Omar Usman – Decisive Deep Dive Introduction and Banana Bread
AI: Summary ©
AI: Transcript ©
In this video series, I'm going to be
explaining the main points made in the book
Decisive by Chip and Dan Heath. Now, normally,
I share 3 lessons that I learn from
books that I'm reading. In this series, I'll
be doing something a little bit differently. This
will be more of a deep dive. And
so this video series,
I'll be covering the major points made throughout
the book, and accompanying it is a long
write up, which I've linked to in the
description down below.
And that write up has a number of
resources. So it has
PDFs made available by the authors, it's got
videos, podcasts interviews by the authors, things of
that nature, but I've also written out a
summary of the main points and also given
additional resources beyond that so you can go
to learn about these concepts more in detail.
Detail. So it helps to go through that
written guide along with these videos.
Now, Decisive is a book about basically how
to make better decisions. That doesn't sound like
a whole lot, but decision making,
if not, it's perhaps the most important skill
that any leader can have, but it's also
a very underrated
skill. See, decisions shape the trajectory of an
organization.
So if you make the right decision, obviously,
you go down the right path. If you
make a wrong decision, it might take a
long time to recover.
Now the mistakes that most people fall into
is they're either unable to make a decision,
and so they wanna build consensus, they wanna
take a long time, they wanna think about
it, in which case sometimes you lose the
opportunity cost of that decision,
or
they'll give into their emotions and short term
biases. Think about buying a house and how
emotion takes over. Now in this video,
I'm gonna be sharing a story
that the authors of the book sent out
on their email newsletters. It's actually a story
that was left on the cutting room floor.
It didn't make it into the book, but
for me, this story really encapsulates
a lot of the major ideas that are
made that are presented in the book, and
the story goes like this. Let's pretend that
there's a couple called Jim and Pam, and
Jim works in the office, and Pam, she
sends pastries along with Jim to work, you
know, a couple of times a week, and
Pam makes all types of things. She makes
pumpkin bread, banana bread, scones, you know, muffins,
all different types of pastries.
The problem
is, those pastries are low fat and they
taste really bad.
But when Jim comes to work, he puts
the pastries out, and if you've ever been
in an office environment, you know exactly how
it works. There's free food in the bake
in the break room, the email notification goes
out, and everyone gets up. It's an excuse
to get up. It's an excuse to take
a break to see people and obviously to
get some free food. And so the food
disappears within a matter of minutes. Pretty soon,
everyone knows that Jim's wife Pam sends pastries
with him. And so now when they meet
her at a social event for the company
or at a dinner,
in order to be polite, in order to
establish rapport with her, they say, hey Pam,
We love those pastries. Keep them coming. They
taste great. Everyone finishes them very quickly.
And so now after this happens a few
times, Jim and Pam go home and they're
thinking, hey, are we on to something? Are
we sitting on a gold mine? You know,
and Pam's saying, you know, I'm one of
those Masterchef Junior kids and it's always been
my dream to own a pastry shop and,
you know, maybe we're really onto something. Maybe
we should start a business. Maybe we should
quit our jobs and go all in. And
so Jim starts telling people about this idea
that, hey, we might start a pastry business.
And now people are kinda like, oh, okay.
That's nice. Good luck. We wish you the
best.
But no one's gonna stop and say, hey,
Jim. You can't do that.
Those pastries, they taste like cardboard. They're stale.
They taste terrible.
No one's gonna say that. And so now,
Jim and Pam, based on this information that,
hey. Everyone thinks it's a good idea. Everything
everyone thinks that we should do it. Well,
now they start going down that path. Now
immediately, a number of things that are really
obvious jump out at us. Right? We're all
screaming at at them saying no, don't do
this. Now let's look at a couple of
these mistakes in detail. Some are less obvious
than the others.
The first is that they're taking
the particulars
and the vividness of the immediate feedback and
making a broad application of it. So they're
seeing this feedback that, hey,
everyone likes their pastries and they always finish
out, and so they take that to mean
that my pastries must be amazing.
But if they were to zoom out and
look at the bigger picture,
they would see, well, actually,
there's a pattern here. Anytime that there's free
food in the office, it finishes out. It
doesn't matter if it tastes bad, it doesn't
matter if it's stale, it doesn't matter if
it tastes disgusting.
