Decision-Making 1.
Let’s start at the beginning: what are decisions?
Decisions are a choice that you make between two or more options. When you make a decision, you are choosing one option over another. The important thing is that when you make a decision, you experience an opportunity cost. This is the cost of the option that you did not choose. What is interesting is that sometimes you can choose none of the options (i.e., do nothing or do something else completely) or do all the options.
Decisions are made to either overcome current problems, avoid problems that we can foresee coming up in the future, or seize opportunities that will disappear unless we take advantage of them.
Many factors go into making a decision. You may consider your options, the consequences of each option, and your personal preferences. You may also consult with others before making a decision.
Ultimately, the decisions in your life are your responsibility. It is up to you to hone your decision-making skills to ensure you live the life you want. The worst thing you can do is consistently blame external events for everything in your life. We cannot control a lot, and we must exclusively focus on what we can control. I’ve previously written an essay on this, which is worth reading.
Some decisions are easy to make, while others are very difficult. Some decisions are made quickly, while others take longer. Remember that you always have a choice, no matter how long or difficult the decision takes.
Sometimes the choices are not the ones you like, _but they are still choices. _
What kind of choices do you have to make in your life?
Decision-making is important because it allows you to control your life. The choices you make determine the course of your life. If you make poor decisions, you may end up in a bad situation. On the other hand, if you make good decisions, you can improve your life and achieve your goals.
You can improve your decision-making skills by studying decision-making. This is pretty much like any other skill in your life 🙂
Take the time to consider your options, understand the consequences of each option, and consult with others before making a decision. You can also practice making decisions by trying different options, making predictions, and seeing how they work out. The more you practice, the better you will become at making decisions.
It is important to not only judge decisions by their outcome. Sometimes good decisions will have bad outcomes because there is always an element of risk involved, but that does not mean you should have chosen differently based on the information you had at the time. It’s important to build a type of mental model of parallel lives. Imagine if you had 1,000 chances to live your life, you would want to end up in an overall positive state in as many of those lives as possible, thus making decisions that are skewed towards the right outcomes, regardless of what does or doesn’t happen.
For instance, you may have invested your time and money in a good business that was then shut down by the COVID19 pandemic. While things didn’t work out, it does not mean that your original decision to start and run a business was bad, just that the way the cards were dealt out in life meant that it would not survive the significant amount of time that societies went into lockdown. This was certainly not an obviously or easily foreseeable event, and the risk was negligible, and yet it happened.
One important factor in decision-making is to think about both the short-term consequences of your actions as well as the medium and long-term consequences.
We can term these first, second, and third-order consequences. Unfortunately, good decisions often have negative first-order and positive second and third-order consequences. In plain English, this means that you often need to delay gratification to ensure good long-term outcomes.
Many people, myself included, often run away from decision-making. Instead of spending the time to consider our options rationally and train ourselves to become intentional decision-makers, we delay. We don’t make a decision, and then life forces us to make a rash decision. Even not choosing is in itself a decision, and life is not an optional game to play. Instead, we should take an active role in the decision of our lives and build up our ability to master decision-making. This is the definition of leadership…someone who makes decisions!
Many of life’s common problems directly result from bad decision-making. They can be easily avoided if we improve our decision-making and if we have a bias toward making decisions that have desirable second and third-order consequences.
Discipline is the bridge between goals and accomplishments.
Jim Rohn
If you make a bad key decision, this can have a spiral effect, leading to further bad decisions, or at least spending a significant amount undoing and correcting those bad decisions.
This is why life can feel so busy at times, and then we have no time to stop and think, which is required to make better decisions. Is it quite amazing that apart from your starting conditions, your life right now is purely a result of your choosing between various alternative courses of action each day of your life?
Conversely, the better our decision-making, the more these compounds. We start to feel that we have a measure of control and that we build trust in ourselves. This compounds into more time and energy available, and it also provides strong leverage points such as capital, intellectual property, and the ability to lead teams. We think strategically and easily sidestep those common problems that strike so many people.
Good decisions are not just good for you personally, but they resonate across your immediate surroundings, such as friends, family, and even the wider community. I often consider whether I am living a “scalable” life. By this, I mean: what would the world look like if everyone made similar choices to me?
I know that if this was the case, doors could be left unlocked the world over, we wouldn’t need prisons, and so on.
So, we have established that decision-making is an important skill, perhaps the most important skill in our lives, but where do we start? How do we improve our decision-making?
