3 Tricks the Cofounder of Netflix Uses to Make Hard Decisions Easier
Marc Randolph knows entrepreneurs often face what feel like impossible or unknowable choices. Here are three methods he uses to cut through the noise, and find the best path forward.
Everyone makes decisions. But entrepreneurs have an especially challenging time of it because so often we must make decisions based on incomplete, inconclusive, and often contradictory data.
In my four-decade career as an entrepreneur, I have learned a few things about how to make those decisions, including the most important thing of all: Just make a decision. It may sound trite, but it's also just plain true. When so much feels like it's on the line, it's easy to become paralyzed, unable to choose which direction to take. But even a wrong decision is better than no decision because at the very least, by implementing a wrong decision you'll learn a little more about the problem you're trying to solve, making it easier to know which way to go next time.
Related: How to Make Better Decisions
That's why, whenever I'm forced to make difficult decisions, I rely upon a few tricks that usually make the process easier.
Here are three of my favorites.
1. Knock the flagpole down.
In 1970, in the wake of the Kent State shootings, a group of students marched into their local McDonald's demanding that the store's flag be lowered to half-staff. The store complied. Shortly afterward, the company's then-chairman, Ray Kroc, was offended and demanded that the manager once again raise the flag. He did. Upon seeing that, the students threatened to burn the restaurant to the ground unless the flag was again lowered. With things spiraling out of control, the store manager called Fred Turner, then the president of McDonald's. Turner thought for a moment and, as the story goes, he said, "Tell you what you do. The next delivery truck that arrives, have him back into the flagpole and knock it down."
Rather than obsessing about which of several bad outcomes is preferable, sometimes it's worth turning your creativity toward how to make your problem disappear altogether.
Most often I've used this approach to solve personnel problems. Once, when Netflix was only a few years old, I learned that one of our key directors was leaving the company. While dealing with her loss was manageable, deciding which of her two equally competent managers should take her place was going to be a no-win decision. Both had different but equally valuable skills. Both were ambitious and made no secret of their desire to move into the director position. But worst of all, both made it clear they wouldn't work for the other one. My solution? I simply reorganized the company in a way that let me promote both.
I'm sure they each thought it was skill and experience that led to their promotions, but what was really happening was me knocking the flagpole down.
And if that doesn't work …
2. Decide if your decision is a one-way door or a two-way door.
According to Amazon founder Jeff Bezos, there are two types of decisions: One-way door decisions require stepping through a door that then slams and locks behind you, and two-way door decisions allow you to step through, look around, and if you don't like what you see, simply step back.
Decisions affecting customer financial data, confidential personal information, and healthcare records are classic one-way doors. With the costs of an error so high, it's appropriate that great diligence goes into a decision to move forward.
But even for the most highly regulated and high-stakes businesses, the great majority of decisions do not have long-term consequences. There is no need to subject your pri-cing, your feature set, your marketing, or your sales process to the same degree of diligence that you apply to your drug-testing regimen.
At Netflix, we stepped through thousands of two-way doors. We learned that success was correlated with how many things we were able to try and that the number of things we could try was correlated with how quickly, cheaply, and easily we could try them. That in turn led to the growing realization that we didn't need to get things right the first time.
As we cut more and more corners and did things faster and faster, our tests got sloppy; we had typos, bad links, and we crashed the site. But we learned that none of it made a difference because getting something out quickly—that we could fix later! — was more important than doing a much smaller number of higher-quality, error-free experiments.
There are certainly aspects of your business that are existential risks, and you must get those right. But the skill isn't preventing yourself from making mistakes; the skill is learning how to recognize the very small percent of decisions that actually need deeper consideration.
Without developing the ability to discern the difference between one-way door and two-way door decisions, your default will be to treat every decision as a one-way-door decision, greatly slowing down the rate of innovation.
And if asking if it's a one-way or two-way door decision doesn't make things easier …
3. Accept that there is no good answer.
We all want to make "good" decisions, but I've found that many problems just don't have perfect solutions. Your current approach might be good for customers and good for margins but bad for employees. You could fix that with a second approach that's good for employees and customers — but now it's bad for margins. A third approach might be good for margins and employees, but now it's bad for customers! And around it goes. One of the most important things you can do is to recognize when you are in a decision-making loop with no exit because it frees you to break the logjam with an imperfect solution.
Finally, if you're trying to decide which of these decision-making techniques to use, keep in mind that you must find the techniques that work for you. You need to experiment. During my career, I've had to make tens of thousands of decisions — so I've had the chance to try out dozens of different approaches and learn for myself which ones work the best for me.
And if you are still stuck? There is always the Magic 8 Ball. That thing never fails.
Entrepreneur Editors' Picks
Formerly Enslaved Black Man Nearest Green Taught Jack Daniel Everything He Knew About Whiskey. Today, the Founder of Uncle Nearest Premium Whiskey Celebrates His Legacy.
Leadership Lessons From the Exclusive Creativity School That 'Packs 5 Years Learning Into 5 Days'
3 Expert-Backed Strategies for Staying Calm in Times of Confrontation
The CEO of Wayfair Has Helped Revolutionize Digital Shopping for 20 Years. Here's How He Handles Rocky Economic Conditions.
This Founder Went to Prison When He Was 15 Years Old. That's Where He Came Up With the Idea for a Company Now Backed By John Legend.
3 Signs You're Letting Pride Get in the Way of Being Successful
Chip and Joanna Gaines and Shonda Rhimes Found Incredible Success By Using This One Entrepreneurial Strategy. Here's How You Can Too.