No one taught me how to decide…until now.

From the age of 12 to 14 I was obsessed with the game of chess. I read books on it, made my own chess set at school and competed in the school chess club. My love affair with the game reached its peak at the annual chess competition one year where I made it to the semi-finals.

We played our games during the lunch hour break, giving us time to inhale a sandwich and bang out a game. Early in the semi-final that I was playing in, I took out my opponent’s queen! I could see my opponent visibly shaken by the loss of such an important piece, my optimism soared! As we played on I suggested we pause and resume play the following day. I was in no rush. My opponent on the other hand insisted we continue playing.

With my confidence bubbling over, I agreed. We played on, where my opponent constantly urged me to speed up my moves and progress the game before the lunch bell. As we approached the end of the lunch break my opponent turned the tables and eventually declared check mate! I walked away from that game shocked and defeated, cursing my decision to be so accommodating of my opponent. 

I told this yarn to my wife early on in our relationship and soon after she surprised me with a painting based on the story.

She hadn’t completed the painting yet, but was excited to show me the progress. For some reason the painting was never finished, leaving a ghostly figure of a pawn in the middle of the chess board.

I’ve kept that painting now for over 15 years and it remains in my study, incomplete but a constant reminder of my loss and a valuable lesson. 

You always have a choice around how you make a decision.

How often have you made a hasty decision only to later regret the outcome? Or do you have a habit of dwelling on a decision, gathering endless information which results in either overcomplicating the decision making process or contributing to a lost opportunity?

Decision making is something we do everyday, likely hundreds of times. Some of these decisions are of little consequence, but others have life long implications.

 For most of us, we’ve never been taught how to make good decisions. We’ve just had to figure things out ourselves and suffer the consequences when things don’t work out. 

Surely, there’s a better way?

Decision by design.

I received an invitation from Shane Parrish, the founder of Farnam Street blog/podcast to participate in his latest course ‘Decision by design’. Shane has a strong reputation for exploring ways to improve decision making, so the opportunity to receive hands-on instruction from him was hard to resist!

Over the 12 weeks of the course, Shane Parrish shared the mindset and tools to make better decisions. His lessons included heuristics to assess decisions objectively and act decisively. On completing the course I couldn’t help but feel a greater sense of confidence and clarity around facing decisions both big and small. 

Keys to making better decisions:

It’s my hope that by sharing some of the lessons I’ve learned, you too can make better decisions with greater ease and consistency. This by no means covers all the lessons covered in the course, but these were the ones that stood out for me.

1. Reflect on whether your decision is a one or two way door 

Jeff Bezos has been quoted on how he sees decisions falling into one of two categories. Type 1 and type 2 decisions. 

Photo by Oleksandra Bardash on Unsplash

Bezos describes type 1 decisions as similar to a one way door, you go in and there is no going back. These are the big decisions that have lifelong consequences, like the time you decided to get that tattoo, or to send that emotionally fuelled email.

For a type 2 decision, the door swings both ways. There is an entry and the option to escape. Like changing the price on the product you are selling, or starting a side hustle outside of your regular job. If the outcome of your decision is undesirable, it’s no big deal, you can reverse course, pick up were you started and try a different approach the next time.

To help recognise decision types and ways to best approach them, Parrish introduced ‘The decision matrix’:

Shane Parrish Decision Matrix

The decision matrix is the foundation of all decision making tools as it helps to determine the context you’re operating in, how much effort and what approach you might use to make a particular decision. 

Additionally, the tool helps to decide how much information you might gather, how much time you might take and whether or not you are, in fact, the right person to be making the decision.

The matrix is built around two criteria: consequences and reversibility. When the consequences are high and the ability to change course once the decision is made is low, greater time should be taken in making a decision. Additionally, the decision should be broken down into smaller decisions resulting in less consequential and reversible decisions.

As for those decisions that are consequential and reversible, puting in the effort to gather more evidence can lead to better outcomes. 

For all other decisions (those that are inconsequential) are best delegated to others providing an opportunity for others to build up their experience in making decisions when the stakes are low.

2. Solving the right problem:

All good initiatives should start with one question: ‘what’s the problem we are trying to solve?’

In answering this question, a common issue is that we accept the first problem statement that comes to mind or jump too quickly into solutions. Parrish’s guidance around this is simple:

  • Never accept someone else’s definition of the problem
  • Put a firewall between the problem definition and the solution (i.e. have two distinct and separate conversations around each of these).
  • To get to the real problem, ask: ‘what would have to be true for this problem not to exist?’

3. Preserve your optionality:

To help keep your options open and to sharpen the quality of information that goes into making a decision, Parrish recommends using a few handy tools:

Invert the situation.

Photo by Randy Jacob on Unsplash

Instead of thinking of all the things that could go right, imagine what could go wrong. For product managers, we often do this in our workshops, conducting a ‘pre-mortem’. This involves a thought experiment of considering what could go wrong, all the steps that got us there, and how can we stop this from happening in the first place. 

Shoot bullets before cannonballs.

Another tool to help reduce type 1 decision making is to break down your problem into small, inconsequential and reversible experiments you can run before investing in big, expensive and irreversible actions. This is very much aligned with the principles of agile, and lean practises that encourage decisions of what to build based around the principles of testing out the smallest and highest value generating activity first. 

