In this episode, we talk about how to increase the probability of success in your processes to make you a good strategist
One of the key skills to be a damn good strategist is to understand how probability works because strategy really is math. Now, in terms of probability, today we are going to go over how we can use probability to make sure that we are able to define a strategy that will bring us or that will increase the likelihood of the outcome that we're looking for.
So in terms of probability, here's what you need to know: the more steps that you have in a process where each step is dependent on the step before it... Well, the more steps that you have, the more likelihood that you have towards failure. So this is how it works. The way probability works is as you start adding these steps or as you start adding these probabilities of success, you have to multiply them.
So let's use a really quick example, let's say that we have a four step process and each of these steps, they're kind of like a 50 50 kind of thing. Right? So 50/50 is going to happen 50/50 it's it's not gonna happen if we have a four step process and we have a 50% probability in each one of these steps when you start multiplying them. So if you look at, you know, 1/2 and then times 1/2 times 1/2, times one over to you get 4, 16, right? You get one out of 16. So in terms of strategy, now, what you can figure out is if you do this process then the likelihood of failure is 15 out of 16 times you will probably fail 15 out of 16 times because you might not be able to get to the end step, you'll only succeed one out of 16 times.
But let's take out one of those steps. So instead of making it a four step process, let's say that you've innovated and you figured out how to get to the same outcome with only three steps, then imagine that we have the same probability at each step. So it's a 50% probability. So step one, step two, step three, you know, 50% times 50% times 50% 2 times two is 44 times two is eight. So it's 1/8. So what we did is we actually doubled our chance of success just by taking out this one step because now our probability of success is 1/8 versus 1/16.
So when you're thinking in terms of strategy, the more steps that you have in order to get to your outcome, the more likely it's going to fail. So where you can start innovating is to figure out how you can get to the same outcome with the least amount of steps as possible. And if you can figure this out, one of the things that we do in my organization is any single step that we have, we ask ourselves is this a revenue generating activity, how does this bring revenue? And if it doesn't bring revenue, we get it out. We try to figure out how to get to revenue without these meaningless steps. This is Robin Copernicus. Boom bam, I'm out.
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