How to make decisions that won’t cost your business…my process.

Summary

• I've dedicated the last 18 months to studying decision-making, recognizing that high-level business success is about how you think rather than what you do.
• Having made costly mistakes in the past, losing upwards of $10 million, I've learned to approach decisions with a methodology to avoid similar errors and align with my goals.
• The 10-10-10 rule helps me process decisions by considering the immediate emotional response, the short-term costs and gains, and the long-term vision alignment.
• Initially, decisions stir emotions like excitement or dread. I acknowledge these, but don't let them dictate my actions.
• Within 20 minutes, I move to evaluating the decision's costs versus gains, typically looking six months to a year ahead, focusing on resources and potential ROI.
• Finally, I assess how the decision aligns with my long-term vision and goals. Even if it's feasible short-term, it may not be the right move for where I want to end up.
• I also consider how choices affect my reputation with myself and those whose opinions I value, rather than strangers on the internet.
• As an example, I had to decide whether to intervene in a team issue or let the concerned leaders handle it. While my instinct was to fix it immediately, aligning with my vision of managing a larger portfolio meant stepping back.
• It's often our natural tendency to act quickly to alleviate immediate discomfort, but this doesn't always serve long-term objectives.
• My advice for others is to take time to think when faced with decisions. Responding with "I need to think about it" can provide the necessary space to move from an emotional reaction to strategic thinking.
• This approach has been tremendously helpful in aligning my decisions with my long-term goals and avoiding knee-jerk reactions to immediate problems.

Video

How To Take Action

I would suggest implementing the 10-10-10 rule in decision-making to get the most value with little cost in terms of time and effort. Start by taking a moment to identify your first reaction to a new decision. It's okay to feel excited or worried, but remember not to act on these feelings right away.

After your initial reaction, spend the next 20 minutes thinking about the costs and gains of the decision in the short term. Consider what resources you'll need, who might be affected, and what you'll have to do or give up. Look at the expected return on your investment in the next 6 months to a year.

Finally, think about how the decision fits with your long-term vision and goals. Even if something seems good now, it might not be right for your future plans. Make sure the choice helps you move towards where you want to be, and think about your reputation with yourself and those close to you.

If you're presented with a challenge, resist the urge to solve it immediately. Instead, tell the person, "I need to think about it." This will give you needed space to process and ensure you're not responding just to make the discomfort go away.

This approach helped me when I had to decide whether to step into a team issue or let the leaders handle it. Though I wanted to fix it fast, thinking it through made me realize I needed to let them work it out so I could focus on managing a larger portfolio, which was part of my long-term vision.

Remember, slowing down and thinking through decisions can save you from making costly mistakes and keep you on track for success. It's a small change, but it can make a big difference in reaching your long-term goals while managing immediate issues more strategically.

Quotes by Leila Hormozi

"It's less about what you can do and it's more about how you think"

– Leila Hormozi

"I think that a lot of times what we want to do is the thing that's going to feel good to alleviate whatever feeling that we have"

– Leila Hormozi

"I've made probably two or three handfuls of decisions that have cost upwards of 10 million dollars"

– Leila Hormozi

"Just say I need to think about it or I need to sleep on it"

– Leila Hormozi

"Always make sure they're aligned with the long term"

