Tag: decision making

• Responsiveness is underrated

  We have spoken before about the importance of speed and rapid decision making in real estate development. But in practice, it’s obviously a little more complicated than just being good at making quick and high-quality decisions. And that’s because building a building is complicated and it requires teams of people, all working toward the same goal. Some of these people will be internal to your organization, but many will be external, which is a feature that further complicates matters. Because it means that, to varying degrees, there are critical path items — items that control your overall project schedule — that are not fully in your immediate control. This is one of the things makes development and construction so challenging.

  Now, ordinarily, when a team is being assembled people will talk about their project experience, their systems and fancy tech, and perhaps some of the awards they’ve won because of their extreme talent. But what doesn’t often get talked about is the simplest and most basic of things: You want people who will do what they said they would do, when they said they would do it. In other words, you want responsive and reliable people. This sounds pretty banal, which is maybe why it so often goes unspoken, but it’s fundamental to the success of a project. The other nuance to this is that, most of the time, it’s less about the company itself and more about the individual human who will be working on the project. Is that person good?

  Just being responsive, reliable, and on top of things goes a long way. These are the kinds of people you want on your team and it’s how you move fast.

  2024.10.19

• What’s best for the project?

  Development is tough. Among a long list of other things, it requires making a lot, and I mean a lot, of decisions. Oftentimes you won’t have all the information. And sometimes they will be uncomfortable ones to make. But you need to decide on something. It is, arguably, almost always the case that any decision is better than no decision.

  In situations like these, I often like to think back to something that my first boss in development used to drill into me. She would simply ask: What’s best for the project? Now, this is not to say that you should ever do bad things simply for the betterment of a project. That is clearly the wrong thing to do. What I am instead saying is that it can be helpful to keep this guiding light in mind.

  Developers have a fiduciary duty to their investors and partners. But they also have a responsibility to the people who will ultimately occupy the spaces that they’re building and to the communities that they’re building in. And at the highest level, all of these groups should be aligned in wanting the best possible project.

  So if you’re ever struggling with a development decision or you just need a goal reminder, try asking yourself this basic question. It may not work or apply in all scenarios, but I have found it to be helpful in situations where I’m wrestling with something and I need to take emotion out of the equation. What’s best for the project? That’s what it’s all about.

  2024.07.11

• Speed outweighs all else

  Rapid and high-volume decision making are fundamental to real estate development.

  In fact, it’s hard to think of anything being more important when it comes to executing on a project. This is not to say that being thoughtful and doing remarkable work aren’t important. You, of course, need to do those things as well. But it is to say that the benefits of moving as fast as you possibly can usually outweigh all else.

  What this means is that any decision is often far better than no decision. Because no decision can grind everything to a halt. You need to maintain momentum and the way to do that is to make a lot of high-quality decisions.

  As someone who was originally trained as an architect, this is something that I had to learn in the workplace. Because in architecture school, you’re basically taught to work on your projects for as long as humanly possible and then, when you’re done, you work on them some more. They’ll never be good enough and you certainly haven’t spent enough time “working in studio”.

  But in practice, you need to go. I would like to once again reiterate that this is not a license to do crappy work. I think the way to think about this is that speed and excellence reinforce each other. Our team always strives to do exceptional and remarkable work. And one of the ways to actually do that is by focusing on speed.

  2023.04.12

• The occasional good decision

  Perhaps the greatest lesson from Warren Buffet’s most recent letter to Berkshire shareholders is that, to be wildly successful, you only have to be right sometimes:

  In 58 years of Berkshire management, most of my capital-allocation decisions have been no better than so-so. In some cases, also, bad moves by me have been rescued by very large doses of luck.

  Our satisfactory results have been the product of about a dozen truly good decisions – that would be about one every five years – and a sometimes-forgotten advantage that favors long-term investors such as Berkshire.

  The lesson for investors: The weeds wither away in significance as the flowers bloom. Over time, it takes just a few winners to work wonders. And, yes, it helps to start early and live into your 90s as well.

  So-so decisions. Periodic moments of brilliance. And a long-term patient outlook. These are, I think, important things to keep in mind. It’s okay to make mistakes; you just have to keep going.

  2023.02.28

• Multiple paths to a quick yes

  I have heard a number of people describe this blog as covering all that is new. That wasn’t my explicit goal when I started writing it. My goal was simply to focus on cities and all the wonderful things that shape them. But it turns that new ideas form a big part of that and that I am very interested in new ideas. Change is what moves the world forward.

