When it comes to decision making, we all turns towards try and tested methods like cost and benefit analysis and making a pros-cons list. These methods do work in the past but now it is becoming tough to make a pros-cons list for any decision especially when we have 175 types of salads to pick from and hundreds of shampoos to choose from. We are living in an era where number of choices are becoming exponential. We can’t be thorough enough to list down all the pros and cons of each item and then give them weightage to take decision.
“Our decisions shaped our destiny”, well said by Tony Robbins. It is true that our life is a product of our day-to-day decisions like how to spend time, what to wear and our once-in-a-lifetime decisions like which religion to practice and which life partner to choose. Most of us don’t have enough time to think through things so we take most of our decision on default mode – what sounds true in the moment. This default mode strategy of taking decision can work for small and inconsequential decisions but it will not work for important decisions of life.
As I said in 10 Principles of Time Management, there are hundreds of methods and strategies for everything but very few principles. I am going to discuss those few principles of decision making in this article not strategies and techniques. I divided these principles in four categories. First three principles fall into a category of “Pre Decision Making”. Next three will be in category of “During Decision Making”. Next three will be fit in third category of “After Decision Making”. Last principle is category in its own because of its importance.
Principle # 1: Decision is not about Choosing from the alternatives, it is about cutting the alternatives.
“Learning to choose is hard. Learning to choose well is harder. And learning to choose well in a world of unlimited possibilities is harder still, perhaps too hard.”
Berry Schwartz
1.1 There is a famous and widely accepted definition of decision is to list down the alternative, give them weightage and then decide on best one. But is it possible or feasible for you to apply that methods while taking day-to-day decisions of your life? First, we don’t have enough time to apply this method on every decision. Second, it requires serious amount of cognitive load and ability to apply this method to every decision.
1.2 Whenever you need to decide, always remember the fact that decision is not about choosing from the alternatives, it is about cutting the alternatives and pick the one which left at the end. Word decision comes from Latin means “To Cut” or “To Kill”.
1.3 It might sound same that choosing from alternatives and cutting the alternatives but it is not same. When you choose anything from many options, other options still available to choose from. But when you cut and pick the last one left, now you don’t have any option left. You have to commit deep on that last option.
1.4 This principle sets the foundation for rest of the principles mentioned below.
1.5 Choosing from alternatives is becoming tougher and tougher in this age of abundance where we have hundreds of choices even for simplest of things.
1.6 Cutting the alternatives require same amount of mental work and maths as choosing but the end commitment is different in both cases. When you cut 9 alternatives out of 10, you have no way left to go back. You burned all your ships for the final option.
1.7 Cutting alternatives is also a very useful framework to make life simple and better.
1.8 Cutting alternatives make things simple because it is based on “Subtraction”. On contrary, choosing from alternative make things even messy because it is based on “Addition” (and in some cases on “multiplication).
1.9 Less things you have to commit with, better your focus and life quality will be.
1.10 What’s your current decision making criteria: “Choosing from alternatives” or “Cutting the alternative”?
Principle # 2: You don’t need to decide for everything.
“There are so many things of which a wise man might wish to be ignorant.”
Ralph Waldo Emerson
2.1 As we discussed above, decision is about cutting the alternatives, means it requires quite deeper level of commitment and high level thinking. Now question is, do we need this level of commitment for everything we face in our lives? We don’t.
2.2 “You don’t need to decide for everything” is a statement that can take away lots of burden from your shoulder. It can release you from the pressure of taking too many decisions daily and taking too much of a cognitive load.
2.3 Suppose currently you are trying to decide which career path suits you. Try to avoid deciding on it right now. Just experiment with different options and try different alternatives few years. You need deep knowledge, which you will get after spending time, about each option before you commit to anyone of it.
2.4 We humans are certainty seeking machines. We want to avoid chaos as much as we can. That is why we start making decisions on everything we face. We don’t want to leave things open.
2.5 But what you need is to stay open minded. Definitely, it is tough because when too many options available in your brain, you might feel load of processing those options. But it is good to certain extent because it help you experience many things.
