3 Tips for Decision Making with David Siegel

INTRODUCTION: Welcome to The Daily Bolster. Each day we welcome transformational executives to share their real- world experiences and practical advice about scaling yourself, your team, and your business.

Matt Blumberg: Welcome to The Daily Bolster. I'm Matt Blumberg, co- founder and CEO of Bolster, and I am here today with my friend David Siegel. David is the CEO of Meetup, formerly the CEO of Investopedia. He is a professor of management at Columbia. He's the author of one of my favorite CEO books which is called Decide& Conquer, and he hosts a podcast also called Keep Connected. David, welcome to The Daily Bolster.

David Siegel: I'm so glad to be here, and you are mutually one of my favorite CEOs. This is a CEO of the best.

Matt Blumberg: All right, I have one question for you today. I want to talk about decision making, something that CEOs have to do 50 times a day. You've done it a million times in your career as a CEO. What are your top three pieces of advice for CEOs about decision making?

David Siegel: Sure and decision making isn't only important as a CEO and personally-

Matt Blumberg: Anybody.

David Siegel: ...Personally as well. Yes, I might make 50 professional decisions. I might make hundreds of life decisions every day from the minuscule to the significant. So number one is speed of decision making. Not making a decision is a decision. And people don't oftentimes understand that one of the biggest mistakes that one can make is to take too long in making a decision. In fact, one of the great quotes that I love from a former president from a 100 plus years ago, Theodore Roosevelt, was the best decisions are great decisions. The next best decisions are bad decisions. And the worst decision is, Matt?

Matt Blumberg: Not making a decision

David Siegel: Exactly. No decision is the worst decision. So speed is number one.

Matt Blumberg: I love it. What's number two?

David Siegel: Number two is avoid decision surprises. If you surprise someone with a decision, it's important to introspect and say, " What did I do wrong in not communicating effectively prior to that decision that this person was surprised?" If I'm firing someone and they're completely surprised, I made a mistake.

Matt Blumberg: Oh, I always say that. I always say no one should ever be surprised to be fired.

David Siegel: Exactly. My board should not be surprised. My colleagues should not be surprised. So if your process in making decision is to say number two is to avoid decision surprises, good things will happen. For example, prior to being the CEO of Meetup, I was the CEO of Investopedia. I was basically called in one day and said, " Surprise. We decided to sell the company." That was quite the surprise, yes, for a CEO to find out. After that I swore no more decision surprises.

Matt Blumberg: No more surprises. Okay, so speedy, avoid surprises. What's number three?

David Siegel: Number three is understand your biases. We're all decision making biased. And based on my experiences, there are four major biases that CEOs have, and we're going to go through the four very quickly right now. Number one is recency bias. So for example, I just had a head of marketing, my CMO, and he is way too brand focused. So now what I'm going to do, because of that last experience, I'm going to hire someone's focused on performance marketing with no brand orientation whatsoever. I'm going to go through the opposite extreme of the person that I had. As opposed to looking at the last five to seven type candidates, I only look at the most recent experience, which is so dangerous.

Matt Blumberg: I always call that the human whiteboard problem. Well, that's the last thing that was written.

David Siegel: Exactly well said. And sometimes, yeah, that eraser doesn't erase very well on a whiteboard as we know. So recency bias. Number two, challenge is confirmation bias, which is a lot of CEOs tend to, even though they won't fess up to it, surround themselves by people who agree with them because it's a lot easier. You don't have tension, you don't have disagreement. Well, you know what? Tension and disagreement results in much better decisions. So confirmation bias is a major challenge. The other challenge around it that CEOs have is they want to be optimistic. People become CEOs oftentimes because they're more optimistic people, so they want to confirm the things that they already feel good about. So confirmation bias is number two.

Matt Blumberg: All right, you got two more in there.

David Siegel: The last two, here we go, is status quo bias is the inclination to basically be in a tough situation and say, at least it's the devil I know versus the devil I don't know. I don't want to raise this money. I don't want to fire this executive. I don't want to make these changes because it's just going to be too challenging. So the inclination for many CEOs and leaders is to stick within the status quo is number three. And last one, number four is some cost bias. " Oh my God, we put so much resources into this new project. We put so much time and energy into expansion, into this new location. I can't just cancel it. The board's going to think I'm a failure. I'm going to think I'm a failure. I'm going to lose the confidence of my team." Sunk cost bias. No. The answer is it's a sunk cost. You already did it, what the right decision to move on from here. So the four big biases, recency bias, confirmation bias, status quo bias, sunk cost bias, avoid them. Good things will happen.

Matt Blumberg: David, I think I'm literally going to write these on Post- its and put them next to my monitor. This was awesome advice. Thank you so much for joining us on The Daily Bolster.

David Siegel: Love it.