How I make decisions
(FORTUNE Magazine) – FORTUNE asked eight bold, creative people - from the next chairman of the Joint Chiefs, to the man who found Harry Potter, to the woman who picks next year's hip colors - to describe what guides their decision-making. Here is what they said. (This story is from the June 27, 2005 issue of FORTUNE.)
How the Marine Corps trains leaders
General Peter Pace
U.S. Marine Corps, vice chairman of the Joint Chiefs of Staff (nomination pending for chairman) - Washington, D.C.
When I was a second lieutenant in Vietnam, my platoon was patrolling around Hue City, and we came to a fork in the road. I called back to my company commander, "Should I go left or right?" He said, "Go left." We went a little farther, and there was another fork. I called back again: Left or right? He said, "Go right." Then I called back a third time, and he chewed me out on the radio: "You're the lieutenant. You're up there to make decisions. Figure it out." That has stayed with me all my life. When you have the responsibility to make decisions, make them.
When you have to make a decision about someone's future, or what kind of weapons system to invest in, or any other kind of businesslike decision, you should not let anybody rush you. On a battlefield, you don't have time to gather a lot of opinions. You have to assess the environment and make a decision based on your experience and training. You react instinctively. What I have learned is that if you're collaborative when you can be, it builds trust, so that when you have to decide right now, folks are more likely to trust your decision. In the Marines everybody understands that there are times when you just have to decide.
One thing the Marine Corps teaches is that it's better to be doing something than doing nothing. If you stay where you are, you're in the position where your enemy wants you to be. If you start doing something, you are changing the rules of the game.
The most effective decision may be the least predictable one. We teach this at officer training in Quantico. There's a series of decision exercises where a team leader has to accomplish some task - crossing a river, moving a large object - using only the materials provided. You think, "How are we gonna do this?" As it turns out, there are multiple ways to solve the problem. If you work together quickly - and start talking about what the possibilities are - you can come up with a solution. Those kinds of scenarios raise your heartbeat and put pressure on you among your peers and subordinates in a way that builds confidence in your ability to make decisions under pressure.
The ideas of flexibility, authority, and responsibility - those leadership terms that apply from lance corporal all the way up to general - have remained very constant in the Marines. What has changed is how much time we spend talking about it, practicing it, and significantly, the way the more senior leaders in the Corps allow themselves to be open with subordinates about where they made mistakes themselves. That makes it easier for subordinates to learn from them and to admit their own mistakes so that the organization can be better.
Some things today - cellphones and e-mail - are not healthy for growing leaders. Before cellphones, if the boss was away, the next person in line had to make a decision. It was either right or it was wrong, but you had to accept responsibility. You learned and grew from that. Now it's too easy to call for advice. Senior leaders have to start saying, "Look, if it's not dying or burning, don't call me."
The biggest lesson from Somalia for me [Pace served there from December 1992 to February 1993 and again from October 1993 to March 1994] was that we should never send our armed forces to do something unless we expect them to do it - and are willing to accept the risks and give them the resources. So as I sit here today as an advisor, anytime a military solution is being considered, it is important to lay out all the things that could go right and wrong. Then, if some things do go wrong, and they will, you are well positioned mentally and physically to complete that mission.
In Iraq, we are learning things every day. Before we even started operations, our Joint Forces Command put together a "lessons learned" team. Since then, every facet of the operation has provided lessons - targeting and what type of weapon to use on a particular target; the best ways to track friendly forces on the battlefield; how to communicate. Some of these lessons reinforced what we believed going in; some disabused us of what we thought was a good idea, but wasn't. The learning has to be shared person to person, not left in a book on a shelf. It has to stay alive. Interviewed by Jerry Useem
Choosing next year's colors
Color consultant and director, Pantone Color Institute - Bainbridge Island, Washington
When it comes to color, we are far beyond where we were in the 1970's, when avocado green was the edict. Every winter I forecast a palette that sets out what colors will be big next year. Twice a year, both in the U.S. and Europe, I participate in international forums where colorists like myself talk about where we see color going. I also am constantly looking at lifestyles and socioeconomic influences. For example, in the 1990's environmentalism was a big topic, and green became a leading color. I'm bringing emerald green into the palette for 2006. Because green has had a big run, you have to keep tweaking it.
