The Importance of Diversification in Decision Making

What you will learn

• Leveraging data for personalized and relevant customer conversations (03:26)
• Importance of collecting and processing relevant data for making informed decisions (5:07)
• Role of emotions in the car buying decision process (06:52)
• Three dimensions that a CEO needs to consider when developing organizational strategies (09:52)
• Strategies to consolidate information and prevent silos (17:49)
• Qualities of a an effective and efficient leader (19:01)
• Emotional quotient’s as a factor in decision making (20:12)
• Importance of reflecting and remaining open to new perspectives (23:01)
• Comparing generations about purpose and focus (24:00)
• Importance of breaking out of peer groups and gaining different perspectives (26:12)
• Book recommendations for practical perspectives (31:15)

Episode resources

• ChatGPT

Books

• Search Inside Yourself by Chade-Meng Tan
• A Brief History of Humankind by Yuval Noah Harari

Transcript

Ross Dawson: Jens, it’s wonderful to have you on the show.

Jens Monsees: Yes, Ross, good to see you.

Ross: Infomedia is a company that deals with information in automotive, and there’s a lot of information, and there’s a lot of interesting decisions. Two of the ones which stand out to me are the car buying decision, and it’s one of the big decisions in people’s lives, they’ve got lots of information, lots of people giving them data, and they’ve got to make a decision from all that information; and one of the other really interesting rising ones is the connected car, where it looks like we’re going to get more and more information inside the car. I’d love to hear what your insights are on how we can better serve individuals in buying cars or inside cars, or in the automotive experience, and maybe even what, as consumers, can we do to be able to better interface with the information.

Jens: Yes, it’s a very good question, Ross. I think we have to understand, nowadays, we are not into one-to-many communication anymore like we were 20 years ago in mass communications. Everything is now individualized. Everything, every communication is data-informed. That’s why Infomedia is so strong, because we know, from 1 billion cars on the road, when were they serviced, what parts are in there, what are the owners doing, when do they need a new car, when they have to come to service, and now with the connected car, as you mentioned, we would also then know what is wrong with the car, are the brake pads down, do they have a flat tire, what is the battery status, and all of these information we can use to have a meaningful and relevant conversation. Not just saying, oh it’s wintertime, come on and change to winter tires. That’s one-to-many.

But we could say, look, your brake pads are down, and you need to come in the next two months; actually, we see with your connected car, you’re driving every morning to work on this route. Our next dealership is 10 minutes away. We already have the new parts here, so you don’t have to wait. We also see that Julie’s contract is almost over so we don’t order you an Uber this time, we order you a test drive for the test car, our newest hottest model, and then you can drive to work with that car, and then in the evening, you come back and all your service is done. This is what I think we can leverage data for. I’m really a numbers and data-driven person.

And then the decision process of the car owners, the decision process in the dealerships, what is the next one that I put on the hoist, is my queue in order, do I have the right technicians at the right resources, and then from an OEM perspective, also, from an analytics point of view, how are my dealerships performing, do they have a high loyalty degree or a low one, do we have customer satisfaction, do we have a high convenience so we have a good customer experience, all together is basically based on collecting, processing relevant, and that’s the point, relevant data, don’t do like big data, boil the ocean, and you are more confused on a higher level, relevant information and then relevant communication to your customers, and that is what Infomedia is providing globally to the dealerships and to the OEs.

Ross: Let’s think about it from an individual perspective, I have a car, and I might be considering buying a new car because I have a connected car, the manufacturer is able to provide me with information that supports me staying with the same manufacturer, but then I can look at advertisements, I can search the web, there’s a whole array of different information that is available to me in buying a car and, as you suggest, when I service, how I service and so on. From a consumer perspective, what are ways that we can best access the scope of information that allows us to make the best decisions?

Jens: Yes, I think every human decision is still based to a very high degree on emotions. That’s why we are also sometimes making crazy decisions and sometimes we are looking for premium cars, for big horsepowers, or for a show-off model in a way, so as consumers, we need to search for ourselves what is important to us and be honest with ourselves. I always start every decision process with—What are my goals? What do I try to achieve? Do I want to have a show-off? Is design important for me? Is quality important to me? Is CO2 important to me? Do I want to have an electric vehicle? What is the distance that I’m driving in my commute but also on the weekend? How many people do I want to transport? Are they big? Are they small? Do I go skiing? Do I go surfing? I think many people in their decision-making process are not clear with their goals.

It’s actually the start of everything like, what do I really want here? Then you can check certain dimensions, and you can say, oh, this model is fulfilling 80% of what I want and this other model is fulfilling 90% of what I want. What we still observe with every human is that when the goals are not clear what you’re really after, then you might go to a dealership and come out with a very emotional decision. You have a car, and then you have fun for two days, and then you say, Oh, my God, what have I done? Because I’m not clear about the goals that I actually wanted to achieve.

