Decision making for product managers
By: Adrian H. Raudaschl
Tags: Skills, Decision Making, User Experience, Product Management, Management

Product managers (PMs) don’t build products. However, what we do contribute is something equally tangible: decisions. For any given day we can make hundreds of choices. But, being wrong about an important decision can feel like a very public and career-damaging affair, so it’s worth investing the time to develop this skill.

For a PM, typical decisions can include:

Establishing why a team exists

Picking a strategy for accomplishing a vision

Deciding where we want to make the most impact

Prioritising what is most important to build first

A series of great decisions have the power to produce compounding returns on team productivity, build confidence in a vision and help your team achieve the most impact. It’s like magic, but, like any magic trick, it takes practice.

In this article, we will cover the following:

How to judge different types of decision and decide what is important

How to be confident with incomplete information

How to use probabilistic thinking in decision making

How groups increase your chances of making successful decisions

The following techniques are a mixture of lessons I have learned from great thought leaders in this area like Jim Collins (Flywheel), Brandon Chu (Black box of PM), Steven Johnson (Farsighted) and Annie Duke (Thinking in Bets). They are as useful in life as they are in the office.

What makes a good decision maker?

We judge decision-makers on the outcomes of the choices they make. But let’s not confuse the decision process with the outcome. You can have a bad process and still arrive at a good result, but all that does is reinforce confidence in a bad process. If you are going to be wrong about something, it’s better to be wrong as the result of a good process rather than a bad one.

We make bad decisions mostly as the consequence of cognitive bias. We need to understand that every decision is going to have a rational and emotional component; the trick is knowing when rationality will serve, or harm us.

It’s almost like an equation. Strike a balance between risk, reward, impact, perspectives of others, unknowable entities and the number of options available. A good decision-maker knows what these variables look like and which are essential.

Confidence in Decision Making

Sometimes you will find yourself in a situation where you need to make important choices but feel unqualified or incapable of doing so. It can feel paralysing.

When it happens, I like to remind myself of two things:

First, everything was made up by the decisions of people no smarter than you or I Second, almost every kind of decision imaginable has already been solved by somebody, in some form

Making the right choice is not a binary process; anything is rarely just true or false. Accept the reality of probabilities. You are not looking for a perfect solution, but instead using logic to assign your decision a likelihood of being true.

Understanding your decision

Correlate the time spent making a decision with how important and reversible an outcome is. Is something important and irreversible? Then spend more time thinking things through.

When weighing the importance of your decision, consider the following:

What does success look like?

What judgement calls may I need to make?

What variables are important?

What are the unknowns?

How significant are the risks and consequences?

Identify the forces that would support or impede change toward your objective

How easy is it to reverse the decision once made?

A technique called Backcasting can be helpful here. Try this: Envision a future where everything has worked out, and your goals have been achieved. Then ask yourself, “How did we get here?”. This lets you think through the steps taken that lead to success, and any additional decisions/events required along the way.

I also use a system of notes I call my “Second Brain”, to help quickly store and retrieve information relevant to the decision process.

Probabilistic Thinking

One of the most useful tools I have found for comparing decisions is a Decision Matrix. I love this tool. It forces you to process a set of well-defined alternatives from many different angles. Begin by determining the columns of your decision matrix. Think about which aspects of the items you are choosing between are which are most important.

For example, a product feature will mean balancing engineering effort against how validated your hypothesis is and customer feedback. Score each idea on the same columns and then generate a final score. Using a system of High, Medium and Low can be a helpful way of thinking it through. Now compile the total score for each option.

So what happens if you start to realise you don’t have all the information you need to quantify everything? That’s simple. Ask yourself, what level of unknowns are you comfortable with, and how risky is it, i.e. low, medium, high. The riskier the decision, the more time you should spend filling in any gaps. But don’t go overboard with the research. Getting about 80% of the information is exponentially easier than getting 100%, and may not be that much more helpful.

The goal here is to use quantification to reveal new insights and question any gaps in your logic.

Decision Matrix. Illustration by author

Mulling ideas while mulling around

Mathematical decision making has its limits. There can be office politics to contend with, interpersonal relationships to consider and a multitude of little factors which may not have occurred to you. Take some time now. Allow yourself to mull over your options. Go for a long walk or just get creative enough to let your mind wander and think away in the background.

Sometimes, I like too set my mind a little challenge before doing something distracting. My favourite is called Mental Contrasting. Unlike Backcasting, where you think through the decisions that got you to your desired outcome, Mental Contrasting makes you think through what obstacles could keep you from reaching your goal.

For example, if you wanted to build the world's best search engine, don’t picture your shiny result. Instead, think about all the planning and approval meetings, assumptions that will be crushed, stakeholder reporting and all the less glamorous work you need to excel at — that’s more likely to help you see the bigger picture.

Always make a plan for failure

Planning for success also means creating a plan for failure. When the number of unknowns is high and the risk of being wrong even higher, it’s often more efficient to prepare for an adverse outcome. After all, not all variables can be known. Wherever possible, aim to create scenarios where randomness and uncertainty are your friends, not your enemies.

Failing properly has two major components:

First, never take a risk that will ‘do you in’ completely (never get fully taken out of the game) Second, develop the personal resilience to learn from your failures and start again

With these two rules, if you do fail, you can only fail temporarily. Become anti-fragile. Those who are not afraid to fail have a massive advantage over everyone else and what they learn makes them less vulnerable to volatility.

Use the wisdom of the crowd

Decisions are not only a question of ‘what’ to do, but also a question of ‘who’ should be involved.

Let’s talk about the romanticised idea of the solo decision-maker. The story plays like this: Only when you can lock yourself away in an ivory tower with all your research, free of the distraction, free of the influence of people will be able to think freely and emerge with the right answers. This is flawed. Good decisions are not made in isolation, and can only be genuinely impactful through the engagement and collaboration in the public space.

Centuries ago, the Catholic church put this into practice by hiring individuals to argue against sainthood during the canonisation process. It’s where we get the phrase “devil’s advocate.” Why did they do this? Because none of us can see all the different facets of our choices. We all have blind spots and biases. That’s where enlisting a group can help, as other people will have an easier time picking out mistakes and prejudices.

Try to gather together a diverse group of people you know will be supportive, indifferent or unsupportive, as well as individuals who may be impacted by the decision. You are not trying to seek approval. Encourage them to play devil’s advocate with your ideas and find the holes in your logic.