Decide Better!

Today Apple announced its new iPad. Again this provides a lesson in decision making. With every Apple decision over the last decade, it will be criticized by many. The iPod was criticized because it would be just another music player. iTunes was criticized because it was just another music store. The iPhone was criticized by many because Apple could not compete in the cell phone business. Apple apps were criticized because their value was not understood. The iPad is just a big iPod – that will be the criticism – too expensive, limited in media available, etc. But Steve Jobs, and Apple, can teach everyone valuable lessons in decision making.

These decisions were single decisions; they were a decision to go down a new path. Each of these was the launch of a new product line in a new market space, not just a product. There are two decision lessons here for businesses. The first is to look at strategic decisions like this as creating a new path, not just a single decision. A new path creates opportunities along the way – opportunities to launch new versions of the product and keep improving it. Apple kept improving the iPod, iTunes Store, and iPhone along the way, creating $12 billion in additional revenue. Businesses should approach strategic decisions as starting a journey on a new path and consider the opportunities it creates.

The other lesson is bold move decisions. Each of these new product lines was a bold move decision. Apple has grown because of bold moves decisions. Too many businesses fail to even consider bold move decisions, let alone have the courage to make them. To be successful in the future, businesses need to make bold move decisions!

These are decision lessons that can also be used in personal decisions. Decide to create an entirely new path for your life, instead of just making individual decisions. Make bold move decisions that can reshape your life.

So look at the Apple iPad not just as a new product but as decision-making lesson as well. Over its history, Apple also provided decision lessons in bad decision making, such as with the Newton. Steve Jobs learned from his good and bad strategic decisions and now is putting that experience to work. We can all learn from him too.

For more insight and guidance with improving decision-making skills, visit DecideBetter.com.

    As an expert in decision making, I pride myself on identifying examples of good and bad decisions. When NBC fist announced its decision to bring Jay Leno to prime time, I saw it as a terrific bold move decision. The television industry was facing declining viewership and advertising revenue and increasing production costs. Reality TV shows were one way to manage costs and increase profits. With one bold move, NBC created a new business model by putting Jay Leno into five prime time hours a week. The economics were beautiful. NBC reduced costs from about $3M per hour to produce a drama to about $300K. This lowered costs by almost $10M per week. Even if viewership was low, this was good economically. Jay Leno claimed that even if NBC got only 1.5% of the viewers it could make $300M a year. This bold move also kept Jay Leno with NBC instead of defecting to another network. This strategy worked reasonable well for NBC.

    But, the economics for NBC were not the entire story. Its local affiliates rely heavily on their 11 PM news for most of their revenues, and the lower ratings for the Leno show significantly drove down their viewership. It seems that a lot of TV viewers simply stay on the same station when the local news comes on. This move was killing local affiliates, and they threatened to stop showing the Jay Leno show to protect themselves. The decision was reversed this week.

    So the question is: why was this impact on local affiliates overlooked in the original decision? Was it not considered much at all and became an unintended consequence? Was it an assumption that the impact on local affiliates would be negligible? Was the decision made by NBC in isolation, without any concern about the impact on local affiliates? No matter which of these it was; it was a faulty decision and expensive mistake that could have been avoided if the decision was made more thoroughly.

    The decision to bring Jay Leno to prime time provides a case study in decision making, but not the good decision example I originally thought it was. It provides an example of how important it is to think through decisions better than this.