2.6 Use your decision making ability as a premium resource only for premium concerns of life. You need to decide when choosing a life partner because it is a life-changing event but you don’t need decision when choosing a shampoo. Just try few and good option will appear.
2.7 This point is crucial because you need to remember that you need energy for crucial decisions of life. You need to save the energy instead of wasting it on every concern you face.
2.8 Want to become better at decision making? Improve your mental models about how the world and people works. How can you improve your mental models? Try as many things as you can to get deeper level of knowledge. How can you try as many things as you can, if you start taking decisions on everything? So, stay open minded for most of things in life.
2.9 Remember, seeking certainty is an addiction. More decisions you will take, more you want to stay committed to those decision. More commitments you have to fulfill, more pressurized life you will have. More pressure you will have, less you will try to learn something new. It is kind of a vicious loop of mediocrity.
2.10 What is one things you are trying to decide on right now? Do you really need to make decision for it or you need to just stay open minded for time being?
Principle# 3: Understand the difference between decision, probability, choice, forecasting and bet.
“Success is simple. Do what’s right, the right way, at the right time.”
Arnold H. Glasow
3.1 Decision is about cutting available options until the best one left.
3.2 Probability is about chances of occurrence of anything.
3.3 Probability helps us in forecasting and betting. It helps us organizing the randomness of life.
3.4 Choice is bit of an opposite of decision. Choice is about choosing from the available option. You can change the choice by picking something else later on.
3.5 Only difference between choice and decision is level and intensity of commitment. Higher the level of commitment and intensity, more closer it will be to a decision and vice versa.
3.6 Forecasting is about predicting or estimating something that can happen in future.
3.7 It sound same as probability but in probability, there is only chance of occurrence of anything but in forecasting, you actually measure those chances to get mathematical precision.
3.8 Bet is also a kind of prediction just like forecasting but it mostly depends on personal beliefs and instinct instead of mathematical precision and accuracy.
3.9 In short, our bets are only as good as our beliefs are. Good news is that we can learn, polish and enhance our belief systems in a way that we can start seeing the world in a real and accurate manner. More accurate beliefs we have, better the bets will be.
3.10 These all are quite close to each other so, chances are higher that currently you might be using one of these on the name of decision. What one method out of the above five you used most on daily basis?
Principle # 4: While taking decision, consider the fact that other factors are not constant.
“Life is what happens to us while we are making other plans.”
Allen Saunders
4.1 One key reason of taking a bad decision is to take decision on the assumption that everything else will remains constant while you are taking decision.
4.2 When we decide, we put in the efforts to think things thoroughly. We try to figure out every hidden angle and plan for every possible outcome. What we forget is that when we are planning, world is also moving. It means more time we take to decide, more the world around us get changed, more the chances are that our decision is flawed.
4.3 Every decision is dependent on set of assumptions.
4.4 If those assumptions are well-tested, chances will be that our decision will be accurate. Less tested assumptions will destroy the whole decision.
4.5 There are three flawed assumptions people have subconsciously while taking decision. First, they think they know everything. Second, they think that everything works according to plan in linear and step by step manner. Third, they think that they will only get the outcome they are searching for.
4.6 If you are considering to take decision regarding your career, first I will recommend you to try as many things as you can. But if you already tried many options then I will recommend that you must move fast and decide because world around you might not be same in few days and you might miss the whole point of being at right place at right time.
4.7 There are very few decisions on which our life depends. It means we don’t need to be absolutely correct every time we take decision. This realization helps us in saving our time from searching every single piece of information out there before we make decision.
4.8 If other factors are not constant, then best way to take decision is to cut alternatives quickly by using mental models you have. Then, adjust as you go on. World will keep changing so does your decision will keep shaping itself.
4.9 Wrong way of taking a decision is to expect that decision will remains as it is even after years will pass by. Your decision must get improved shape as time goes by and factors keeps on changing.
4.10 Are you currently trying to take decision on any of flawed assumption mentioned above?
Principle # 5: While taking decision, try to stay wrong less than right more.
“Forewarned is Forearmed.”
Roman Proverb
5.1 Consistently being right more often is hard in a complex and ever evolving world we are living in. Instead of trying to stay right more, what you need is to being wrong less.
