Make Better Decisions This Year
“Would you like to write an article to be published on Christmas Eve, Runar?” “Yes!”, I said. “Future-Runar can handle anything.” But was that a good decision? Read on and judge for yourself. Anyway, use the method I talk about below and make better decisions than past-Runar did.
As humans, we make decisions and choices all the time. Most choices are simple, and a select few are actually important.
For the simple ones, we have quick techniques like subconscious, gut feeling, and mental shortcuts, mixed with a bit of good old “I don’t care how it turns out” and luck. Such choices can be made quickly, usually turn out just fine, and life goes on. Fortunately.
The distinction between important and unimportant choices is primarily that we actually care about the outcome, and the consequences are significant or hard to reverse. For these important decisions, we want an effect, but the path there can be complex and unclear.
So what is a good decision-making process for important choices?
Introducing the decision ladder! Or actually, a great book written by Jan-Ole Hesselberg and Reidunnn Lognvik Reinholdt called “Better Decisions”. In the book, they describe just such a method for making better decisions. It doesn’t have to take a long time, but it contains elements that are useful to include in the process to ensure that the decision is based on what you know, not what you think.
The rest of the article explains the method, and I start with a picture of the ladder (as a repetition for new readers):
7 Small Steps to Success
1. Importance-Time (IT) Score
We start by assessing the importance and time criticality of the choice at hand. If the outcome is unimportant, or we are extremely short on time, the advice is simple: “Just do it!” If we have more time and the choice is crucial, comes a bit harder advice: “Think!” and that’s what the ladder is here to help us with. Are you short on time and the choice is a matter of life and death? “Poor you…”, but fortunately, this option occurs less frequently than the other two for most people.
2. Generate Decision Alternatives
Should be called the green zone. This is where you phone-a-friend combined with brainstorming. We want to come up with as many alternative potential decisions as possible, let’s call them hypotheses. These will be assessed, falsified, and compared further down the ladder. We will never get enough hypotheses to completely cover reality, but we get a better map. And to our advantage: avoiding idiocy is easier than being brilliant. We don’t need a perfect decision for the method to have value, it just needs to be better.
3. Gather Information
Here we will gather the information to falsify the hypotheses from the previous point. Not all information carries the same weight, so weigh the sources carefully. Useful questions might include:
- “What information do I not want to find?”
- “What information is too readily available?”
- “What similar decisions have I or others made before?”
- “What are others doing that can affect your situation?”
- “What do actual experts say about this?”
4. Test the Information
This is a safety valve with a check of the information we have dug up to ensure that we don’t make decisions on the wrong basis. Did we find opinions instead of facts, outright misinformation, or irrelevant information? Strip it away. And the rest goes to:
5. Stress Test
If point 4 was an objective check and a tribute to the rational in humans, this is an acknowledgment that we are still just humans. It means that we all fall into thinking traps. Especially when we strongly want something to be true. That’s why we take the penalty lap now.
Wikipedia has a list of 188 cognitive biases, such as confirmation bias, loss aversion, and anchoring, and we don’t have time to check the remaining alternatives against all of them, but we make an effort to really be left with the cream of the alternatives before we finally get to:
Finally, the red zone! Here everything is weighed against each other based on the best knowledge we have. Many will become fewer. Useful tips here are to think about second-order effects to hopefully be left with alternatives that actually have the outcome we want. Don’t be Mao; the ecosystem around the decision can be complex.
Fortunately, just assuming that we are wrong, and considering why that might be the case, has been shown to increase the precision of evaluations. Don’t own your decision alternatives. They don’t define you. They are hypotheses to be tested, and if they don’t pass the test, they should be discarded.
7. Decide and Evaluate
The choice must be made. We remember what the goal behind the decision was and make the choice. If we can also say something about how confident we are in achieving the goal and why we settled on this choice, there’s a good chance we’re sitting on a better decision than we would have otherwise.
Two last pieces of advice on the way:
- All else being equal, a faster decision is better than a slow one. Don’t fall into the analysis trap.
- Reflect on how the decision went. A central part of making better decisions is learning from past decisions.
What is important to you in your personal and professional life? First, reflect on that, and then use the decision ladder to make more thoughtful decisions where the outcome is critical for you. Unfortunately, things can still go wrong even if we do everything right, but at least we made a little more effort than just using experience-based intuition. We thought, reflected on alternatives, and were open to making a good decision. Not just an easy one for us.