Thinking in bets

This is a follow-up post on prioritization, and the use of Loglines and thinking in bets. Here are some of the learnings (both good and bad).

I have seen businesses transformed over 2–3 quarters using the mechanism of bets and loglines. The key output metrics such as revenue, retention, product usage and NPS all improved.

Company cultures change to one of better serving customers. The rigor of decision making also improves, as well as the quality of decisions.

The whole company understood the priorities for any given quarter, and they could review the bets and logline documents.

The CEO and leadership team get a clearer view on how each other works and how their teams are thinking about the overall business.

Some leaders responded well to the overall process and the accountability of delivering bets, whilst others preferred to stick to old ways. The old ways could be classified as “keep it vague, don’t commit and avoid details”. This became clear after the 2nd quarter of use.

Some leaders were better than others in tackling ambitious large rocks. They could break them down into numerous bets, sometimes over numerous quarters. The same for seeking ideas across their teams, some were better than others.

From the post-mortems, we could see delivery issues could be traced back to the lack of clarity in the original logline, leaders not challenging assumptions or a lack of project management skills to get the bet completed in time.

Over time, the hit rate on successful bets improved. The goal was not to be right all the time, more about ‘right a lot’.

A framework like ICE is useful, but it’s not the primary goal of the exercise. It’s more of a weighing tool to rank bets. IMO no framework can replace customer empathy, sound judgment and an understanding of overall business strategy. ICE is useful to drive debate and discussion on the bet, rather than a binary data indicator.

Another key learning was that for some areas of the business (engineering, data science in particular), the team needed “spikes” to gather data and insights to help with shaping their bets.

Quarterly cadence is perhaps too long — Parkinson’s law is real. “Work expands to fill the time available for its completion” A 1 month cycle may work better to start with, and it helps to shorten the feedback loop.

You need to balance the focus on “rocks”, and the need to address tackling “paper cuts” across the business. I’ve seen a mechanism like “2-day Blitzes every quarter” work in tackling these “paper cuts”.

This book is an excellent read “Thinking in Bets” by Annie Duke. https://www.goodreads.com/book/show/35957157-thinking-in-bets