Firstly, we have to be able to understand that there are different types of decisions. I’ve previously written about this, and it’s worth reading this short thought.
The main point is that some decisions are unimportant, and we do not have to spend too much time and mental effort to make those decisions. Other decisions are called “Critical Decisions”, and have long-term effects that resonate throughout our lives long after we make a decision.
An example of a non-critical decision might be which pair of socks to wear today, while an example of a critical decision may be who to marry, where to go to school, or whether to start your own company.
When we talk about studying decision-making and improving our decision-making capabilities, we talk about this second type of decision. They are important because they are consequential, often irreversible, or at least extremely difficult and time-consuming to reverse. This is in contrast to choosing which socks you will wear today, which is inconsequential and easily reversible.
We often have a much easier time remembering the consequential choices in our lives than the inconsequential choices. I can’t remember what shoes I wore on August 15th, 1997, but I do remember choosing which High School I chose to go to.
I want to highlight one caveat here, which is about the small decisions we make every day that can have a profound effect over long periods. Often, we call these our habits. What you have for breakfast today, or whether you have it all, may not seem to be a very consequential choice. But, this is a choice that you will repeat every day, thousands of times, and is part of what makes up a healthy or unhealthy life. This _is_ a consequential decision, but it is also very reversible. If you’ve been eating unhealthy breakfasts, you can easily stop doing that; each day is an opportunity to change these habits.
Each action that we take daily is a vote. You are voting on the likely direction of your life. If you vote carefully and thoughtfully, the outcome is more certain. If you do not think about your votes, it’s easy to let life pass you by without ever really living.
Making good decisions is a habit, like any other habit. The more that we practice it, the better we become at it. And just like any other habit, it starts with a choice. So, the next time you have to decide, large or small, remember that you are voting on the likely direction of your life. Choose wisely!
We are what we repeatedly do. Excellence, then, is not an act, but a habit.
Aristotle
This quote underscores the importance of making good decisions and forming good habits. We become better decision-makers by making good decisions and by forming good habits.
A good analogy for the very important decisions in our lives is the game of dominos. Critical Decisions are like the lead dominos; once you make that decision and let the domino fall, many other dominos will automatically fall as well, so a lot of decisions will also be almost automatic.
In the book, The First 90 Days, Michael Watkins talks about the idea of lead dominoes in the context of career transitions. When you take on a new job or receive a promotion, there are usually a lot of other decisions that need to be made very quickly. You might have to decide whether to relocate, what kind of housing to live in, what school your children will attend, and so on.
Watkins advises that you take the time to understand which of these decisions are lead dominos, because if you get those right, many of the other decisions will fall into place much more easily.
So, when we talk about making better decisions, we ensure that we get the lead dominoes right. We want to ensure that we are not wasting time on inconsequential choices, and we want to be extra careful and precise regarding the critical choices in our lives.
For instance, if you make decisions that enable you to have a well-paid career, many other problems will simply disappear. How to put food on the table, meet your monthly obligations, and so on. These will automatically be solved by the fact that you are earning enough each month through your career choice.
If you make a bad career choice (or, as often is the case, fail to make a choice), you may end up both with the career problem and all the other problems that stem from the lack of money that a bad career choice gives you.
This is why focusing on Critical Decisions is the best place to start. Of course, smaller and less consequential decisions can also benefit from good decision-making skills. Still, you want to train yourself with some more important problems first, where good decisions will make a difference.
The ideal scenario is that you eventually have many years of compounding good decision-making. Then, you find that you need to make fewer and fewer decisions, as most areas of your life are taken care of. Problems that used to exist simply no longer appear. You build a set of strong principles and values, and so there is often a clear answer to whatever life may throw at you.
There is the concept of unsung heroes. For instance, the people in various government departments worldwide have fought for changes that prevent deaths but are never honored for that fact. Imagine if someone had managed, against all odds, to pass unpopular legislation to reinforce cockpit doors on commercial airliners. This would add cost to an industry that already has wafer-thin profit margins, and because there have been few major terrorist accidents involving airplanes, it would have seemed overzealous. Imagine if they had made it happen, and by September 10th, 2001, all commercial airlines had reinforced cockpit doors that could simply not be opened from the outside if the pilot did not want to let you in.
Thousands of lives would have been saved the next day. Still, likely we would not even know about it, and the unsung heroes may have retired years later thinking that they were failures because they didn’t achieve much — their decisions didn’t lead to extraordinary outcomes.
It is important to remember that not all decisions will lead to obvious and immediate results, but that does not mean that they were wrong decisions. In hindsight, we can often see how good or bad a decision was. This is why it is important to be clear about your principles and values, as this will give you a clear framework for making decisions, even if the outcome is not immediately apparent.
Many people have made great decisions but have not been recognized for them. This doesn’t mean that their decision was wrong, simply that history has not yet had the chance to catch up to them. So, don’t worry too much about making a good decision that will have bad outcomes — focus on making good decisions and trust that good decisions will lead to good outcomes over time.
So, let’s get back to getting started — I went on a slight tangent here.
First, pick a decision in your life that is both highly consequential and difficult or impossible to reverse. This will be the decision you will use as the platform to improve your decision-making skills.
Take a piece of paper, a text document, whatever. Start writing in free form about the problem. Take 30 minutes, write until you get bored, until you find yourself frustrated, repeating yourself. Good — now keep going. Find the smaller decisions that make up the larger decisions. If you look hard enough, you will normally find dozens of these smaller decisions that make up the larger decisions.
Some of these smaller decisions may be philosophical, so you will need to use your judgment to make a decision. Other decisions may require more precise skills, like estimation or risk analysis. You will want to get better at both of these types of decision-making.
For instance, if you are struggling to decide where to live (something that I am going through right now!), you may want to break that down and decide what your values are concerning this decision. How important is nature? How important is a thriving economy? How important is it that the local population speaks English? And so on.
It is fine if you don’t have an answer to all the subdivisions; the key is to get them listed. Now you are starting to know what you don’t know, while previously, you didn’t know what you didn’t know. Progress!
Next up, take all the smaller decisions, and see if any of them are _not_ consequential and irreversible. Hopefully, you will find that quite a few of the smaller decisions fit into the quadrant of inconsequential and irreversible, and so you can tackle those first, as they are the easiest ones to decide. Now, you are building a framework and gathering more information before making that big decision.
Much like Julius Caesar crossing the Rubicon with his army, triggering a civil war and the eventual fall of the Roman Republic. He had spent time considering his various options, but there was no going back once he committed. As he is reported to have said:
The die is cast.
Make sure that the big decision you are about to make is something you can live with, regardless of the outcome. That is, don’t put all your eggs in one basket — if the decision does not work out, you should still be okay.
If you can’t think of any other subdivisions, then it is time to look at the evidence. What does the literature say about this decision? Are there any experts that you can talk to? Any first-hand accounts from people who have made a similar decision?
Gather as much evidence as possible, and try to be as systematic as possible. This is where many people get stuck — they either gather too little evidence or get lost in an information overload and can’t make a decision.
A more modern analogy is the use of Human-Centric Design (HCD) principles when creating digital products, which I have done a lot in my work at Mäd and as Senior Product Manager at the UNDP.
One of the core ideas of HCD is that you want to try and gather useful feedback from end-users as early as possible. So, we build cheap, quick, and low-quality prototypes to test out with the target audience to better understand the decision to commit to what is normally an expensive software project.
Applying the same concept to our daily lives, we can use this quadrant of inconsequential and irreversible decisions to quickly gain useful feedback that can help us make better decisions in the future.
So, what are some examples of these inconsequential and reversible decisions?
- Getting a haircut
- Wearing a certain color shirt
- Taking a different route to work
- Eating at a new restaurant
- Going for a run
All of these decisions are inconsequential in the grand scheme of things, and they are also irreversible. Once you have made the decision, there is no going back. And so, if you can get into the habit of making these types of decisions quickly and efficiently, you will be setting yourself up for success when it comes to making those big, consequential, and irreversible decisions.
The key here is not to agonize over the small decisions but to use them as opportunities to practice your decision-making skills. And so, the next time you struggle to make a decision, ask yourself if it is consequential and irreversible. If it is, take your time and make sure you are as well-informed as possible. But if it is not, then go ahead and make the decision quickly, without overthinking it.
This may seem small, but trust me, it can make a big difference in the long run.
So, start with the easiest sub-decisions you can find, and work through those first, building up a clearer and clearer picture of the landscape of answers, the far bigger and more important main decision.
And always keep in mind that even the best decision-makers only get it right around 60% – 70% of the time, and that is good enough to get the odds on your side. The key is to learn from your mistakes so that you can get better and better over time.
In the end, any decisions you make answer one key question:
What do I want my future to look like?
This was part 1; you can continue reading part 2 here.