Ross: Yes. As I was writing my book “Thriving on Overload”, you start with purpose. What is it that you want to achieve? Or is there one in my life? Then you can start to look for the information that serves you so you can assess that appropriately. We might want to come back to that. But other very relevant types of decisions that are made are those by corporates, yourself as a CEO of a large organization. We’d like to hear about, just as a high level initially, what is your process for looking across the information, across the technology worlds, information worlds, data worlds, automotive worlds, competitors, and so on, across the planet. How do you find all the information that’s relevant to your thinking and your decision-making and pull that together into your understanding of the landscape?

Jens: Yes, I would say there are three dimensions that we need to look at. I would be a very stupid CEO if I think I know exactly what the strategy should look like for the next five years. When I normally come into a new organization or a new business, then I call my 10-20 strongest leaders, and I try to listen, and I try to structure my questions in the right way. I would then like to have diversity; I hear from the Americas, I hear from Asia, I hear from product, I hear from engineering, I hear from HR, from people and culture, from finance. Then you get different points of view. If you have a very strong culture, and you created that level of trust, and people talk freely, and they are also not afraid of any conflicts, and conflicts in a way, I see it like this, you see it like that, I think that’s very vital. Then you can debate and you can go deeper with your team and have that discussion. Then you construct basically with your team the strategy for the next three to five years.

It is important that you are bold and visionary enough, and not just formulate to-dos for the next six weeks or so but really what is the transformational visionary goal we want to achieve, and to formulate this in a very diversified and broad team approach. I’m a strong believer that when you have that north star, it always gives you direction then in day-to-day work, Okay, this is a vision, that is the strategy we have aligned, is that next step or that next decision aligned with the north star and the overall strategic direction, that’s one.

The second is a lot of discipline. As a CEO, I see one-third that I spend my time is with the team. One-third of my time is spent with clients and listening to clients. I just had two client meetings yesterday, asking them, how does it go, what do you like about our products, where we need to improve, what are the challenges that you are facing, and what opportunities do you see? Then the third part is the investors, so what do they expect, are we aligned on what the company can deliver in terms of gross profit, new channels, and new geo regions to conquer, and do you have the funding then available as well?

I think the first thing is having a north star, a long-term vision. The second thing is being very disciplined. I plan the year and, maybe that sounds very German, but I really know where I want to be. I know, two times in Japan, two times in the US, two to three times in Europe. You have a plan, and then you also flex on that plan. These are all the board meetings that are coming. At this board meeting, I can take that step or milestone in our strategy. And then you also want to be disciplined in the evenings when you are not in the office and when you’re not with clients, and you read.

I still have a lot of newsletters, and news flashers in my Google profile. I look at LinkedIn. I know what the German newspapers, the Australian newspapers, and the American media are saying about the automotive market, I look at the big car shows, I read the financials, the Financial Review is good, and The Australian is good; you need to be disciplined and you need to also be targeted in your own information gathering. As a CEO or decision maker, you tend obviously to direct in a certain direction but you need to listen, you need to say what can I do better, what did you see, what is working, and what is not working, and always have that dialogue with your team, I think that’s very important.

We just implemented here a feedback culture in Infomedia. You get so much back from your team, knowing what you have to work on, and it’s a constant learning process. Even as a 53-year-old CEO, you cannot say, oh, no, I know it all, I know I do like I always did, we should not fall into this trap, we should always challenge ourselves and say, really? Is that still the right way of dealing with these things or do I have to change myself again? For example, we are now doing a lot of tests on AI, on chatGPT on how we can do our coding and our internal information gathering more efficiently and more effectively. It’s a new challenge. I’m learning a lot again.

Ross: It keeps life interesting.

Jens: Yes. I don’t know if everything is good or bad, but it’s for sure a fascinating new way of working and another dimension. I think that especially AI for the next five years will disrupt and improve several of our business models in the macroeconomic environment.

Ross: Fabulous. I want to dig into a few things there. One of the interesting things there was you laid out some of your information sources and the fact you block out the time to be able to make sure that you’re keeping across that, obviously fundamental, you talked about the questions, so asking the questions of your team, of your clients, being able to surface issues, and then from all of those, seeing if everyone agrees, then you’ve probably headed in the right direction, but where there is a difference of opinion that you have an issue to debate, so you can then dig into that and see where does the evidence lie or what’s the foundation for moving forward. But I think one of the things often missing from these discussions is that, okay, you have the strategy, but in between surfacing those ideas and the strategy is a mental model or framework or a way of describing, saying, this is the landscape or these are our assumptions or this is where the way that we see the world fitting and this is the way that we can agree that we understand the same way. Is there any way either in your mind or with your team that you are laying out the landscape on which the strategy is built?

