Published in the San Diego Union-Tribune, May 14, 2018
Recently, I was in a board meeting for one of my companies, and the subject of a complicated financing was being addressed. While it was my sweet spot, I was not initially effective in my presentation because I “knew too much.” I had fallen victim to the “curse of knowledge.” I have experienced this frequently when I am on the receiving end of complex, technical, detailed or nuanced information. Typically, the presenter communicates in a way that works best for him, rather than in a way that works best for his audience.
The Heath brothers (Dan, professor at Duke, and Chip, professor at Stanford) have explored this dilemma in their book “Made to Stick.” In essence, their thesis is that presenters make assumptions about their audience’s knowledge and they take shortcuts in their explanations. In my little board meeting, when my turn came, I went to the white board and laid out the whole scenario complete with recap, options, warrants, discounts, and with a flourish, a tantric pre-money valuation. I expected a standing O, and what I got was blank stares. I had failed at my job.
I was in the mode of demonstrating mastery, but I had not fully understood my audience. I had said what I wanted to say, but I had failed to ask “What does my audience need to hear?” The classic example is to try to explain to someone how to hit a golf ball or how to fire a bow and arrow. How would you describe the appropriate steps to a novice?
First, diagram (develop your stance). I love making pictures on the board and then connecting them with lines. It forces logical progression. Second, deconstruct (show the grip of the bow or the club). But here again, your audience does not need to know how to hit a reverse fade over the water around a tree. All it needs to know on the driving range is to not let go of the club and hit somebody with it. Third, compare (Uber for lawnmowers). Use something else that is very well-known. Fourth, draw (you know pictures and a thousand words — no more need be said here).
Fifth, backward map (go to the end result and work backward to show how you got there). If we want to launch in eight cities, then we need to do the following first and in this order.
Sixth, chunk (let it fly, release the bow and observe the results).
As always, I remain fascinated by decision-making — and the fact that most of us get it wrong most of the time. I recently read a paper by Joshua Schwartzstein, a professor at Harvard Business School professor. He breaks down bad decisions into either “mental gaps” (like the board/financing story, not enough digestible information) and “frictions” (too many choices). In one particular negotiation, I am confronted with a person who believes her demands are reasonable and her options for behavior are strong. In contrast, we believe she has at best one leg to stand on. So using some of the six tools, our job is to provide clarity as to her actual cards, as well as provide very reduced choices (which is a fancy way of saying, take it or leave it). Better some pie than no pie — especially if you are hungry.
In another instance, one of my clients is thrilled that a public company wants to look at a possible acquisition of his company. Their market capitalization, however, is less than $50 million, and my boy is doing $22 million top-line revenue. So I suggest that instead of them buying us, why don’t we buy them? My client had not considered that possibility, but now it’s on the table.
Finally, good decisions can be forced upon you. My gang had an idea — but the limitation was how to build it. Suddenly out of the blue, a software development team becomes available (a large company dismissed some geniuses). Without them, we could never have done it. But the team shows up and we are “forced” to pull the trigger or lose that team and the idea. That take-it-or-leave-it thing cuts both ways.
By the way, the financing was approved unanimously (after I slowed down and drew lots of pictures, arrows and numbers).
Rule No. 560: If I knew the answer, I wouldn’t have to decide.