Making Decisions Right

Our sources of sustenance shape our frames of mind and behaviors to a greater extent than we may like to admit.

Last weekend I spent some time getting to know a businessman with whom I serve on a nonprofit board. He told me a bit about his life, and attributed his business successes to lessons that he had learned from his father. He summarized those lessons with a wonderful aphorism:

“Success doesn’t come from making the right decisions; it comes from making the decisions right.”

An entrepreneur is forced to think that way: business is a survival-of-the-fittest contest, so if a principal doesn’t make decisions iteratively, learning from mistakes and adjusting to meet others’ expectations, the business won’t last long. “Making the decisions right” is evidence of a personal sense of responsibility – ownership – of the outcomes.

Salaried employees generally inhabit a different context. The bigger the organization, the more remote are most employees’ understandings of their jobs from the organization’s mission. Most people who work for large organizations utilize narrower skill sets than entrepreneurs; they spend their time doing what’s expected of them and worrying about interoffice politics/making their bosses look good; those are the behaviors for which they will be rewarded. The entrepreneur worries about the health of the organization as a whole because everything she has depends on its success; the employee focuses more on how he can maximize what he gets from the organization.

For the first thirteen years of my career, I worked for huge, international banks. I loved being a banker, and gradually became proficient at working with a particular kind of customer. I didn’t have to worry about, and couldn’t change, most bank policies and procedures. All I had to do was a few highly specialized tasks; I had tens of thousands of fellow-employees who had their own narrowly-defined roles.

I left the world of globe-spanning banks to start a business with a partner. The two of us found ourselves faced with every kind of decision imaginable. How would we determine our strategy? How would we fund our company, and split profits or losses? How would we price, pitch and deliver our services? Where would our office be? Who would our lawyers and accountants be? How would each of us, or both of us, make decisions about hiring or spending money on … whatever? What about healthcare? Who was buying the coffee? The list of decisions that needed to be made was endless.

I learned to think like a principal, rather than like a salaried employee. Like my nonprofit acquaintance’s dad, we had to constantly adjust our decisions about everything in response to new information or customers’ interests. It was a terrifying and exhilarating experience – and it was far and away the best, and most empowering, education I ever had. My beloved spouse, remembering those days, says that even when it looked like we were sure to lose our shirts, I went to work every day with a smile on my face.

Eventually, we learned how to make a profit; knowing how to do that made me a freer and happier man than I had ever been. No longer was I dependent office politics or the whims of my boss – I now depended on my own ability, and that of my co-founder, to meet the needs of many.

***

I sometimes wonder how, in the late 20th and early 21st centuries, America seems to have lost its deep love of personal freedom. What caused the attitudinal shifts that ushered in the era of big government?

Before the industrial age, almost all citizens were accustomed to personal freedom and responsibility; they thought like principals because almost everybody was a principal. Most people made their livings as subsistence farmers or as tradesmen or their helpers: few were more than one step removed from the sources of their sustenance, so they knew what was truly needed for the creation of that sustenance, and what wasn’t. Each and every person had to figure things out every day, and save in anticipation of business reversals and their own inevitable incapacities. They were responsible for their own futures in much the same way that a responsible entrepreneur is for her business. They would no more have allowed the government to forbid them to sell their labor at whatever price they chose, or to tell them what healthcare they must, or were forbidden to, purchase, than submit to the rule of a far-off king.

The twentieth century’s dramatic shift toward the mass production of industrial goods and government-managed entitlement programs changed the contexts of Americans’ lives; twin victories in the world wars, emerging from those wars with the planet’s only undamaged industrial infrastructure and landing a man on the moon convinced Americans that big government could deliver. Many people became employees of enormous corporations, or of the government, or outright dependents of the government via entitlements programs. Government came to be seen as the provider of last, and sometimes first, resort. It was the age of big.

What we are now seeing is that governments – and many other organizations that are simply too large to manage efficiently – cannot deliver on their promises to sustain us. Spiraling national debt and unsustainable entitlements make our government’s failings manifest. Penn Central, General Motors and US Steel went bust; our government would, too, if it were unable to print money (thereby debasing ours). Does anyone believe that the US Postal Service would survive if it were not an arm of the government?

Mega organizations like the government do not make the best use of human talent; they lull us to sleep with false promises of security while instilling a counter-productive, do-as-you’re-told mentality, particularly among dependents and all but the most senior employees. They are fundamentally about power, not productivity.

Disillusioned by government’s failings and individually empowered by advances in technology, I am convinced that the coming years will bring a rediscovery of the joys of individual freedom and its power to bring out the best in people. Let’s hope so: we all will benefit from more people having the mentality of “making the decisions right”.

 

M.H. Johnston

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