Jens: Yes. For example, we are having now, every three months, a discussion on our product roadmaps. The vital thing is now it’s not just the product managers talking about their product roadmaps, it’s the three regions that actually are in daily client contact, giving feedback to these roadmaps and giving market insights, observations, and again, data about there’s a big opportunity, or this is a nice idea but you can never commercialize it, or this cost you 10 million of R&D funding to get it over the line. I think in a leadership, in a vital leadership way, you need to put these points of conjunction and consolidation into the year and into the team, otherwise, you have different silos, different camps that are not understanding each other or not working together effectively and efficiently.

The other thing is, also as a leader, you have to allow yourself to sometimes be wrong. We are putting out a bold vision, and then we are working on it, and then maybe we see, in reality, this is working, and this is not so we have to also flex, we need to constantly reflect is that still the right thing?

Ross: Are there practices you have for sensitizing yourself to those signals, or saying that this, for example, would be an indicator that we might need to change things? Are there any specific practices to help you surface and be more aware of the things that suggested change, of course, might be useful?

Jens: Yes, there’s an internal one. I showed that I’m very confident and I lead the team, but I’m constantly reflecting. Every evening, every ride to work, or when I have some time, I’m reflecting. Really Jens? Is that still the right thing? What are your assumptions based on? Are there any new data points that we have to look at and flex on the strategy? There’s also then an EQ element of emotional factors that are coming into consideration. It’s not only all rational, and especially our own emotions are sometimes playing games with us so we should always come back to reflecting.

I have very good friends, I have a very strong board, where I can have a walk here at fresh water or lake and look, I have this decision to make or this challenge, or this problem, or this opportunity, my assumptions are A, B, C, D, E, F, G, and, then tell me where I’m wrong, asking really where I’m wrong and being challenged, that gives me a totally different point of view. I do this a lot with my partner, with my wife as well. She is giving me a different point of view, and it’s helpful as long as you take it in and you’re not immediately deflecting and just defending your idea. That is where leaders never should get into arrogance or a routine, you always have to stay curious. What do you think? What do you suggest? What is your point of view? I think that these are the questions to ask. Then you also have to have discipline, you have to challenge yourself, learn something new, learn a different point of view, and hopefully, then you’re open enough and you stay open for a long time. Even when you are 70 or 80, you still can learn and this is one of my philosophies or principle, lifelong learning, putting yourself in different situations, and then you see how it goes.

Ross: Now that’s fabulous. I think one of the things I see not nearly enough of is stating assumptions, simply that practice of saying all right, this is what I think and this is the assumption that underlies that and that simple practice of simply being able to say this, alright, what underlies this is this assumption and this assumption, this assumption, and that’s when you can then go to somebody. Because you’re stating them are not assumptions as opposed to saying this is set in stone, and this is what underlies it, that gives you then the flexibility to listen, to bounce it off, and to develop it. I think that’s fantastic, and something I don’t see as much of in major decision-making as there should be.

Jens: It’s hard because as older you get the more experience you have, and you learned over your life, over your career, these decisions or this behavior was helping me in the past, but it’s not always a given that this behavior and this pattern that you applied will help you for the future. I think that is a big learning that you always have to reflect and flex in new situations. Sometimes I also feel in some of the big leaders of politics, of companies, that they had like 30, sometimes 40 years to get to the top of an organization, and they came there by applying certain methods that were right at the time, but who is telling us now for the future, that these are the right decision-making processes still?

I would say that Generation X was very much focused on commercial outcomes, on wealths and company growth, and we did amazing, but we probably didn’t engage enough in environment protection, distribution of wealth also to poorer countries, mitigating conflicts, we are now having huge situations, and Europe was at a war with huge inflation because we were living over the edge, that means we were consuming more than actually we were producing, and we need to also reflect on these kind of things, did we always have the right focus and the right purpose in our leadership roles. I think, there, we definitely need to get better. My secret sauce is a lot of talking to younger people in the organization, to my kids, to the friends of my kids, what do you think, what do you see, and they give you a totally different point of view of many things. If you’re open enough to listen to them, and not just coming with your experience in your life, then you can still flex and take different points of view than you would have in the past. That’s where I think we are missing out big time in today’s world.

Ross: Yes, it is probably the nature of the big decisions that are made today are made by groups, essentially, small groups of not-so-young people, and often the decision-making processes sound good, but the reality is, there’s just a conversation out of which a decision comes. Bringing in as much diversity as you can bring into that, whatever that method is, is going to lead to better outcomes.

Jens: Yes, I think one thing is very important here. It is very hard. You are in a certain peer group and your peer group has normally very similar opinions and patterns of thinking as you have, and to break out of these peer groups and to travel to have a different point of view, to meet other people that you normally don’t meet and/or the algorithms that are currently feeding you with always the same information because you clicked on something. We know that the whole media business is a business, it is not just information that is neutral and unbiased, they’re very biased, because with every click, with every eyeball, I get more revenue. Often I also put the cookies off and force myself into the other camp. What are all these people thinking that are electing Trump? What are they thinking? Can I try to understand their point of view?

