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Jeff Bezos explains the perfect way to make risky business decisions
"Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you're probably being slow."
Jeff Bezos
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Default choices
90% of your daily decisions happen automatically, many shaped by your environment. Thus, most decisions are a habit, not a deliberate choice.
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Design your life like a choice architect:
- Encourage smarter decisions you want to do by making them more accessible.
- Add friction to habits you want to quit, making them less accessible, or remove the option to perform them completely.
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“First, never underestimate the power of inertia. Second, that power can be harnessed.”
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Before jumping to a conclusion, think about the long-term consequences of your decision.
We may respect those able to fling themselves into a hard problem and make a quick choice with seemingly little thought, but making a meaningful decision needs to be done with care for the long-term effects.
Understand Decision Fatigue
It’s important to be aware of what state of mind you’re in before tackling a hard choice.
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The 37%
Mathematics dictates that you should take 37% of the time or options you have to simply look and after that, you should commit to the first option that is better than everything you’ve ...
The brain when we make decisions
The 2 systems of the brain that wok during decision making:
- System 1 is automatic and quick (like "something feeling off").
- System 2 is deliberate and slow (like an algorithm).
At times, these systems are at odds with each other, but research shows it's always best to trust an algorithm than your own gut.
Pros-and-cons lists are flawed
There are a few biases they don't address:
- Narrow framing: the tendency to view an option as your only option.
- Confirmation bias: our tendency to gather the information that supports our preferred option.
- Short-term emotion: our tendency to have our judgment clouded when emotions run high.
- Overconfidence: our tendency to make a decision with too much optimism about how things will play out.