Every March I announce my color forecast for the following year at the International Home & Housewares Show. More than 1,000 people come to hear what colors to produce their appliances and other consumer products in. It isn't all crystal-ball gazing. You have to make pragmatic choices. If I know, as I do, that 35% of the population will say some shade of blue is their favorite color, then for me to say, "Don't do anything in blue because it is not the hot color this year" is ridiculous. There are certain things you can't do. You wouldn't want to put anything red in bathwater products. It looks sticky or like blood. It seems so obvious, but clients don't always get it. They may love red. I have to tell them, "Let's divorce the personal from the professional self." As a decision-maker, this really gets to me. Interviewed by Julie Schlosser
Keeping planes apart
Air-traffic controller - Dulles International Airport, Dulles, Virginia
You know the first day if someone's going to make it as an air-traffic controller. It's not so much analytical as it is making a decision quickly and sticking with it. You have to do that knowing that some of the decisions you're going to make are going to be wrong, but you're going to make that decision be right. You can't back out. You've constantly got to be taking into account the speed of the airplane, its characteristics, the climb rate, and how fast it's going to react to your instructions.
You're taking all that in and processing it in a split second, hoping that it'll all work together. If it doesn't, then you go to plan B. If I put that aircraft on a runway to roll and it's not rolling, what's plan B? Because I've got a plane that's about to land on the same runway. So I tell the one landing to go around, but then you have watch because it's going to be near the departing aircraft. So I tell them about each other, I turn them, I separate them by 1,000 feet and then I do it all over again. Meanwhile, you still have another one that has to depart and another one that needs to arrive. You don't have time to overthink.
The percentage of us that make it to retirement is not real high. It takes a toll on you. We can't make any mistakes.
I wouldn't compare us to firefighters. At the end of the day, my life is not at stake like it is for the people onboard the airplanes I direct. A fireman goes on his shift and he doesn't know if he's coming back. But at the same time, firemen can go weeks without a fire. Here, we have one every day. Interviewed by Barney Gimbel
Laying down the law
Milton L. Williams
Associate Justice - New York State Supreme Court Appellate Division - New York City
On my very first case as a criminal-court judge in 1977, I gave a young man a year in jail for car theft. Afterwards I had to sit in the robing room for 15 minutes; I needed to contemplate the immense new power I had. Now that I'm an appellate-court judge hearing both civil and criminal appeals, that power's even more palpable. But it's not mine - it's the power of the robe, the bench, the law. When a statute is ambiguous, you look for the intent of the legislature. And if there's disagreement and you are in the minority, you write a dissenting opinion.
You can't let your personal feelings dictate your decision. I heard a case once where a homeless man killed a psychiatrist at Bellevue, and the city was being sued. I was troubled by it - after all, a life was taken - but the city was not liable. I knew that, and no matter how badly I felt, dismissing the lawsuit was the right decision.
Ultimately, what I consider most when making a decision is the impact our ruling will have on society. It's easy to make the popular decision, but our work requires more, because we're dealing with lives. You are not just rendering a decision and driving to East Cupcake to discuss it over cocktails. I'm willing to make a tough decision. That doesn't mean I won't think about it later. But just as I'm not afraid to dismiss an indictment, people know that if they're wrong, I'll bury them under the jail.
I call it like I see it. Interviewed by Nadira A. Hira
Calling a ball game
Former Major League Baseball umpire (1962-92) - Springville, California
You can't be a preacher if you don't know the Bible. The Bible of baseball is the rule book. When I was in the minor leagues, I spent two hours every day reading the rule book. I bet I've been through it 1,000 times. By the time I called my first Major League game, I knew it cold.
Umpiring is 60% rule book and 40% common sense. Common sense made me ask in my second year, "Why the hell am I standing out here screaming and hollering?" I decided not to holler anymore. One day [Phillies manager] Gene Mauch came out, and I just closed my mouth and developed "Harvey's 20-second rule." Listen to them for 20 seconds, and they'll start repeating themselves. And the minute they start repeating themselves, I got 'em. That's when I say, "I'm willing to listen, but not if you keep screaming. I'm going to walk away, and if you follow me I'm going to eject you."
