5 Tricks to Make Better Decisions as a Product Leader

Product Management is not science, which adds to the difficulty of decision-making. It means there is never a single right answer, so there is no way to know if we're right or wrong. But there is a way to establish a product management decision-making framework that can guide us through the uncertainty.

A lot of people depend on me. 

Specifically, they depend on the decisions I make. 

As a product leader, every decision I make defines what multiple teams work on, shapes our group's focus, and ultimately influences the success of the product, the company, and the people who work here. 

Long story short: most decisions we make as PMs lead to significant impact—sometimes good, sometimes bad. That is why it is important to make good decisions.

But you already knew this. 

What you might not know is that making these decisions—especially when you know they will have wide and long-term effects—is not easy.

Three things make it tough:

1. Ambiguity

Most challengingions we make are made without perfect information. We don’t have all the data to know if our decision is the best one, and most decisions have multiple assumptions baked into them.

2. No right answer

There is never a universally correct answer. If you give the same problem to two different product leaders, both may have different answers, and both can be right. This makes it even tougher to make good decisions.

3. Low/no past benchmarks

The more senior you are, the more novel the decisions you face. Most situations you encounter in your business have not happened before. There’s often no learning or past data to rely on.

But just because it’s tough to make these decisions, does that mean we stop making them? Obviously not!

Here are a few tricks I use whenever I’m making critical decisions.

What I’m reading:

1. Enterprise Philosophy and The First Wave of AI: “A computer on every desk and in every home” was a corporate goal because Microsoft accomplished it with help from its longtime competitor, Apple.
2. Supercommunicators (Book): The biggest mistake we make is assuming that communication has occurred (even when it hasn’t.) This book teaches you how to make “successful” communication happen.
3. Made to stick (Book): The best way to share ideas, stories, and thoughts is in a way that people listen and understand.

(These are not affiliate links. I am reading these books and absolutely love them.)

#1 Simplify Everything

Most of the problems I’m solving are complex, not straightforward, and I have not solved them in the past.

While I might have some of the information about the solution, I can find more information about the problem. That is what I do—I start by breaking down the problem into its fundamental truths, facts, or principles.

The moment you start breaking down the problem, you start seeing its hidden aspects. Some of these hidden things(which are not always very obvious) might give you more information that will enable you to find a better solution. 

This is also called First-Principle Thinking. Another great method (that I use very often) to simplify complex things is Feynman's technique. A structured decision-making framework template can help visualize these elements.

#2 Focus on The Problem (Not The Solution)

Most bad decisions have been because I was too focused on the solution.

You could spend your time improving the solutions you’ve already thought of. Or you could ensure that you’re solving the correct problems (and then find a good solution.)

Humans are always eager to do something, so they want to think of a solution and start building it. Building it gives us something to do.

whereas thinking and rethinking about the problem requires us to sit quietly and THINK—and we hate to think.

In such situations, I force myself to think. While thinking, I answer the question, “What is the real problem we’re solving?” I keep asking it until I’m sure I know the root problem to solve.

Until then—until I know the real problem—I do not talk about it or let others discuss anything about the solution.

#3 Remember The Customer And Their Needs

Some decisions consume you so much that you forget the customer.

I keep re-focusing my teams on the customer. Understand what the customer needs. Then, and only then, make your decision.

Amazon's Working Backwards method also helps make this more tactical and structured.

#4 Second-Order Thinking

When making critical decisions, it's essential to consider the impact holistically, not just what's happening right now. If you only focus on the immediate impact, you will miss important information and make mistakes. 

For example, you're an Uber product manager and have added a new feature that tells drivers when and where demand is highest. Before making any decisions, consider how this feature will affect drivers and passengers in the long run.

First-order thinking:

Drivers will optimise their schedules to be available at the right time during the peak hours (in the hope of getting more rides and earning more).

Second-order thinking:

As more drivers (in a given location) get access to this information, all of them become available during the "peak hours." This leads to oversupply during those hours, which suddenly cease to be peak hours.

As a result, other locations with low-moderate demand will have no supply of drivers. That leads to frustrated customers (who are left waiting for a ride!).

So, the drivers who were expecting to earn more are earning less because they are now competing with a larger pool of drivers. The riders who are waiting for cabs in low-demand areas are still waiting.

This leads to churn, low ratings, and a net negative impact on the ecosystem.

See where this is going?

Always consider the second—and third-order impacts when making decisions. This will give you a complete understanding of the full impact of any action, which will help you make better decisions.

#5 Think Out of The Box / Think Big

Sometimes, you need to think differently.

One technique that pushes me to do this is asking questions like, “How can I achieve my 10-year plan in the next 6 months?” or “Why 2x our revenue next year, why not 200x it?”

I hope you get the drift.

The point is that such questions impose extreme constraints on the situation.

The moment that happens, people start getting creative. They start thinking of ideas that they would never think of in a business-as-usual situation.

That said, there is no perfect formula for making better decisions. These tricks work for me, but they might or might not work for you. That is why it is important to create your own toolkit. These tricks work for me; they may or may not work for you. It’s essential to develop your toolkit for decision-making, drawing from a product management decision-making framework that fits your style.

Everyone has a unique and different thinking process. Understand yours and create methods that work for you.

No matter what you do, be sure to learn with every decision.

Every decision could either be right or wrong. In both cases, you can learn what to do and not do the next time you’re in a similar situation.

And when you’ve done it for 5+ years, maybe you will write this article and share how you do it.

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For further insights, check out our Product Managers' Communication Toolkit and the Fundamentals of Product Management. These resources can help enhance your decision-making framework and overall approach to product management.

P.S. We’ll discuss Product Vision, Strategy, and Roadmap—what they are, the difference, why they are essential, and how to create them! We also have exciting gifts worth $500 to win IF YOU ATTEND the event. You can read more details and sign up here.

You Got Questions? I Will Answer

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1. What is step 5 of the decision-making framework?
   Step 5 is all about thinking big and getting creative. It’s about asking yourself how to achieve your big goals faster or even multiply your results. This mindset can open up new possibilities.

2. How do you make decisions in product management?
   Making decisions in product management means focusing on the real problem at hand. Understand what your customers need, break down the issues to simplify them, think about how your choices will play out in the long run, and always stay open to fresh ideas.

3. What are the frameworks for decision-making?
   There are several helpful frameworks for decision-making, like First Principle Thinking, which helps you break things down, Amazon's Working Backwards method for staying customer-focused, and Second Order Thinking, which helps you understand the long-term effects of your choices. These tools can help clarify your thinking.

4. What are the 5 steps in management decision-making?
   The five steps in management decision-making start with clearly defining the problem so you know what you're tackling. Next, gather all the relevant information to make an informed choice. After that, brainstorm different solutions to explore your options. Then, evaluate those options carefully and pick the best one based on your insights. Finally, put your decision into action and review how it turned out so you can learn and improve for the next time.