5.2 It might looks the same but it is not the same. Trying too be right all the time can push you in over-optimistic and highly rash strategies. By being wrong less, you can stay defensive and cautious that can help you in laying the right foundation.
5.3 Inaction is what we mostly avoid as human beings. We don’t want to stay passive and bored. But when we try to act all the time, we make unforced errors. We try to invent things where there is no need to reinvent the wheel. Staying passive, bored and okay with inaction sometimes works as an advantage. It helps you to avoid unnecessary errors.
5.4 This strategy works in every area of life. Suppose you want to invest money to earn profit. What you need early on to lay a good foundation is to build a strategy through which you don’t lose money for few years. Suppose you have one million to invest. What if, you invest in a plan where you don’t earn for next three years but you don’t lose money either? This option looks stupid to many people but it is not a bad tactic. You win because you don’t lose money in three years despite of fragile economic conditions. Yes, you can go to earn more later on but first, you need to survive.
5.5 You can apply the same tactic to your career too. Instead of trying to earn big name or trying to accomplish something impressive, you need to do basic stuff well at the start of your career to gain some momentum.
5.6 Staying pessimist and defensive early on is not a weakness but part of a plan in a long-run.
5.7 Suppose you are a product developer. You can use this strategy by making MVP – Minimum Viable Product. Instead of building complete product, you just try to build a prototype to test. Once you get feedback and response from audience, you can build it further. But there is no advantage in going all in too early.
5.8 While taking decision, stick to basic foundational principles instead of trying to gather more information.
5.9 In short, Keep it simple, Stupid. (Kiss)
5.10 What is the minimum possible level of commitment you can make in current decision you are trying to take? Try to approach your current decision with a mindset of avoiding loss instead of trying to gain out of it.
Principle # 6: Less Variables = Better Decision.
“The wisdom of life consists in the elimination of non-essentials.”
Yutang
6.1 After considering the fact that world is constantly changing and try to be wrong less instead of right more, you need to remember that less variables means better decision.
6.2 Every decision is a set of two types of pieces: Fixed pieces and variables. Fixed pieces are those part of decisions that will not change and will stay as it is. These are easy to predict and easy to decide on. Variables are those pieces that can constantly shift the position and change over time.
6.3 To make a better decision, what you need is to add more fixed pieces and less variables.
6.4 More fixed pieces means your decision will rank higher in mathematical precision. More variables means your decision will rank higher on risk of being wrong.
6.5 Sometimes in life you will face a decision that have more variables than you want. In those high-risk decision, you must hold on to principle of being wrong less than try to be right more.
6.6 Higher the number of fixed pieces in your decision, more the aggressive you can be.
6.7 Great decision makers are master of transforming variable pieces into fixed pieces by using transferring the risk technique. What does that means? Suppose, you need to take high-risk decision. You will take 100% of risk, if you take the decision alone. But what if you have a strategic partner or alliance with someone on the same decision? Now both parties have 50% of risk. You can too share the risk by collaborating with other people. Yes, you have to share the reward too later on but as per the above principle of being wrong less, this is the most important move you can make.
6.8 Instead of approaching a decision as a one complete entity, dividing it into pieces can help you in figuring out what goes wrong later on. Suppose your decision goes wrong in future. It will be easy for you to tag the whole decision as a “Wrong Decision” but what you need to find out which variable goes wrong. There might a chance that only one variable goes wrong instead of whole decision.
6.9 You can easily divide your decision into pieces by using principle # 3. You need to find out how many choices are in your current decision, how many probabilities you are dealing with, how many bets you are going to make and how much forecasting you need.
6.10 List down the fixed and variable pieces of your current decision. How can you deal with variable pieces? How can you turn variable pieces into fixed ones?
Principle # 7: Beware the Three After Shocks of any Decision: Sunk Cost, Trade-offs, and Cognitive Dissonance.
“Remorse is adding to the first act of stupidity a second.”
Nietzsche
7.1 If decision is as simple and methodical as I discussed in above principles, then why not people take decisions so often? Why people try to avoid it? Because they want to avoid the after shocks of any decisions. There are three after shocks every decision have: Sunk Cost, Trade-Offs, and Cognitive Dissonance.