Anytime there's free food in the break room,
it finishes. So they don't see themselves as
part of that pattern,
they see this feedback as validating, well, my
pastries are amazing.
The other thing that they failed to do
was to actually validate and get feedback. And
so it's one thing for people to say
hey, those taste great. It may have been
another thing to come and say okay, we're
selling these for $2 each. And now they
can do a little bit of market research
and just validate.
Are people actually buying it? Is the market
reacting the way that we thought that it
would? If it is, then maybe we can
take a step further, but if not, we
need to go back to the drawing board.
Another thing that they failed to do was
to understand their role, you know, understand what
their true
question or their true issue.
They're framing this as a should we open
a pastry shop or not, and if my
pastries are good, then I should do a
good job, but what they failed to do
was to understand okay, how many people have
made the jump
from,
maybe a passion project into a full time
business, and what steps did it take to
get there? If we do open a small
business, what are the things that we're not
taking into account? How many restaurants for example
open up in a good location but fail?
Do we know how to scout a commercial
location? Do we know the legalities involved with
it? Do we know how much the rent
should be? And once we even do all
that, have we really understood the food business?
Do we know how much inventory is going
to cost? Do we know how much equipment
is going to cost? Do we know how
much payroll and overhead is going to be
and how to calculate all that? Do we
know what our food margins need to be
in order to turn a profit? Do we
know how long we're supposed to wait before
we turn a profit? There's a whole number
of issues that they might not be taking
into account because hey, my pastries are good,
this is what I've dreamt about,
and that's just what I wanna do.
One thing that they could do, and I'm
not saying that
one thing that might happen is we'll say
well okay we look at all this feedback
and say okay well maybe we should stop,
maybe we should pull back, and it's always
kind of one extreme or the other that
either we look at all these issues and
say okay well forget it, that's too much
to figure out, or we wanna go all
in. And one of the things that happens
is that it's kind of the narrative and
the stories that we share particularly in modern
times, and so we always popularize that story
of the person that had that dream since
they were a child of opening a pastry
shop, and they put all their savings into
it, they maxed out their credit cards, they
took out their loans, and they made it.
They followed their dreams, they followed their passion,
they did all that, and we hear those
stories and we think, well, we can do
it too. But we don't seek out
disconfirming
information and that's a huge problem, especially the
time of the internet where we only highlight
success stories. Have we sought out the stories
of the people that went down that same
path but then ended up bankrupt, that failed
that didn't make it,
those aren't fun stories to share, but they
have very relevant lessons
that would be very pertinent in making this
decision.
Well now, okay, so are we supposed to
go all in? Do we go all out?
How do we figure that out?
And that's where you have to have another
element which is to say okay, let's set
a trip wire, and that we will cover
that in a later video in more detail,
but basically let's set an experiment for ourselves.
How much money can we reasonably invest? So
they could have asked themselves, okay, what can
we put in that's not gonna negatively impact
us too much? So they might say, okay,
we can put in $25100
and it's not gonna negatively impact our lives
if we lose all of it.
Now let's based on our projections figure out
how long it might take to break even
or turn a profit. And they say, okay.
Based on what we've done so far, we
think that if we put in $25100
into let's say buying, upgrading our equipment, getting
some additional food supplies, doing some marketing, doing
all these different things, then we should be
able to turn a profit within 6 to
8 months. And so they say okay, let's
give ourselves leeway.
Let's set a reminder on our calendar to
come back after 8 months and see. If
after 8 months we have made back $25100.1,
for us that'll be a successful validation
that we need to put a little bit
more fuel into this, turn up the volume
a little bit, and see how much more
we can accelerate it. But if after 8
months we come back and we've only made
back $2,499.99,
then that will be an indicator to us
that we need to pull the plug on
this project
and not put any more money into it
because we're probably going to lose it based
on what we validated thus far. Now, in
the upcoming videos, I'm going to explain the
RAP framework, and the RAP framework
is a system.
It's a way of trying to mitigate
and minimize the impact of cognitive bias, of
emotional bias, of short term emotion, of all
these different things, and that framework is W
R A P, widen your options,
reality test your assumptions,
attain distance before deciding,
and prepare to be wrong. And So we'll
be going through each one of those in
the next 4 videos. Again, make sure you
check out the deep dive post that's accompanying
these videos, and I'll see you in the
next one. Thanks.