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How to think under pressure

The value of accepting the unknown

A poor understanding of good or bad luck can derail the decision making of bankers, judges, and athletes. