Four Strategies to Make Better Decisions: Decisive Book Summary

cups hiding ball“When it comes to making decisions, it’s clear that our brains are flawed instruments,” Chip and Dan Heath

I’m a pros and cons kind of guy. When I’ve got a difficult decision to make, I pull out a sheet of paper, sketch a line down the center, and start marking down the obvious benefits and pitfalls. It’s a method once prescribed by Benjamin Franklin. It’s one of the most common approaches to solving a dilemma.

And unfortunately, it often leads to the wrong decision, or simply fails to add any real clarity.

At least, that’s how Chip and Dan Heath describe it in the intro to their latest book, Decisive: How to Make Better Choices in Life and Work.  Humans, it seems, are simply terrible at making good decisions, say the authors, who also co-wrote the best sellers Switch and Made to Stick.

In Decisive, the Heath brothers put together decades of experience and the leading theories and studies on the topic, to describe the “four villains” of decision making, and a framework that can be used to overcome them. Big decisions are something that effect everyone, on all levels, from our romances, to our careers, so it’s crucial to know how to get them right.

The Four Villains of Decision Making

Villain #1: Narrow Framing

The first villain of decision making is narrow framing. This occurs when we first encounter the problem and need to make a choice, but we define our options too narrowly, preventing us from pursuing of alternative, potentially better options.

The authors of Decisive point to a study that found that in only 29 per cent of corporate decisions was more than one option considered. That mirrored the findings of a Carnegie Mellon study that found that, among teenagers, 30 per cent of the time the decision made (like going to a party) was a simple yes-or-no, rather than considering other options.

“Most organizations seem to be using the same decision process as hormone-crazed teenager,” the brothers say.

Villain #2: Confirmation Bias

Once you’ve framed you decision, you analyze your options. But at this stage, bad decision-making leads you to gather self-serving info. This villain is called confirmation bias and it’s the phenomenon that happens when you want an idea to be true, and you pay closer attention to all the data that supports that idea, ignoring the rest.

Decisive gives a typical example of this bias from one of the many studies on the topic: When the jury was still out about the harms of smoking tobacco, smokers in the 1960s were more likely to express interest in reading an article headlined “Smoking Does Not Lead to Lung Cancer,” than one with the headline “Smoking Leads to Lung Cancer.”

The biggest threat here is that biased research can seem very scientific; the bias is often very hidden from us. Dan Lovallo, a decision-making researcher and professor is quoted in the book as saying: “Confirmation bias is probably the single biggest problem in business, because even the most sophisticated people get it wrong. People go out and collect the data. And they don’t realize they are cooking the books.”

Villain #3: Short Term Emotion

Once you’ve analyzed your options, you finally make a choice. But there’s a risk you let your short term emotions take the steering wheel, rather than rely on other more trustworthy sources.

When we’ve got a difficult decision to make, our feelings go crazy, we replay the same arguments in our head, we agonize about our circumstances, we change our mind from day to day. As the Heath brothers put it: “We have kicked up so much dust that we can’t see the way forward.”

Villain #4: Over confidence

In January 1962, a four man rock group, called the Beatles, entered Decca studios, played an hour long audition and played fifteen different songs. They left, hopeful to get a record deal, and waited anxiously.

Eventually they got the verdict: Decca had decided to pass, saying “four-piece groups are out; four piece guitar groups, particularly, are finished.”

This brings us to the last villain of decision making: over confidence. Once we make a decision, it’s not over, we still have to live with it.  But we are often over confident about how the future will unfold. We have too much faith in our own predictions, without stopping to plan for what happens if we are wrong. I bet that Decca record exec had a hard time sleeping after Beatlemania swept the world.

The villain here is ignoring the uncertainty of the future, and not stopping to ask: “What can go wrong? What are we not seeing?”

 

Four ways to make better decisions

Widen your options.

When you are framing your decision, you should avoid the tendency to frame it too narrowly. It is rare that there are ever really just two options – a binary “either or” choice, such as, “Do I fire my employee or not?”

The strategy to over come this is simple: widen the field of options.  The authors give us a set of useful tactics to do that. One is to think of the opportunity costs of making a decision. Instead of asking do I get the luxury car, or the cheaper one, ask if you would you rather spend the extra $5,000 on features, or use that cash instead to take your family on a vacation.

Another approach is to do the Vanishing Options test. Force yourself to imagine what you would do if, suddenly, the two options you are considering disappeared. What other choices exist that you are simply not seeing? Maybe your troublesome employee is not happy and he could be much more productive in a new role. Move your spotlight around and see what else is possible.

Reality-test your assumptions.

When we are being driven by our own biases, we need to step back and ask, “What would it take for your assumptions to be wrong? Can you test your assumptions?”

Because we naturally seek self-serving information, this approach takes discipline. One strategy is to actively seek disagreement within the organization, to support a culture of skepticism.

You can also overcome your biases by uncovering reviews, data, and the advice of experts who have lived through the decisions you are considering. The authors point out that we often trust sites like Yelp for restaurant and travel reviews – but we rarely do the same kind of research with our greatest life choices (what school should we go to, should we take the job?) You should go out there and seek similar reviews from a source you can trust, not your gut.

Attain distance before deciding.

Speaking of going with your gut, your emotions are probably the most pernicious of all the villains. Often we can be blinded about the obvious “right” choice, because we have so much invested in one path or the other. Which is why its critical to attain distance from your emotions when faced with a decision.

One good strategy to overcome short-term emotion is to avoid situations that put pressure on you to move fast and decide. The favourite example here is the used car salesman, who will do everything in his power to make you feel that, if you don’t buy this car, right now, the amazing deal he is offering you will fly off the table. You start to get nervous and scared and you jump into. But stick to your guns, and give yourself time to decide. Or better yet, avoid the car lot altogether and make your decision at home, in front of your computer screen.

Another great strategy to reduce emotional blindness is the 10/10/10 approach. This forces you to consider how you will feel about a decision in 10 minutes, in 10 months and then in 10 years. Often, sending that angry email will feel good, but only for a few seconds.

Prepare to be wrong.

It is becoming more and more common for organizations to hold a “premortem” before jumping into a major decision. This is a meeting held about a hypothetical future, where they made one decision and everything went horribly wrong. Everyone around the table must present ideas for why they think the plan failed – and often this leads us to uncover errors in our judgment, and helps us plan for failure.

Another good way to prepare for the future is to treat it like how investors treat stock quality. The future is not a single point you need to predict, but it is a scale of upside and downside. In this way you “bookend” the future, plotting the trigger points that make you “sell” or “buy” – thinking of the best and worst case scenarios. Not only will this help clarify the decision at hand, but it will also give you the confidence to move forward knowing that no matter what happens, you will have a plan.

When faced with a decision, WRAP it

Everyone, at some point, will be faced with a hard decision. It’s important to be mindful of the dangers of jumping into it, without first giving yourself time to properly analyze it. Not every decision will be so tricky, but certainly some will.

The four strategies described in Decisive can be easily recalled using the mnemonic device, “WRAP”.

-       Widen your options when framing the problem

-       Reality check your assumptions to avoid confirmation bias

-       Attain distance from your emotions to see more clearly

-       Prepare to be wrong, because the future is uncertain

You can read the first chapter of Decisive here.

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