Good Morning edwardlorilla1986.paxforex@blogger.com,
What’s the one thing we’re constantly doing, even without realising it? You’ve done it dozens of times before ending up reading this edition of the First Principles newsletter.
No, I’m not talking about breathing. But decision-making.
The average adult is estimated to make tens of thousands of decisions each day. The last one you took was to click on my email in your inbox.
Of course, not all those decisions are worthy of reflection or analysis. In fact, the vast majority are made subconsciously on “automatic” mode to avoid overloading ourselves.
But there are a handful of key decisions we make each day that matter. The choices we make for those end up determining and shaping not just our own futures, but over the years, anywhere from dozens to hundreds of others.
And if you’re a leader whose decisions shape the policies and strategies of teams, organisations, or countries, then your decisions will impact an exponentially higher number of other human beings.
That is why better decision-making is such a critical aspect of leadership.
Welcome to the fourth edition of the First Principles newsletter, a weekly exploration into powerful and often counterintuitive themes around leadership, as practised by some of India’s best-known founders and CEOs.
I’m back after an annual family vacation that has left me rested and renewed to make better decisions. I’m thrilled to be back in your inbox this Sunday, and thankful for the privilege of being read by you.
For this edition, I decided to speak to Ananth Narayanan, the founder and CEO of Mensa Brands, a “global tech-led house of brands” (his words) that became India’s youngest “unicorn” when it took just six months to reach the coveted US$1-billion valuation mark.
We spoke over the phone on a Saturday morning after cracking jokes about how parents (of children and pets) don’t really know what late mornings are, because you just get accustomed to waking up early. With three kids and two dogs compared to one of each for me, I told him he was operating at a much more advanced level than I was.
I then asked Ananth what would be the First Principle he used most often when confronted with significant decisions?
“This is going to sound counterintuitive,” he said, “but the best decisions are not logical.”
Because then they’d sort of be obvious, and hence easy, and hence more likely to lead to paths taken by others?
Yes, he replied. “We have to learn to trust our instinct and gut.”
I asked him for an example.
In October 2021, roughly six months after starting up Mensa Brands, Ananth decided to acquire a menswear brand called Dennis Lingo. “When we saw Dennis Lingo, it made no sense. Nothing on the surface seemed unique about it. And it operated in a very crowded market. But I knew there was something.”
The funny thing about instinctive or gut-driven decisions is that they’re hard to analyse or explain (else, they would be more logical and objective). But still, with the benefit of nearly two years of hindsight, how would Ananth reflect on his gut decision to acquire Dennis Lingo? How would he interrogate his own decision?
Rationalising gut-decisions with the benefit of hindsight is a fraught task. Because we can imprint them with a retrofitted logic that adds up. This is something we should always remember.
But that shouldn’t hold us back from reflecting on our own behaviour and decisions.
“With the benefit of hindsight rationalisation, I would say it was the customer experience,” replied Ananth.
What did that mean?
“Dennis Lingo’s products were loved by customers more than its peers’ products,” he said.
How did he spot that?
“Through its returns rate. Compared to 33-37% for the industry, Dennis Lingo’s was in the mid-20s,” said Ananth.
If fewer customers returned their Dennis Lingo apparel after purchase, it meant the brand had a stronger understanding of, and connect with, its customers.
Ananth says Mensa has managed to increase Dennis Lingo’s turnover six-fold in less than two years. Thus validating his initial gut decision.
For a deeper dive into Ananth’s career journey (McKinsey consultant to Myntra CEO to Mensa Brands founder), his parenting style, decision-making, and insistence on calling Mensa Brands a “global tech-led house of brands”, I’d urge you to listen to episode 5 of the First Principles podcast (if you already haven’t).
Learnability, curiosity, and brand building; Ex-Myntra CEO and Mensa Brands founder Ananth Narayanan gets candid | 6 October, 2022
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