On a close play, you have to sell the call. You want to let them know that, hey, I see it, and I know what I'm doing. So, wham, you put something behind it. Like a home-run call down the line. You take a look at it; now you come up, and you kinda half skip, jump, and bam, sell that thing with your hand hard to let them know you saw it good. Same way with an out call. You give a little bit more to your motion - bingo! - so that they can see the action, and it makes you look more sure of yourself, that you've nailed it. Interviewed by Oliver Ryan
Risking death on Annapurna
Mountaineer, author - Berkeley
We heard this huge roar and jumped out of the tent and saw this unbelievable avalanche thundering down - the third that day. I profoundly got it that somebody could die and I had brought us there. This was 1978. Annapurna had been climbed just four times; nine people had died trying. We were the first Americans and the first women to attempt it.
The avalanche made me realize how dangerous the mountain could be, and I wanted the team to leave. But their thinking was, "Let's just do it." We had a lot invested in the climb. Could I have pulled rank and said, "I'm the leader, and we're going"? Perhaps, but I don't like to say, "You do this, and you do that." I prefer to facilitate a decision being made rather than make it for others. Most of the team wanted to keep climbing, and I had to respect that. When it's a decision to risk your life, that has to come from each individual.
Once we decided to go ahead, I felt a kind of relief. Now we could put all our energy into doing the climb safely. The first team summited successfully; the second did not. Later we found their bodies. I had not wanted the second group to go on, but they were adamant. I felt this was their decision. I have since wished that I had been able to tell them they couldn't go. I get an idea, and I want to make it real. That's how I ended up on Annapurna. And once there, I had to weigh the reasons to keep climbing it against the cold reality of those lethal avalanches. That's where my decision lay. Interviewed by Abrahm Lustgarten
Managing Director, Equity Derivatives, Credit Suisse First Boston - New York City
When you see a trader panic, you can be pretty sure that for the next few hours, he's going to lose money. All the base instincts in your brain - what I call "caveman brain," the sort of fight-or-flight feeling of emotion that is designed to stop you from being eaten by a sabertooth tiger - takes over your decision-making. You start trading scared, taking smaller positions on good ideas and cutting profits too quickly.
I supervise about 23 people, and we can trade $1 billion a day. My goal is to make money 52% of the time. I can make the right call half the time by flipping a coin; a good trader does a little better. Successful traders don't spend much time regretting decisions or going back over things. If a decision turned out to be wrong, so what? Move on. So when you have to make a quick decision and you know that there's a good chance it will be wrong - the worst thing you can possibly do is sit there and panic and hope. You have to be decisive - go on and do it. When I see somebody go into panic mode, I tell them, "Get off the desk. Go for a workout, or go sit in the park for an hour."
The first thing I look for when hiring traders is emotional robustness. And you can get some very, very smart people, the classic Harvard MB person who has been top of his class the whole way through, but they haven't had the emotional experience of failure. They come into this trading job, and they have this view, "Okay, I'm going to work very hard, I'm going to do all the research, and then I'm going to succeed." It's fascinating watching them the first time that doesn't happen. There's this sort of "How can this be?" look on their face. That's when many of them get out of the business.
If people in a bar ask me what I do, I say it's a bit like stock trading but with more math. In some ways it's like being a police officer: There's a lot of time when nothing is going on, and then suddenly you've got to be really fast.
You can't wait until you have absolute confirmation. You're looking to get enough information to think that you probably have detected something, and based on that, you make your trades. Interviewed by Barney Gimbel
Discovering Harry Potter
Publisher, the Chicken House Children's Books; founding publisher, Bloomsbury Children's Books - Frome, England
When we started Bloomsbury Children's Books in 1995, publishing was full of "issue books" describing serious and important subjects for children. But they weren't books for book huggers, things that children responded to from an imaginative point of view. I got the manuscript for Harry Potter and the Philosopher's Stone [Sorcerer's Stone in the U.S.]. I read it that night, and you'd expect the sky to part and thunderclaps to sound - but it didn't. I just knew it was a great book.
I didn't know that a dozen publishers had turned it down or that the author, J.K. Rowling, had become utterly discouraged. I think everybody else passed on it for all the wrong reasons: It was long, the title was unusual, and the story is pretty dark. Rowling needed someone to see what it was, a story of bravery and danger and adventure but with great humor - as opposed to what it wasn't, a traditional children's book.
I choose books purely based on what I believe children will react to. If you carry the child within you, that's what works. You need a real ability to feel the hope, wonder, burning sense of injustice, fear, or rage of childhood - an unfettered mind that still dreams, that goes with the truth of story. I absolutely bet on my confidence in what children will like. Interviewed by Kate Bonamici