In 1955, the owner of a small toy company in Southern California received a phone call from a television studio executive. The executive told the company's owner, Ruth, about a new children's show his network was launching. He explained why Ruth's company would make a great sponsor for the show, and said all he needed from her was a 52-week commitment at a cost of $500,000. Ruth conceded that it could be a great opportunity, but asked for a chance to think about it before officially saying “yes.”

After hanging up the phone, she went to talk it over with her husband and co-owner Elliot. What the television executive didn't know is that $500,000 was equivalent to her and Elliot's entire net worth at the time. On top of that, it was also 1955, just a short few years after the invention of TV started going mainstream. Television advertising was still in its infancy, and it was literally unheard of in the toy industry. No toy company in the world advertised at all outside of the last few months of the calendar year, let alone on television: which is all to say, this was a risky decision. There was no historical data or benchmarking they could tap into. The future was not just uncertain, it was unknowable.

But it also presented a big opportunity. Even back then TV appeared to be changing consumer behavior, and other industries seemed to be getting on board with it. It was like the Internet in 1995—it was changing things, but exactly how it would change things, or what you should do to get in front of that change, was anybody's guess. Some people would get left behind, others would place the wrong bets, and a lucky few would be catapulted to breakout success.

All these risks and possibilities swirled around Ruth and Elliot when they sat down to discuss the sponsorship. The first thing they did was to identify their focal point. They looked out over the landscape of possibilities in an attempt to define the area that would make the biggest impact on their success. A sober look at all the aspects of their business led them to conclude that what made them successful wasn't the efficiency of their inventory and distribution processes, or their customer service, or their relationships with retailers, or even the quality of their products.

The biggest contributor to their success was their marketing ability. That was what I call their “pulse”—the lifeblood of their success. Their competitors' pulse was likely something other than marketing. But for Ruth and Elliot, marketing was the secret to their success at that moment in time. So they had to conclude that if they were going to take a big risk, it should at least be a risk that allowed them to leverage their greatest strength. Since advertising was one tactic that fell under the umbrella of marketing, it was at least a risk that moved them in the right direction.

Next they walked down the hall to the office of their CFO, Yas Yashida. “What is your take on this, Yas?” they asked Yashida.

“Given our current finances,” he replied, “if we do this sponsorship and it doesn't significantly increase sales, we won't be broke. But we will be very badly bent.” So now they understood the risks and implications of each option.

Lastly, they had to decide. Just like Chris Albrecht had to do with The Sopranos, they simply had to take a step into the unknown with no guarantees of success and massive uncertainty.

Forty-five minutes after she hung up the phone with the television executive, Ruth called him back and said, “Okay, we'll do it.”

As luck would have it, that TV show turned out to be The Mickey Mouse Club, and Ruth Handler's little toy company would eventually become the toy giant Mattel. A few years later, Ruth Handler introduced the world to a blonde bombshell named Barbie with plastic limbs and questionable anatomic dimensions. The rest is toy history.¹

If we reverse engineer Ruth Handler's bold move, we'll see that it happened in three parts.

The first thing she did after hanging up the phone was to “check her pulse.” She went and found her co-owner/husband, Elliot to determine that marketing was their focal point—the lever they could pull to most significantly impact their near-term success.

Next Ruth and Elliot “consulted their anti-you.” They marched down the hall to the office of their CFO—someone who almost always saw things from a different perspective than the risk-taking entrepreneurs did. They weren't deferring the decision to him. They were simply looking for his take on the situation. They were taking advantage of an alternative frame of reference.

Finally, they made the decision. In spite of the uncertainty, Ruth reached a conclusion and made a judgment call with the help of her team. The act of deciding has been dramatically and unnecessarily overcomplicated in recent years. Yes, there were a lot of factors for her to consider when making an investment of this size. Yes, there were any number of ways she could be led astray by irrational quirks of the human mind. All of these considerations are real and valid. But considerations can become crutches. Ruth kicked aside her crutches and made a call.

But don't be confused. This isn't a book about risk taking or about why bold is beautiful. This is a book about dealing with change quickly and effectively. And the three steps Ruth took to make her decision provide us with a highly useful checklist for reaching decisions when you really don't know what's going to happen. But the conclusion doesn't always need to be bold and daring. This would have been a good decision even if she had turned down the offer— because she used a clear process to arrive at her conclusion.

Chris Albrecht at HBO followed the same process when he decided to pursue The Sopranos. He thought about his strategic insight that “compelling characters” could not only pave the way to a bright future for his division, but for HBO as an organization. Compelling characters became Albrecht's pulse in the way marketing ability was Ruth Handler's pulse.

Every step of the way Albrecht consulted Carolyn Strauss, whom he regarded as the perfect partner for him, since they approached things from such different perspectives. While they saw eye to eye on the strategy, they approached each decision from opposing vantage points and personalities.

Finally, Albrecht simply had to make the call about whether or not to greenlight The Sopranos. Even though it aligned with the direction of his compelling characters strategy, and even though Strauss felt like it was probably the correct turn to make, there was no guarantee that The Sopranos would find an audience, let alone become a breakout hit that launched a revolution in television.

If you look closely at all the stories in this book, you'll see this three-step process replaying itself over and over again. Leaders and their teams can use that process to decide which new direction to pursue, as well as for making all those execution decisions before, during, and after a new plan is announced.

If you're a card-carrying member of the Decision Pulse fan club, you are probably already familiar with this three-step process. Regardless of whether you're a neophyte or a veteran, it's worth reviewing again here.

The process starts with checking your pulse. Most often your pulse is going to be the answer to the question: What is the one thing we can focus on this year that will make the most disproportionate impact on our success? For Ruth Handler it was “leverage our marketing abilities.” For Chris Albrecht it was “find compelling characters.” For Tomas Gomez it was “maximize capacity.” For Jonathan Mburu it was “stabilize the IT infrastructure.” Whatever your answer to that question, that is ground zero for every decision your team makes this year or until it's time to switch directions again.

In the next chapter, we'll look a little closer at step two.