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Prioritising “one way door” decisions…
To scale up a company, the CEO needs to balance day-to-day management with major strategic “One-Way-Door” decisions.
Amazon has announced that Jeff Bezos will be stepping down as CEO and taking on the role of Executive Chairman.
The goal is for Bezos to be less involved in the day-to-day operations and focus on major strategic “One-Way-Door” decisions.
What are One-Way-Door Issues?
In his 2016 shareholder letter, Bezos explained that there are two types of decisions.
One type, he wrote, is like a two-way door: if you’re not happy with your choice, you can always walk back through it.
The other type is like a one-way door: it’s not reversible, so you have to be very careful about making that kind of decision.
Here’s some examples of ‘Two-way-door’ decisions:
- Hiring a Jr. Account Executive that doesn’t work out is a two-way-door decision. It doesn’t always need the CEO involved. It can also be reversed.
- The same is true of thousands of decisions a company makes on a regular basis.
‘One-way door’ decisions are not reversible, you can’t go back through the door. That means you have to be careful when making them.
Here’s some examples of ‘One-way door’ decisions:
- High-level strategic decisions that affect the direction and outcome of the company.
- Important initiatives like whether to take a company public, or
- Whether to make an acquisition
Once you make those decisions, it changes how you operate in a way that you can’t simply reverse if it doesn’t work out.
They require time and thoughtfulness and shouldn’t be made lightly.
For Bezos, the “One-way-door” rule is valuable because it gives him and Amazon a way to decide whether a decision is important enough to get involved.
What a great way of thinking about the importance of decisions!
It makes it easier to let go of everything else and only focus on things that have that level of impact on the business.
That frees up his time for other things.
The reality is the same thing is probably true for you.
Unless you’re a solopreneur, trying to make every little decision isn’t sustainable.
Even then, there will come a point when you won’t be able to grow without multiplying your resources and building a team. As you do, that means handing off many of the two-way-door decisions to people who are qualified to make them without your input.
Bezos makes the point that companies shouldn’t confuse the two types of decisions because it results in “slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention.”
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I hope you have enjoyed these insights. Have a great week and stay growth-focused!
Best Wishes,
Jonathan