Decks: why their lists of 'key issues' are often just lazy thinking

Here's the next email in a series on ‘decks’ – reports written in PowerPoint, then emailed for people to read... but today's email also helps those who create reports in MS Word. (Previous 'deck' emails looked at their weird truncated English; why most decks are bad; the evils of slide-sorter).

Today's is on lists, and stumbles into this issue: what if we aren't able to make a recommendation? Maybe our recommendation depends on, say, each reader's values and beliefs...  what can we do then?  

On with today’s topic. Step back: imagine a CEO can’t decide what to do with a non-core subsidiary that’s a marginal player in its industry: (1) flog it; (2) hang onto it, but let it carry on unchanged; or (3) give it money to make a big acquisition so it becomes market leader. For simplicity, assume the CEO is new and doesn’t care if there’s a big loss on disposal, it can be blamed on the previous CEO. (This allows us not to worry about the timing of a sale – flog now or in a year?)

Figure 1 puts the issues in order. Bosses clearly see how different assumptions lead to different outcomes. They see tipping points, the points at which decisions hinge. The tree simplifies. And if unconvinced, here’s the tree in words. Don’t read it all – just skim it. See you at the end of the greyed-down text.

If we believe a diversified group is acceptable, and if the industry is unattractive, we sell.

If we believe a diversified group is acceptable and if the industry is attractive, we retain the subsidiary – or even invest in it if we can acquire similar companies at reasonable prices.

If we believe there are synergies and if the industry is unattractive, we sell the subsidiary if synergies don’t compensate for the unattractiveness of the industry. Conversely if the industry is unattractive but synergies more than compensate for this unattractiveness, we retain the subsidiary – or even invest in it if we can acquire similar companies at reasonable prices. (Are you still with me?)

If we believe there are synergies and if the industry is attractive, then we retain the subsidiary – or even invest in it if we can acquire similar companies at reasonable prices. (Almost there.)

Finally, we sell the non-core subsidiary if we believe a diversified group is not acceptable, even if the industry is attractive. (Phew, made it.)

It’s dense, repetitive, confusing, and a huge strain on short-term memory. Readers struggle to follow its endless twists and turns (“if this, then that; if that, then the other”), and may misinterpret its tortuous text as under-developed thinking. After all, poor writing often shows poor thinking, and Figure 1 seems poorly written.

It isn’t. Rather, it’s the wrong tool for the job. It should be a tree.

However, often bosses get neither tree nor text, but lists. Of ‘key issues’ (Figure 2). Especially if the document is a 'deck'. PowerPoint almost encourages us to write in lists. When deck-lovers write their slides, no, pages, they think they're creating prompts for presenters, hence don't do sentences. No sirreee, just do lists. 

I'm making a list, I'm checking it twice: And yes, I love a good list. They distil. They summarise. We talk about five steps for sending invoices, six lessons from our project, the Ten Commandments to live by. Even Santa Claus makes a list (and he checks it twice). Lists can be great, there's often a lot of thinking behind them. 

Not with this list though. OK, yes, Figure 2's list might at first impress, it seems simple to grasp (“gosh, the topic distilled to just 33 words!”). But when bosses discuss it, they quickly realise it’s half-baked lazy thinking. It doesn’t identify the hierarchy of issues nor relate them to outcomes. For instance, if a diversified Group is unacceptable and there aren’t synergies, bosses should flog the subsidiary, regardless of points 3 and 4 in the list. The list doesn’t identify trade-offs either. For instance, do synergies compensate for industry 'unattractiveness'? The list is lazy thinking and effectively says to bosses: “Work it out yourselves”.

Compare that to the tree: to create it, analysts must grapple properly with issues. What hierarchies? What trade-offs? What outcomes? Which means bosses needn’t grapple with them. Instead, they discuss. Trees clarify.

However, some people fear that trees are a sign of indecision. “Isn’t it better”, people say, “to dispense with a tree of options and instead state a recommendation?”. No. Often, the ‘best’ outcome depends on each individual’s values and beliefs. What are their views on synergy? On diversification? Etc. Often, an analyst doesn’t know each boss’s values and beliefs – and there isn’t consensus anyway. Some bosses think there’s synergy, some don’t. Some think diversification is bad, some don’t. An analyst can’t give one recommendation.

Which is why trees are so great – they work for all bosses. They don’t give an answer. They give the answers. They aren’t under-developed thinking. They’re exceedingly well-developed thinking, for they think through everything. They identify issues, then ask questions in the right order, and for each set of answers, they identify the outcome. They then give the information clearly in a way that’s easy to refer to and which doesn’t put a strain on short-term memory.

They enable everyone to quickly establish the course of action that fits their own assumptions. Which means they cover analysts’ backsides far better than giving just one recommendation – no matter what values and beliefs each boss holds, the tree covers it.

There is more I could say on trees. More reasons to do them. How to format them. How to spot when to do them. When you should eschew them. Criticisms people will wrongly throw at them. How a tree made my reputation where I worked (which is why I’m such a fan of them – the tree was about the internet). Etc. If interested, buy my book (did I tell you I’d written a book?). 

Time for the fun stuff – When Sally Ordered Pie: read the following, it’s when Meg Ryan (‘Sally’) orders pie in When Harry Met Sally, and it’s great:

Sally: But I'd like the pie heated and I don't want the ice cream on top, I want it on the side and I'd like strawberry instead of vanilla if you have it; if not, then no ice cream, just whipped cream – but only if it's real; if it's out of a can then nothing.

Waitress: Not even the pie?

Sally: No, just the pie, but then not heated.

All rather confusing. A shame, because Meg had incredibly well-defined priorities, but conveyed them the wrong way. A tree would be better (Figure 3).

Til next month.


P.S. Want to sit on the fence? Some people incorrectly surmise that I want people - no... demand that report-writers come down on one side of the fence or the other. No. I don't care if you sit on the fence. So long as you sit on it clearly. 

P.P.S. What if your boss spits back at you: "Don't give me a tree... give me the answer!": my boss once said that to me - to which I replied: "Problem is... it depends. I mean... imagine I say to you: 'Boss, I'm on hols next week - but what clothes should I pack?'; you'd say: 'Jon, it depends - will you be sitting on beaches, walking up mountains, or skiing down slopes...?'. So too with my report to you on this topic... the answer is: 'It depends', hence the tree".  

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