7.2 Sunk Cost is the most important and highly crucial after shock you need to deal with after you take any decision. Every decision require a commitment from you regarding resources you are going to use for the decision. In short, every decision need time, energy and other resources i.e. financial investment from you.
7.3 Sunk Cost simply means that you need to remember: once you commit any resource in a decision, it is gone. Most people fell into a trap of sunk cost when they keep investing resources in wrong decisions not for decision itself but because they think they already invest so much into it. To be a master decision maker, you need to avoid this tendency as much as you can. Invest resources in decision for the sake of decision not because of past investments of resources.
7.4 Another after shock people feel after taking decision is to deal with trade-offs they make during the decision. As I said, decision is about cutting the alternatives until the best one stay to be picked. Alternatives you cut from the equation will be counted as a trade-off you make during the decision.
7.5 To avoid the shocks of trade-off, you need to make sure that you pick the best option available and cut the average ones not the other way around.
7.6 Toughest trade-off you will ever make is a choice between picking up the good option versus great option. You need to neglect the good ones to reach to the great one.
7.7 Third after shock is cognitive dissonance which simple means feeling dissatisfied the decision you take after you take it. We all experience the feeling of cognitive dissonance while shopping. We pick the best possible item for us and after purchasing it, we suddenly start finding the flaws in the item. Welcome to cognitive dissonance.
7.8 Best way to deal with cognitive dissonance is to remove regret from the decisions. How do you do that? If you start feeling regret after the decision, list down the regrets. You will find out that the regrets you are feeling after decision is mostly not about the decision you already taken but related to something else. For example, I purchased an item worth of Rs. 3000. After purchasing it, I started feeling cognitive dissonance and regret. I list down the regret and find out that I am regretting the decision because of price is too high. I need to remind myself that I pay a price for a product I purchased worth it. I am feeling regret not because of product I purchased but because of my overall financial situation in which this decision is just a small piece.
7.9 Best way to counter all three after shocks is to use principle # 2: You don’t need to decide for everything. These three shocks will only appear when you find out that you are now highly committed to option you pick. Why feeling these shocks on simple things. So, don’t decide and keep experimenting with small things to avoid the shocks.
7.10 One key way to avoid these shocks is to set up the priority factor. If you take every decision by considering money then money will be your priority factor. After figuring out the priority factor, you need to set up a “Decision-Limit” on it. For example, you set Rs. 3000 as your “Decision-Limit” then you will have to take decision on those things involved more than Rs. 3000 commitment. Anything requires less than Rs. 3000 commitment will go into bucket of experimentation.
Principle # 8: When reflecting, treat “Results” and “Decisions” as separate entity.
“What makes a decision great is not that it has a great outcome. A great decision is the result of a good process.”
Annie Duke
8.1 Every decision leads to an outcome or result, good or bad. Sometimes you take a right decision but it ends up in a bad outcome. Sometimes you get good outcome out of a bad decision.
8.2 You need to avoid what they called in Poker, “Resulting”. It is a tendency to measure how good or bad a decision was through the result it achieve. It is a wrong way to measure or reflect on any decision.
8.3 Here is a test for checking your tendency of “Resulting”. Take a moment to imagine your best decisions in the last year. Now take a moment to imagine your worst decisions. I am willing to bet that you picked “best results” as your “best decisions”. In this case, you are falling victim to resulting tendency.
8.4 Quality of our life depends on our decisions plus luck. There are times when our bad decisions results in great outcomes. It was our luck that works in our favor at that time.
8.5 Why we take credit of great outcomes when even when it was just a stroke of luck? Because we are certainty seeking machines. We want order and want to avoid chaos. Our this tendency push us to think that we are in control of every thing in our life.
8.6 How you know which good outcome is a result of a good decision and which one is because of luck? Check the replicability. If you replicate the same decision over and over and get the same good outcome, then it will be because of your good decision. But if you replicate the same good decision but get different result every time, it is because your luck is involved in the process of good result.
8.7 Reflecting back on decisions is not an easy task. As I mentioned above that we are living in ever evolving world. Our beliefs and thinking get updated quickly. So, thinking on past decisions is not an easy task to do.
