You can improve your decision making.When you get to the fork in the road, take it!
—Y. Berra
You covered a lot of ground in this book. You learned about the concept of rational decision making and why it’s so hard to be rational. You took eight personality tests and considered what your scores mean in terms of how you make decisions. You read about more than a dozen biases and errors that many of us make in the decision process. For instance, we tend to be overconfident, we rely on the most available information rather than the most important, we limit our alternatives, and we finish our search too soon. Decision Tips were included to help you overcome these biases and errors. Finally, you read a number of suggestions—many of them counterintuitive—that can make you a better decision maker.
What should you walk away with after having read this book? The following summary points capture the essence of what you should have gotten from this book.
You can improve your decision making.
No skill may be more important to success in life than the ability to make competent decisions. Although most people have little or no formal training in developing this skill, there is a substantive body of knowledge that can help you make better decisions. This book brings that knowledge to you. This book’s major contention has been: You can improve your decision making. I presented the major obstacles and provided suggestions for overcoming those obstacles.
The focus has been on the decision process rather than outcomes. That’s because a good decision should be judged by the process used, not the results achieved. Unfortunately, in some situations, you find that a good decision results in an undesirable outcome. If you used the right process, however, you will have made a good decision regardless of the outcome.
No skill may be more important to success in life than the ability to make competent decisions.
Learning to use the right process is not easy. It requires considerable work on your part. Many of the bad habits you currently have developed over decades. Replacing them with good habits won’t happen overnight. Follow the guidelines presented in this book. And reread this book every once in a while to remind yourself where you can improve.
It all starts with goals.
No theme reappears in this book more often than the importance of goals. Everything evolves from goals. Without them, you can’t be rational, you can’t differentiate important decisions from unimportant ones, you don’t know what information you need, you don’t know which information is relevant and which is irrelevant, you’ll find it difficult to choose between alternatives, and you’re far more likely to experience regret over the choices you make.
You need long-term goals and short-term ones. You also need a plan or road map that can get you from where you are to where you want to be. If your goals are clear, you’ll be amazed at how much easier it is to make decisions. You’ll be able to quickly eliminate options that are inconsistent with your interests, and you’ll significantly reduce the likelihood that you’ll make choices that take you in directions that you’ll later regret.
Use the rational process whenever possible.
The goal of effective decision making is to be as rational as possible. And you’re rational when you seek to make consistent and value-maximizing choices within the constraints you’re given.
The rational decision process follows six steps: (1) Identify and define the problem; (2) Identify decision criteria; (3) Weight the criteria; (4) Generate alternatives; (5) Evaluate each alternative; and (6) Select the choice that scores highest.
Although these steps seem straightforward and relatively easy to implement, they’re not—especially with complex decisions. Biases, personality tendencies, and bad habits all get in the way.
Do you always need to be consistent? No. When you obsess on consistency, you create barriers to change. While most First-World societies value consistency and look askew at behavior that is inconsistent, sometimes flexibility can also be an asset. It’s all right to be inconsistent if you can objectively justify it. Conditions change. What was an appropriate decision last week or last year, because of changing conditions, may no longer be the best choice. Your previous decision may not necessarily have been wrong; it just may no longer fit the prior conditions it was made under. Continuing down the wrong path merely to maintain the appearance of consistency is foolhardy.
There are costs in doing nothing.
When faced with a tough or complex decision, a natural response for many of us is to do nothing. This seems to come from the assumptions that it’s always better to err on the side of caution and that the cost of delay is minimal or nothing. However, I’ve argued strongly that the decision to do nothing is still a decision. It’s a decision to maintain the status quo.
To the degree that the status quo is a desirable state, then staying the course is appropriate. But when this approach is taken to avoid having to deal with hard choices, it can become a serious handicap.
Challenge yourself to directly question the status quo. To ensure that you’re not becoming too comfortable with your current situation or too fearful of the consequences from making changes, you need to occasionally ask yourself this question: Why shouldn’t I pursue another path from the one I’m currently on? By shifting the frame from one of “why should I change?” to “why shouldn’t I change?” you become proactive and increase the probability of addressing problems before they become serious.