  Of course, there is no shortage of new ideas. We all have brilliant ideas. Maybe you’re looking at Toronto’s public garbage bins right now and thinking to yourself, “You know what, I have some terrific ideas for how these could be greatly improved.” And chances are, your ideas are good ones. The problem, however, is that ideas are fleeting. The real challenge is bringing them to fruition before they die.

  So here are a few thoughts that came to mind this morning:

  • There is a difference between incremental improvements and directional/fundamental change. Generally speaking, we tend to be naturally better at ideas related to the former than the latter. When we look at a Toronto garbage bin on the street and see it overflowing with rubbish and see all its side panels swung open, we intuitively see the problems. But it is less common to think about, oh I don’t know, subterranean garbage networks for moving refuse around or networked robots that come out at night and tidy our streets with purple brooms. This is also why when we come up with something new like a horseless carriage or an iPhone, we often name them after the thing we already know and are familiar with, even though it probably undersells how meaningful the change is. It helps our minds make the leap.
  • Many organizations have separate decision making processes that depend on the above. Amazon, for example, likes to ensure that incremental improvements have “multiple paths to yes” within the company. Again, these are the more intuitive kind of changes and so you don’t want some brilliant, yet fragile, idea to get killed by some naysayer along the way. You want as many of them being implemented as possible. On the other hand, ideas that might change the direction of the company are typically slowed down and carefully deliberated. This is a common split. “Major decisions” go up to some greater governance body; whereas all other day-to-day decisions just get made on the fly by those “in the field”. This is one way to keep things moving quickly.
  • On a related note, venture capitalist Fred Wilson wrote today about the virtues of small and flat partnerships when it comes to early-stage investing (but I don’t think the lesson only applies to this sector). In his view, the biggest venture winners — at least when it comes to early-stage companies — often come from the most “controversial and out there” ideas. And to make these sorts of bets it is helpful to have a small and flat team with a lot of trust. I found this particular insight really interesting because it implies that when you have the opposite — big and hierarchical organizations — you naturally start to lose your ability to experiment with non-consensus ideas. And so what you’re likely left with is just the intuitive and incremental stuff.
  • Recently, we also spoke about the argument that generations view change differently. Young people are often more open to new ideas, at least partially because they view it as a way for them to make their mark on the world. Older generations, on the other hand, often view change as a threat to their current position in the world. None of this is universally true, but think about how this often plays out with new housing. Young people view housing supply as a way for them to buy or rent something new and form their own household. Whereas already established households can view it as a threat to their community and their existing way of life.

  These are a broad set of thoughts. But if there are any lessons to extract from these bullet points it is perhaps these: One, consider the kind of decision that needs to be made. Is it something incremental and intuitive? Is it an obviously sound infill housing project? Because if so, you want multiple paths to a quick yes. And two, consider who gets a say and who controls the decision. Because the wrong group dynamic can kill even the best new ideas.

  2022.06.12

• Emotion vs. rationality

  In life and business I find that we are often faced with decisions that pit emotion against rationality. What I mean by this is that maybe your ego is telling you to do something. And maybe, as a matter of principle, you know with certainty that you’re right. But when you take a step back and think about how that principled decision might play out, you realize that it is probably not the right life or business decision.

  In the case of the real estate development business, you might realize that it is not the right decision for the project. And that’s really the key question to be asking yourself in this business. What is most beneficial for the project? It is not about what’s most beneficial for my ego.

  Of course, taking emotion out of the equation can sometimes be difficult. Maybe you feel like you’re losing if you give in and don’t follow what you think is right. But the truth is that if emotion and rationality don’t line up, then you’re likely going to have to pick a side. And if you make a bad or the wrong business decision, then you’re definitely losing, even if your ego might feel a little better.

  2020.10.03

• What you do is who you are

  I very much enjoyed Ben Horowitz’s last book called, The Hard Thing About Hard Things. In fact, five years later, I still find myself going back to it in my mind, particularly the bits about high quality decision making.

  So I am looking forward to his latest book about how to create and sustain the kind of business culture that you want. It’s called, What You Do Is Who You Are, and that should give you a sense of where this is going.

  Here’s an excerpt from Ben:

  Because your culture is how your company makes decisions when you’re not there. It’s the set of assumptions your employees use to resolve the problems they face every day.