8.8 We live our lives in specific circumstances. We can’t get deeper knowledge of outcomes and decisions if we just keep reflecting them from only our own life’s perspective. We need bigger data set. To get bigger data set, we need to learn from other people experiences. We need to read and explore more about overall human experiences.
8.9 One key thing to remember when reflecting on decisions and outcomes is that every time you look at the past decision, you are not looking from a same lens or perspective. So having guilt on past decision and learning from past decisions both are tricky, until you have proper record.
8.10 From now onward, maintain record of decisions taken and outcomes separately. So you can know later on, which decision delivers you what kind of result.
Principle # 9: What get repeated must get systematized.
“You do not rise to the level of your goals. You fall to the level of your systems.”
James Clear
9.1 This principle is linked with Principle # 2: You don’t need to take decision for everything. Every decision require specific level of commitment and energy from you. Why wasting the energy on every single matter you face. So, take decisions on few matter, let other affairs get systemized.
9.2 You need to take decision when choosing a career path or life partner but you don’t need to decide daily whether to brush your teeth or not. Brushing your teeth is a daily practice. So, Systemized it.
9.3 Basically your daily calendar is a set of two types of activities. One are those daily repeatable tasks you need to perform to survive. Other are those which require special attention and decision making.
9.4 If you are facing a decision on daily basis, again and again, think about it once and for all and then try to systemized it.
9.5 Many companies know that decision making is not as easy it sound. That is why they systemized most of day to day affairs in a way that those matters require less and less thinking and more discipline.
9.6 This principle is crucial for artists. If you are writer, make writing a daily practice by systemizing it instead of taking daily decision about should I write today or not.
9.7 This principle is all about automating most of your life. This principle is about taking the mental and emotional drama out of your life. This principle is about making your life simple and easy.
9.8 Decision making is always get attached with honor and pride because of its importance. Make sure you are not taking decisions just because it is a matter of pride for you. Save your time and energy by installing more systems in your life.
9.9 Less decisions. More systems.
9.10 Is there anything popping up regularly in your life for your attention? If it is, how can you turn it into a daily repeatable system by deciding once and for all instead of treating it daily as a decision?
Principle # 10: The Ultimate Principles: Luck and Serendipity
“The World is much larger than you can imagine right now. Which means, you are much larger than you can imagine.”
William Deresiewicz
10.1 This is an ultimate principle because it requires lots of surrender on your behalf which is quite a difficult thought for a rational thinking brain.
10.2 Always remember that most things only make sense when seen in retrospect. It is easy to fell in a trap of regret and cursing your self for every poor decision but it require wisdom to understand the fact that every good decision doesn’t lead to good outcome and vice versa.
10.3 Unexpected (What you can call “Lucky Breakthrough”) have a quite important role to play in our lives and future. It can disrupt the way we already doing things and push us to pursue new paths.
10.4 Where luck is not in your hand, serendipity is. Serendipity is about acquiring set of skills to enhance your chances of attracting good luck.
10.5 One key skill is to prepare as much as you. You will see lucky people attract luck not because they stand under the shining thunderstorm but because they are the most prepared ones.
10.6 If you want to be a good decision maker and stay lucky too, then another skill to master is to staying in motion and momentum. More active you stay, more will be the chances that you will find yourself at right place at right time.
10.7 Another key skill to acquire while mastering your luck is to create connections and identifying hidden patterns. More preparation you will have and more active you will be, better connections and hidden patterns will expose itself to you. You will create paths where nobody ever imagine a path before.
10.8 In short, always remember the fact that in the world packed with people who are trying to predict what will happen tomorrow, you can take advantage by embracing the unexpected events of life and randomness of your fate.
10.9 Sometimes great decision are the ones you take through deep thinking. Most of times, great decisions are the ones when you make full use of whatever life gives to you.
10.10 Surrender. Understand that there is much Greater Force than you at work. Nothing is as bad as you think. Nothing is as good as you think. Trust the Master Planner and use your thinking whenever you can.
Conclusion
I deeply desire that this article helps you in thinking through different lens on decision making. Make sure you apply and submit your feedback.
Share it and live with passion.