There might be some good things in that that we would never discover if we would not go into the other camp. That should normally happen also with Ukraine or Russia. It’s really interesting how sometimes media is very one-sided, and we fall into the trap of listening long enough to the same stories, and then we believe in them, and we are building certain patterns, and it’s not always reality. If you force yourself at the moment to watch and don’t say, that’s right, but if you watch some Russian news, then you go into some Fox News, and then you go into some German news, and then you go into some Australian news, then you hear totally different realities. But then you are more informed and you can form your own point of view, and just not follow some algorithms or some patterns of your peer group.

I think that’s very important as well, stepping out of your seat. In my case, and Infomedia, talk to a technician and a dealership, what are they struggling with? What are they happy with, and what not? Talk to a car owner that has to drive his car into service, normally a very painful exercise, and you can learn from it, and you can make that experience much better. That’s, I think, what real leadership is about.

Ross: Absolutely, I describe it as having an information portfolio. In the same way as a financial portfolio, you need diversification. If you’re in a single asset or a single place, then you could get in big trouble whereas if you have as broad uncorrelated assets or information coming in, that’s when you can make sense of it and that’s when you can have the richest perspectives. You do have to make the assessment and judgment and make up your mind but you can’t do that unless you have sufficient diversity of input.

Jens: Yes. Ross, that brings us to the very first point of our discussion, what are my goals, and you can even weigh them? Normally, when they’re big strategic decisions, I write down a list of goals. Then I say this is most important, let’s give it a 40%. This is a bit less important but still important, let’s give it a 20%. Then you see what options you have and you can overlay the options with your goals and you can say, this is a 70% fit, this is an 80% fit, or this is just a 20% fit. Some of them are hygiene, so you need to hit them and others are other dimensions of goals that may be nice to have, but not necessary. I think that that’s where it all starts by having a good goal and decision grid of what we want to achieve here. Then you are much more firm in your decision-making. That’s what I call the north star that gives you the vision and also the broader view of where you are striving for and what your purpose is.

Ross: Absolutely. Are there any books or people or references which you found, that have informed your ways of thinking around this or aligned with the way you think about these issues?

Jens: Yes, like I said, I’m using many news feeds from different parts of the world, from different media, and different stakeholders. That’s one point.

Ross: But in terms of the process, the way you think about it, the way you act as the leader.

Jens: Yes. I like very much the three books of Harari, where he’s talking about the evolution of mankind, and why everybody has a green garden. There’s so much deeper thinking into our emotional patterns, and they make you aware of how you make decisions. I think these books at a certain point, are repetitive as everything, but to get into it and reflect on yourself is good. Then there’s another book Search Inside Yourself, which I like because that’s a curiosity, of always reflecting what are your deeper beliefs, why you are thinking like this or like that, and why you always come to this conclusion and not go the other way. I think it’s about the consciousness of how you’re doing all these unconscious decisions as well, and how you interact with humans. Are you aware of what you’re radiating, and how you communicate, and how does it land into the other? I think this is very important.

Then there are some German books. I won’t tell you the titles because it would not matter. But there are also in our language, they can be indefinitely or it can be very vague. I’m more on the data and definite side of things. For example, in a client discussion, you can say, I believe, there’s not much more that we can do on price, that’s very, very open. If you have a good procurement manager, you would immediately dig into it. Or you say, this is all I can do on price. It sounds like the same message, but it’s totally different. Our language and our communication needs often to be more conscious and more prepared for what we really want to say and what we really want to achieve.

One of our secrets here is we always write the minutes first before we go to a meeting. The question I always ask my team when we go into something is what is victory here? What do we really want to achieve? Because it sharpens your mind and it gives you focus, and it drives better outcomes if you are clear on what you want to achieve and what your goals are. If you write it down, it’s even stronger. Then maybe the discussion with a client is totally different. Then you have to adjust your minutes that you want to send out but you sent them out before in your mind and you draft them before in your mind because then it’s guiding your thinking and it’s guiding the goals that you want to make, and I think that’s very important as well. Again, it costs a lot of discipline. But it works very well if you are knowing what you are striving for, and when you have a clear focus on purpose.

Ross: Yes. The book dimension was Search Inside Yourself by Chade-Meng Tan and Yuval Noah Harari’s three books, A Brief History of Humankind just for the listeners who might not have been aware of this. That’s fantastic. Thank you so much for your insights, Jens. I think there’s so much of what you do in that openness, which to ideas and perspectives and insights, which we all need to be learning in a very rapidly moving world. Thank you for your time and your insights.

Jens: Yes, Ross. Thanks a lot. Yes, let’s stay curious. That’s my mind driver. Thank you. Take care.