Build with Leila Hormozi: Episode 248 - The 3-Step Decision Making Framework I Teach My Team

Host: Leila Hormozi
Release Date: March 6, 2025
Podcast Description:
In "Build with Leila Hormozi," Leila shares the invaluable lessons learned from scaling businesses to over $100 million and growing acquisition.com into a billion-dollar portfolio. This podcast is dedicated to entrepreneurs and business leaders aiming to create unshakeable businesses through effective strategies and insights.

Introduction: The Decision-Making Bottleneck

In Episode 248, titled "The 3-Step Decision Making Framework I Teach My Team," Leila Hormozi delves into a critical aspect of business growth: empowering teams to make faster and smarter decisions. She emphasizes that regardless of a company's revenue—be it $100,000 or $50 million—the ability to streamline decision-making processes is paramount.

Key Points:

• Decision-Making as a Bottleneck: Leila identifies slow decision-making as a primary obstacle to business speed and efficiency, often more detrimental than strategy gaps or resource shortages.
• Common Misconception: Many leaders believe their own decision-making is the issue, but it often stems from untrained teams relying too heavily on executive input.

Notable Quote:

"One of the biggest drags on a company’s speed is not strategy. It’s not even bad strategy. It’s slow decision making."
– Leila Hormozi [02:30]

The Six Inch Putt Rule: Simplifying Decisions

Leila introduces the Six Inch Putt Rule, drawing an analogy from golf to illustrate how simple, straightforward decisions should be handled effortlessly, without overthinking or hesitation.

Key Points:

• Golf Analogy: Just as a six-inch putt in golf requires minimal effort and thought to complete, business decisions that are straightforward should be approached similarly.
• Default to Delegate: Without proper training, employees tend to escalate even minor decisions to leadership, creating unnecessary bottlenecks.

Notable Quote:

"If you bring me a decision not fully fleshed out, not in a memo format, not written up with pros and cons, not with your recommendation or suggestion, I’m going to send it back to you and ask that you do that."
– Leila Hormozi [15:45]

The 3-Step Decision Making Framework

Leila outlines a comprehensive framework designed to equip team members with the tools and confidence to make informed decisions independently.

Step 1: Set Clear Expectations

Objective: Ensure that team members understand that critical thinking and decision-making are integral parts of their roles.

Implementation:

• Communicate explicitly that decision-making is expected and not optional.
• Encourage autonomy by conveying trust in the team’s abilities.
• Enforcement: Consistently hold team members accountable to prevent reverting to dependency.

Notable Quote:

"You need to establish with the people that report to you... I actually want you to make the decisions."
– Leila Hormozi [07:20]

Step 2: Provide a Decision-Making Framework

Objective: Supply a structured approach to guide team members through the decision-making process, ensuring consistency and thoroughness.

Framework Components:

1. Get the Right Information:

   • Define the problem clearly.
   • Establish the goal of solving the problem.
   • Gather key facts essential for decision-making.

   Notable Quote:

   "Before bringing a decision to you, they have to be able to answer three questions: What is the problem we’re solving? What is the goal of solving this problem? And what are the key facts that somebody would need to know to solve it effectively?"
   – Leila Hormozi [11:10]

2. Consider the Options:

   • Develop two to three viable solutions.
   • Analyze the pros and cons of each option.
   • Determine the most logical choice based on the analysis.

   Notable Quote:

   "Good decision makers think in trade-offs. So before somebody escalates a decision to you, they need to ask a few questions."
   – Leila Hormozi [13:00]

3. Identify the Risks:

   • Assess potential downsides of each option.
   • Evaluate the worst-case scenarios.
   • Determine if the business can withstand the identified risks.

   Notable Quote:

   "With every new solution comes new problems. So you want to know what are the problems that come with this solution?"
   – Leila Hormozi [17:35]

Step 3: Enforce the Framework Strictly

Objective: Ensure the framework is consistently applied to cultivate a culture of independent decision-making.

Implementation:

• Peer Consultation: Encourage team members to discuss decisions with colleagues before escalating them.
• Recommendations Over Requests: Team members should present recommendations rather than seeking permission, fostering ownership and accountability.
• Consistent Enforcement: Leaders must refrain from answering bypassed questions and adhere to the established processes without exception.

Notable Quote:

"If somebody brings you an open-ended question, send it back to them. If somebody hasn’t done the work to make it a 6 inch putt, make them do it."
– Leila Hormozi [25:10]

Building a Leadership Culture

Leila stresses that effective decision-making is a cornerstone of leadership. By empowering team members to make decisions, companies can foster a robust leadership pipeline that drives growth and innovation.

Key Points:

• Leadership at Every Level: Cultivating decision-making skills across the organization ensures that the company can scale without being hindered by executive bottlenecks.
• Long-Term Benefits: Although the initial implementation may slow down processes due to the learning curve, the long-term impact is significantly positive, leading to faster and more efficient operations.

Notable Quote:

"Decision making is a fundamental of leadership. If people on your team cannot make decisions, they’re not real leaders."
– Leila Hormozi [28:45]

Overcoming Initial Resistance

Leila acknowledges that transitioning to this decision-making framework may encounter resistance, as team members are accustomed to deferring decisions upward. She advises persistence and patience, highlighting that the short-term challenges are outweighed by long-term gains.

Key Points:

• Short-Term Slowdown: Training employees to adopt new decision-making processes may temporarily reduce the speed of operations.
• Persistent Enforcement: Leaders must consistently apply the framework to gradually shift the company culture towards autonomy and efficient decision-making.

Notable Quote:

"If you do this properly, our company will move faster, not slower."
– Leila Hormozi [22:50]

Conclusion: Empower Your Team for Sustainable Growth

Leila wraps up the episode by reiterating the importance of empowering teams to make decisions independently. She emphasizes that doing so not only alleviates the leadership bottleneck but also fosters a culture of proactive problem-solving and leadership development.

Key Takeaways:

• Set Clear Expectations: Clearly communicate the importance of decision-making autonomy to your team.
• Provide a Structured Framework: Equip your team with a step-by-step decision-making process to ensure consistency and thoroughness.
• Enforce Consistently: Maintain strict adherence to the framework to build a resilient and autonomous team.

Final Notable Quote:

"If you do this, your future self will thank you."
– Leila Hormozi [30:00]

By implementing the 3-Step Decision Making Framework, Leila Hormozi provides a strategic approach to transforming team dynamics, enhancing operational efficiency, and driving sustainable business growth. Episode 248 serves as a valuable guide for leaders aspiring to cultivate a high-functioning, autonomous team capable of making swift and informed decisions.