  It’s how they behave when no one is looking. If you don’t methodically set your culture, then two-thirds of it will end up being accidental and the rest will be a mistake.

  Your culture is who you are. Who you are is not the values you list on the wall. It’s not what you say at an all-hands. It’s not your marketing campaign. It’s not even what you believe.

  It’s what you do. What you do is who you are. My new book aims to help you do the things you need to do so you can be who you want to be.

  If you’d like to pre-order a copy, you can do that here. 100% of the proceeds will go to anti-recidivism and to Haiti.

  2019.10.11

• A platform for collaborative reasoning

  Perhaps for obvious reasons, I am interested in how important issues get debated. I have written before about how I think the community engagement process for new developments is largely broken. I think it naturally incents certain kinds of feedback.

  Recently, I’ve been playing around with an online platform called Kialo. They call themselves “an easy to use, yet powerful tool to engage in thoughtful discussion, understand different points of view, and help with collaborative decision-making.”

  The site works by trying to create a structured hierarchy of pros and cons around debatable questions. You participate by making claims (supported by links). Duplicate claims are neatly grouped together. And unthoughtful suggestions are moderated out.

  The UI looks like this (top level question shown):

  

  But you can then drill down into specific claim groupings (note the org chart looking graphic at the top):

  

  I’m not yet convinced that it creates the “collaborative reasoning system” that they are after (maybe because I haven’t used it enough). But I do really appreciate the structure and civility that they are trying to introduce to topics that are often vehemently debated.

  Are any of you regular users of Kialo?

  2019.02.13

• In support of narrative memos

  This is not new. It has been reported on before. But I just finished reading this article about Jeff Bezos’ relentless commitment to “high-quality and high-velocity decision making” at Amazon.

  Here are a couple of high level points:

  – There are decisions that cannot be easily reversed (Type 1) and there are decisions that can be (Type 2). Knowing which is which is important. To help get better at this, they are very diligent about tracking the outcomes of previous decisions.

  – Make decisions without all of the info you wish you had, because if you don’t, you’re probably moving too slow. Speed is paramount. If you’ve categorized your decisions properly (see above), being wrong may not actually be that costly.

  – There’s a company philosophy centered around “disagree and commit.” It is about moving forward – since speed is so important – without full consensus. In other words: We may not all agree, but can we disagree and commit to this?

  Perhaps the most interesting, and seemingly paradoxical, aspect of Amazon’s “high-velocity decision making process” is that it is built upon narrative memos, instead of PowerPoint decks. In fact, decks have been banned at the company since 2004.

  The reason for this is that narrative memos are more difficult to write, which means you really have to understand what you’re talking about. It encourages deeper thought and it allows nuances and interdependencies to come through.

  Apparently important meetings start with everyone just sitting in a room reading the narrative memo, which are often between 4-6 pages. Once everyone has read the memo and is on the same page, the meeting starts.

  As someone who writes a daily narrative, this approach really resonates me. It would be a hell of a lot easier if I could just show up here every day and throw down a few bullet points. But then both of us would get far less out of this practice.

  Writing takes time. Bezos has acknowledged that these memos cannot be written in a day or two. But clearly there’s a belief that more time spent up front translates into greater overall speed. Their market cap suggests that is working.

  2018.10.14

• Any decision over no decision

  The Hard Thing About Hard Things is a book that I read a number of years ago (Amazon just told me that I purchased it on March 12, 2014), but that I frequently come back to in my mind. 

  One of my favorite themes in the book can be summed up with this quote: “Often any decision, even the wrong decision, is better than no decision.”

  Decisions can be scary. What if I make the wrong decision and things go horribly wrong? Then things are on me.

  In some organizations, indecision may feel like the safest decision. Let’s do one more study just to make sure that we’ve got this right. 

  But in a startup (which is what Ben Horowitz’s book is about) and in organizations that would actually like to grow, innovate, and accomplish things, indecision can mean death. Without decisions, organizations lock up.

  None of this is to say that bad decisions are okay. Executives must make high quality decisions as fast as possible, and as a rule of thumb you probably want to make more good decisions than bad decisions. 

  But speed, momentum, and organizational clarity also matter a great deal. 

  One of the reasons why I mentally come back to this book is because oftentimes I find that things can get hung up on relatively inconsequential decisions. So I like to remind myself that go is better than stop.

  As Ben points out in his book: “The only mistake you cannot make is running out of cash.” And time has a funny way of burning through cash.

  2018.09.16