Know your personality tendencies.
It’s been said, tongue in cheek, that “you’re unique, just like everyone else!” Ironically, there is some truth in this statement. Each of us is unique, but we’re unique in similar ways. Trait theorists, for instance, have identified primary personality characteristics common among all individuals, but along which people differ to a degree. For instance, risk tolerance is a personality trait, and people differ in their willingness to assume risk.
In Part II of this book, you took short tests for eight personality factors: decision style, risk tolerance, maximizer versus satisficer, locus of control, procrastination, impulsiveness, emotional control, and overconfidence. Although these are not the only important personality factors that influence decision making, they do provide some valuable insights into how you approach and make decisions. For example, your score on locus of control offers insights into the degree to which you believe that your decision choices can actually shape your destiny. And your score on impulsiveness suggests how likely you are to make decisions on the spur of the moment and focus on the present rather than the future.
You should use this personality feedback to better understand your tendencies and to make adjustments when these tendencies might hinder your decision effectiveness.
Look for information that disconfirms your beliefs.
One of the most effective means for counteracting overconfidence, the confirmation bias (seeking out information that reaffirms our past choices), and the hindsight bias (falsely believing we’d have accurately predicted the outcome of an event, after that outcome is actually known) is to actively look for information that contradicts our beliefs and assumptions. When we overtly consider various ways we could be wrong, we challenge our tendencies to think we’re smarter than we actually are. In effect, we become our own devil’s advocate by assuming our beliefs are wrong and by aggressively searching out alternative explanations. If our beliefs are correct, they’ll stand up under close inspection. If they’re flawed, this approach is likely to reveal it.
Consider how an impartial outsider might see a situation differently.
It’s hard to see situations differently when we look through our biased lenses. Our attitudes, motives, expectations, interests, prejudices, and past experiences cloud our objectivity. A successful way of dealing with these biases is to stand away from the situation and look at it from an impartial outsider’s perspective. Put yourself in someone else’s shoes, someone who isn’t emotionally involved in the decision and who doesn’t necessarily see it through your prior decisions and commitments, likes and dislikes, frames, and so on. For important decisions, you should also consider getting others’ advice. Input from a neutral party can often offer insights and perspectives that you’re unable to provide.
Don’t try to create meaning out of random events.
The educated mind is trained to look for cause-effect relations. When something happens, we ask why. Although such thinking is obviously desirable, it has a downside. When things happen by chance, we tend to look for reasons. And when we can’t find reasons, we often create them out of thin air.
We like to believe we have some control over our world and destiny, but the truth is that the world will always contain random events. You need to be able to accept this fact, differentiate chance events from those that actually follow established patterns, and avoid trying to create meaning out of random data.
You have to accept that there are events in life outside your control. Ask yourself if patterns can be meaningfully explained or whether they are merely coincidence. Don’t attempt to create meaning out of coincidence.
When you’re afraid to make mistakes, you miss learning opportunities. You also tend to avoid active decisions—either doing nothing for fear of failure or making choices only when you’re forced into it. And if you’re afraid to make mistakes, you won’t take risks. Instead, you’ll go for the safe choices.
In many cases, the safe choice is the best choice, but it isn’t always. I have not advocated arbitrary risk taking. Rather, you need to choose your risks thoughtfully, intelligently, selectively, and with careful consideration of probabilities. Alternatives with minimal chances of success, regardless of payoffs, are gambles. However, you don’t want to miss opportunities with good chances of success just because they have potential for failure.
A final thought.
You have the power to control your future through the decisions you make. By understanding and practicing the suggestions offered in this book, you can improve the processes by which you make choices and statistically increase your decision batting average. Ignorance isn’t bliss. You can ignore the wealth of research insights summarized in this book. Or, you can start applying them today and become a more effective decision maker. The decision is yours!