4 Principles of Effectiveness: Principle #2 - Cause & Effect Decision-making
In article one of this series, I told you about how I've learned to value simplicity, how this appreciation led to the 4 principles of effectiveness, and I also introduced Principle #1: Conscious Decision-making...
This month we journey into Principle #2... Recognizing the Cause & Effect Relationship Between Behaviors & Outcomes.
Before we dive in, let me recap the 4 principles.
The 4 Principles
In this article series, we lay out the foundations of the 4 Fundamental Principles of Effectiveness, based on First Principles Thinking from physics & biology to explain how you can implement new behaviors to achieve more, faster.
The 4 Principles of Effectiveness are:
Moving from Impulsive Decision-making to Conscious Decision-making
Ordering your behavior off cause & effect relationships
Adopting effective frameworks
Principle #2: Understand the Cause & Effect Relationship between Actions & Outcomes
To help you understand why Principle #2 is so important, we need to look at an example of what I call the "Sounds good, but is really BS" phenomenon.
Management by objectives
Management by wandering around
Total quality management
Business process reengineering
And as you read through this list you realize just how many fads have come and gone.
This is the point.
When you don't know how to think for yourself, you revert to copying other people's ideas.
And that presents a problem.
Unless we know the cause & effect relationship between our behaviors and our outcomes, we know very little.
If you're unable to see very clearly how one action leads to a specific result that you want... many things you'll copy will not work.
For example, empowering a new Starbucks barista with the ability to make his own version of a venti latte will destroy the brand. The barista needs to learn the right way to make a latte and stick to it.
That's pretty common sense, but when all your colleagues are excited about the new hot management trend, you might be swept away in the excitement too. And that has a consequence.
Enter Principle #2
When you step back and think about how many things these management fads impact in your company, you begin to realize just how hard it is to think clearly about something.
Here are a few examples of business processes I've seen good thinking thrown out in exchange for a fad:
how you run meetings,
how you set a direction for your business,
how you have performance conversations with employees,
how you review your financial statements,
how you follow up with people for marketing campaigns,
the words you actually say in front of clients,
how you hire people,
and a whole host of seemingly small, important things.
You may even be practicing one of these fads right now and not realize it. That's how pernicious it is.
So what do you do about this?
The antidote is to reflect more on the cause & effect relationship between your actions (and your employees' actions) and the outcomes they produce (good and bad).
I know how simple this sounds, but hear me out.
Mapping Target Outcomes to Required Behaviors
When I was a broker fresh out of college, we were given a phone book and a desk with a telephone. Our job was to make as many calls as possible to money managers all across the United States to sell them bonds.
I was terrible at the job to start, but after three long, hard years of making anywhere from 40 to 120 cold calls a day, I knew exactly:
how many calls were required to hit my monthly quota,
how many bonds I needed to bid on each day to find a great deal for my clients,
and almost exactly how much money I'd make each day if I followed through on my plan
There was a direct, measurable correlation between my effort and my outcomes. I couldn't fool myself.
And here's the open secret...
Almost every goal you can think of has a set of cause & effect relationships that are prerequisites for it to be possible.
But - if we've never done something before - we're often too ignorant to know ALL the steps required to achieve it. And that's why we look to "gurus" to give us shortcuts. We look for them because they really exist.
But those gurus are not always right.
Filtering the BS through the Lens of Cause & Effect
So how do you know if something is worth trying?
Like Ray Dalio says in his famous book Principles, who you take your advice from is one of the most important decisions you'll ever make.
Finding people who have achieved what you want to achieve at least three times is one of the fastest, surest ways to get to the truth and understand what must be done.
There is no better advice I can give you than this.
But in the absence of an experienced mentor, simply asking yourself "Do I understand why this will work?" is a great place to start.
It's this question, asked repeatedly, that builds your awareness that you may be acting impulsively on management guru gobbledygook.
The goal is to know when you're walking around with a bad plan so that you can go seek out a good one.