– Leila Hormozi

Full Transcript

today what i want to share with you is the framework or thought process that i go through when i'm trying to make decisions and the reason that this is something that's so top of mind for me is in the last probably 18 months this has been primarily what i've studied so like the books i've been reading the articles i've been reading the people i've been talking to just trying to dissect how people make decisions and the reason for that is because i think that the higher and higher you get in business the more that you realize it's less about what you can do and it's more about how you think and so for me this has been probably my my number one focus is just how to think and how to make decisions that are sound because i think that probably over the last five years i've made i don't know i could say probably two or three like handfuls of decisions that have cost upwards of 10 million dollars and so i would like to share what i have found uh to help me or prevent me from making those in the future and what has helped me make a lot more decisions that i feel are very aligned with where i want to go i think that it was gene whitman that i found this uh the first part of this from um it's called the 10 by 10 rule or the 10 10 10 rule okay and so what this is is it's basically talking about when you're making a decision or when you've made a decision or when a decision comes to you right it's an opportunity to make a decision um there's how you process the information at least this is my interpretation of this okay the first 10 minutes you find primarily are focused on the feeling right and i think that we can all get this because like immediately when you hear something or you have a decision to make there's a feeling that you get there could be excitement it can be dread it could be uh frustration it could be anger you know what i mean like it's it's always something that's almost instinctual that comes up with us right that's the first 10 minutes of when you're you've just heard something that you need to make a decision about the second 10 minutes you start saying okay you almost go into action mode right i need to figure out what i'm going to do about this and so this goes into what i would say is basically cost versus gain and it's typically if you if you really sit and think about what you're doing you're thinking about usually in the next six months to one year at least that's what i've noticed for myself it's like all right what is the resources that's gonna take like who on the team would have to do this what are they gonna have to not do like what would i do what am i going to have to not do what am i going to have to do how much money is it going to cost what's the roi what am i going to see the roi right that's what i'm thinking and then there's the third window right and this is what we want to get to and this is long term vision alignment right this is the third 10 minutes so you're saying 20 to 30 minutes after you've heard this right and you're thinking about making a decision and this one is basically saying okay crap i felt one way i thought about what it could be in a year and say it's doable saying like all right i can make this decision and i'm going to go to the left but then you look and you're like ah going to the left works but going to the left doesn't actually align what i want to do because going to the right is what i want to do so the decision works but it's actually not going to be good with my long-term goals and so that's why this one is so important to get to a third piece that i think about with it that i think is really useful for people is i think about reputation right and so how uh my reputation with myself as well the people around me who i value right i'm not talking about reputation for strangers on the internet you don't know i'm talking about like how do you think of yourself what's your reputation with yourself and then your reputation with those around you care about you and whose opinions you value right that's what i think that when i think of the third ten minutes there and so i'll give you an example of how i've used this in the recents as some of you may know i don't know if alex talked on his channel but essentially right now we're in a spot where we have three companies we've built ourselves and now we've been uh bringing on other companies and taking stake in those right so now we've been building portfolio companies because of that how i make decisions has changed a lot why has it changed a lot because my vision and my values have changed because i know that i'm going somewhere a little bit different than i might have been going two years ago right so two years ago i just had two businesses that i had to make decisions for now i have about eight businesses that i'm assisting with right and so i'll give you the example that uh comes to mind for me and this is when i was really thinking about using this principle is there was an issue with somebody on our team right and it was a like a messy people issue this person was upset because someone said something that offended them right these are typically the issues where at some point i have to get involved because the skill that i believe i bring to the table is that of having uh hard conversations in a way that makes everyone feel good at the end right and i know that everyone knows that i care about them make them feel valued right that's what brings the table so i think immediately i hear this and i'm like oh i definitely need to jump in i'm feeling a sense of urgency i'm like i've got to go in i've got to go fix this right now like i can fix this in five minutes and i don't have to feel anxious about it myself i was feeling super anxious about it i can't believe this person thinks that they misinterpreted it like i totally see where the communication went wrong i can fix this in five minutes right but i'm like don't act yet like let yourself process it so then i think in the second one i'm like all right well you know what does this mean i'm like well what this means if i jump in is that they might lose rapport with their direct supervisor because i'm not giving them the chance to actually see if they can fix the situation themselves right so like i can do it and it'll fix the situation but in the short term i feel like they're actually gonna lose respect for the person that they report to so is that beneficial i don't i don't know right i mean like maybe maybe not maybe it's such a big issue i should jump in i'm at this point i kind of tossed up but then i think the third and thing of long-term alignment with the vision if the vision is to have 30 or 40 portfolio companies then what does layla who has 30 or 40 portfolio companies do with her time does she meet with everybody doing this or does she allow the leaders right that are there to learn by themselves that she's not involved in that anymore the interesting thing about this is it felt really bad and so like my immediate feeling was to jump in and do something about it and that is actually contrary to the thing that's going to get me to where i want to go so instead what i had to do was deal with the anxiety right and i think that a lot of the times what we want to do is the thing that's going to feel good to alleviate whatever feeling that we have and that's why we make so many of these decisions in the short term right it's because it feels good it alleviates the thing but in the reality it's like it's not going to help them they're going to lose rapport with their direct supervisor and then in the long term i'm just creating myself as something that's needed into these businesses rather than someone who's advising and helping and looking over the other leaders in there right this has been extremely helpful for me in terms of thinking how i'm going to make decisions and always make sure they're aligned with the long term and so another way that you can do this that helps a lot of people and i am one of them is anytime a decision is brought to me my automatic response is i'm gonna need to think about it and that's because i think a lot of people process in their own time right they don't actually process through verbally talking to somebody else i'm not one of those people i can to an extent but i need to go be by myself and think it through and so anytime someone brings something to you something happens even if it feels terrible and urgent just say i need to think through it or i need to sleep on it because i bet you what happens during that time is you go from here to here and so i hope you find that useful that has been tremendously helpful for me it's just a small perspective shift but it really can help you align with your long-term goals versus what you're doing in the immediate moment so if you liked the video go ahead and hit subscribe i will see you on the next one