Prototype 

Similar to the above, prototypes are perfect for creating an environment where it is safe to make decisions that have limited consequences if you fail. In fact, failure is assumed to be part of the process. 

4. Identifying the most important thing:

How many organisations have you worked at were prioritisation is painful, inconsistent, lacking clear decision making criteria? I am baffled that most companies still lack maturity and clear criteria to making decisions that counteract HIPPO syndrome (highest paid person’s opinion).

The more you can use a balance between heart (qualitative) and head (quantitative), the more informed your decision, and likely, the greater the level of commitment to act on the final decision.

Vanishing technique:

This technique is a good one when faced with decisions that are equally desirable. This involves doing a thought experiment by taking away one or a few of the options and then reflect on how you will react or live with the remaining decision(s). 

Although painful at first, this technique creates space to explore alternative scenarios and in the process, often strengthens your commitment to a particular course of action.

5. Anticipate the future:

What can help make a complex decision easier is to work backwards from the desired state (or undesired state) and identify the sequence of steps that will get you there.

This approach has been widely adopted at Amazon using their ‘working backwards press release’ to provide a gut-check for whether or not a new product or idea is worth pursuing. By breaking down the journey to reach a particular end point provides an insightful view of all things that will contribute to a desirable or undesirable outcome and ultimately, inform the type and sequence of decisions you’ll need to make.

6. Going beyond the pros & cons list: Second order thinking

Using second order thinking helps to uncover some not so obvious payoffs or pain points that might occur downstream in making a decision.

I love this technique as it is a great alternative to the traditional ‘pros / cons’ list.

Basically, the technique is based around thinking beyond the immediate consequences of a decision/action. Ask yourself, repeatedly, “and then what?” as you move from first order consequences through to 2nd and 3rd order consequences of your decisions.

Shane Parrish — Farnam Street Blog

First-order thinking typically involves the easy answers. Second-order thinking is often where the magic happens in uncovering unexpected benefits/barriers not immediately apparent when only considering the first order consequences. The famous Stanford marshmallow experiment talks to this well in the context of the trap of instant gratification.

7. Improving the quality of information:

Making a decision based on a lesson learned from something we’ve heard or read can sound great but when applied to reality may not stack up.

Parrish reinforces the fact that using the knowledge of others to make our own decisions can create the illusion of knowledge. Given most lessons we learn are based on someone else’s experience in a particular context, it is likely this advice may not work in all situations.

To combat this, Parrish recommends using a ‘learning loop’ that reinforces the importance of reflecting on the guidance / experience gained by others in combination with our own personal experience. This involves taking our own experience or abstractions of the experience of others and reflect on these with an emphasis on understanding more around the ‘why’ and ‘how’ a decision was made vs. the ‘what’. Parrish then recommends to put this knowledge to action, further building your associative knowledge and references in making future decisions.

To hear more on this, check out a recent interview of Shane Parrish with Rich Roll.

8. Create automatic behaviours:

If any of you have seen the Chernobyl mini-series, you’ll have witnessed how a series of bad decisions culminated in a massive disaster. This is one situation where Parrish’s ‘automatic behaviours’ would have helped to break the chain of bad decisions by introducing automatic circuit breakers. Some of these automatic behaviours include:

  • Tripwires — defining a course of action that is triggered based on negative signs (this is where rules based scenario planning can be helpful).
  • Commander’s intent — before making a decision and enacting it, communicate the objectives, context and limits before you execute. This helps team members to understand the rationale behind a decision (in particular when it is unpopular).
  • Ulysses pact — is based on the story of Ulysses who had his men put wax in their ears so they could not hear his command to change course as they passed through the ’Sirens’ which if heard would drive anyone incapable of rational thought. Similarly, ask yourself, what constraints can you put in place to avoid having to make decisions, especially where your willpower is low.

9. Avoiding stupidity

Some of the worst decisions ever made were influenced by conditions that involved some or a combination of the following things:

  • physical / mental stress
  • distraction
  • rushing (yep, I know this one well!)
  • operating outside of your normal environment
  • information overload
  • lead by an expert/authority figure

If any combination of these are present when making a decision, Parrish recommends to take time out and delay making a decision if possible.

10. The confidence to act:

By far, the greatest effect on making good decisions (in particular for irreversible and consequential ones) is the effect of fear, self-doubt and negativity. For the best of us, these often get in the way of making good decisions. 

Parrish recommends some steps to develop a more disciplined mind to overcome these decision making compromising factors:

  1. Recognise your state of mind. Observe it and name it without embracing it.
  2. Ask yourself if what you are thinking is true. Is it thought or fact? What makes it true? Why might it not be true?
  3. Remind yourself of something you did successfully in a similar situation. Visualise how you made a good decision.
  4. Show yourself it’s true — repeat a similar mindset / approach

Conclusion.

Your product is decisions — Shane Parrish

Parrish has concluded that your success in life is the sum of the decisions you make over your career. With the tools outlined above, you now have something to help turn decision making from something you hope to survive to an activity where you become known to thrive.

A key part of using these tools is to use them consciously and intentionally, taking the time to evaluate your decision making approach so it becomes embedded as part of facing decisions both big and small.

If you’d like to read more on the tools covered in this post, check out some of the articles that sit behind Shane’s course at his Farnam street blog.

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