on a large number of assumptions.

On the other hand, breaking through some so-called "hypothetical" assumptions is also an important way of innovation.

The success of the economic Fasthotel, such as home, is precisely because it breaks the value proposition and cost distribution of Tradition Hotel, innovating and subverting the "hypothetical" hypothesis of customer demand.

The implicit assumption of Tradition Hotel is that customers' needs for Check Inn Hotel are the same, and they are willing to enjoy the full range of services such as entertainment, catering and accommodation.

But the assumption of the new Econo Hotel is that there is a difference between the needs of different guests. The business travelers stay in the hotel for a short time, mainly sleep, and are only concerned about the core elements such as beds and bathing, and also pay more attention to the cost.

Two different assumptions create two different business models.

If you do not know how to innovate, find out all the "assumptions" of the traditional business model and see what are the "assumptions" which are wrong, what are the opportunities to restructure and what are changing.

This is definitely a feasible way.

To subvert the "assumption" in the traditional mode means that one of your feet has entered the door of innovation.

Play the valuable role of "objection"

The role of different opinions is crucial in decision-making process.

Especially in domestic enterprises, the mode of "one word and speech" often appears, and the value of objection management is even more important at this time.

Drucker has a lot of brilliant discussions on objection management in decision making: good decisions should be based on conflicting opinions, and effective decision-makers even intend to "create" conflicting opinions.

He also discussed the three functions of "objection" in decision making: only negative opinions can protect policymakers from becoming prisoners of the organization; the opposite opinion itself is the "alternative plan" required by decision making; negative opinions can stimulate imagination, such as turning off the "tap" to flow out of water, and stimulating the "negative opinion" of the debate is the faucet of the water pipe.

The Western encourages independent cultural tradition to make "objection" easier to arise, and the atmosphere of openness and democracy makes it easier for "objection" to be fully expressed. The sound mechanism of deliberation also ensures the importance of "objection".

Even so, Intel's founder grove said in his first lesson for managers, some managers often wait until the top expresses their opinions or positions before they begin to express their opinions and support their superiors' arguments.

It is even more difficult for the us to play an "objection" role in Chinese enterprises.

Chinese enterprises are not mature enough, not only the lack of professionalism of employees, but also the leaders often have conflicting, worried or even afraid of "objection management", or are overwhelmed and useless. With China's emphasis on face and harmonious cultural background, "objection" often dies before it is put forward.

To play the role of "objection" in decision-making, we first require leaders to have a broad mind and be able to break through their faces and be practical and realistic.

It's easy to say, but it's not easy to do.

I am a law student, so I am still realistic and relatively democratic. However, I often feel embarrassed, unable to stand and even angry.

Although the mood of tolerance and adjustment has passed, I also realize how hard it is to accept objections and encourage dissent.

In addition to breaking through the face, leaders should consciously set up "opponents" and "negative voices".

For example, try not to propose a case by yourself, but it is more likely that the argument will be raised by the subordinates. The person who dares to argue with the boss directly is rare in China.

Do not hesitate to ask a few times, "do you have any different opinions?"

"Are you sure you agree?"

And so on.

But the most difficult thing is that managers must let the surrounding environment (subordinates and subordinates) accept or agree with the value of "objection". Otherwise, they will either shut up or join in the leadership's view. Once there is controversy or misunderstanding, there will be a conflict between the upper echelon.

Because of the lack of argument tradition in enterprises, "objection" is unfamiliar and frightening to many managers.

Therefore, how to promote organizational members' acceptance and recognition of "objection" step by step and through full communication, and gradually establish the mechanism of objection management in decision-making, is a realistic test for leaders of Chinese enterprises.

Of course, objection is a process, a method, not an end.

If no consensus can be reached, managers must be decisive and control, and need "democratic centralism".

After the decision is made, although you may not fully agree with this decision, all relevant personnel must fully support the implementation of this decision.

This requires the relevant personnel to have quite strong professionalism.

From my personal experience, I have always tried to promote "objection" in decision-making, although at some point it seems to have affected efficiency and even brought about quite a heated argument, I myself and my team sometimes are not used to it, but in general, it has more positive effects.

In recent years, I supported the motion (I initiated, commissioned by others, members of the team launched), 20% of the bill was finally completely negated, and 80% of the bill even passed, under objection management has also been a lot of amendments, refinement or refinement, or Yan Houshi prepared to prepare the prerequisites, or prepared alternatives, and so on.

In my new business service portal, AI buying network, we have more discussions and debates between our teams.

At the same time, we extended the scope of objection in decision-making to potential investors. They were knowledgeable and not their own people, so they had no scruples.

So we regard every conversation with investors as a validation of our business model, and regard every argument as an opportunity to improve and revise our corporate strategy, and take every question they put forward as a possible inspiration.

Therefore, although this new business has only been operating for half a year, our business strategy and business model are becoming more mature, mature, clear and coherent. It has already taken shape in the field of enterprise service portal, and has passed the market influence that is usually achieved by innovation enterprises in one or two years.

Among them, "objection management" has played the most important role.

I think business can be defeated and life has its ups and downs. "Objection" is a methodology that can be adhered to for a long time, or a good habit that helps us get closer to success.