How to make decisions like a CEO
I like to think of myself as a founder and entrepreneur. But my job is also to be the CEO of Rakuten. And perhaps my greatest responsibility as CEO is to make decisions that will positively impact the company, our employees and society.
Recently, during a Q&A session at the company-wide morning meeting that we call Asakai, an employee asked me how I go about making decisions. It was simple question, but a good one. Despite the many important choices any CEO makes each and every day, it’s less often we take the time to actually reflect on the way we make decisions.
To answer the employee question at Asakai, I shared a simple, three-step process.
When faced with a decision:
1. Don’t risk bankrupting the company.
2. Don’t do something you’ll regret. But also don’t hold back if you’ll regret that later.
3. And I’m going to underline this, to highlight its importance: Make choices that will better society.
So how does this play out in reality? The truth is that I use this checklist all the time.
“At each juncture, you must ask yourself: Is this good for my company? Is this good for society?”
Rakuten started in 1997 as an e-commerce business and went public in 2000. Our mission was to empower people and society through the internet, and I knew e-commerce was only the beginning. I had to plot our expansion carefully. I knew I wanted to create an ecosystem of companies that could reward and empower our users. It wasn’t until 2003, however, that we first made substantial inroads into the new businesses that are now integral to the Rakuten Ecosystem.
It was 2008 before we expanded our e-commerce operation outside of Japan. Before I had my own company, I had seen many firms go bankrupt because they expanded too far, too fast. As I plotted our growth, I kept our financial health top of mind, ever careful not to overreach.
The issue of regret is one that I often apply when we are considering an acquisition, investment or strategic partnership. Will I regret acquiring a company? Will I regret NOT partnering with one of the world’s most celebrated sports teams? Projecting my emotional response helps me to think through the process. Regret becomes another way to weigh the risk.
Does it benefit society?
Finally, and most importantly, the good of society remains an important benchmark for me — and I know many other CEOs feel the same way. Your company may grow to the point where you can do many things, invest in many opportunities, and expand widely. But at each juncture, you must ask yourself: is this good for my company? Is this good for society? Things that do not make society better may not be the best use of your time and resources. It’s this desire to better society and create a brighter future that has inspired us to launch programs like Rakuten IT School NEXT and to invest into groundbreaking new cancer research. We all want to make the world better for ourselves and our families, so why not bring this desire to our everyday decision-making?
And here is one last important element of my decision making process: This three-step process applies to BIG decisions. If it’s a small decision you are facing, then I recommend that you just do it. If you fail, you can take it as a learning experience, one that can help guide your process as you move ahead.
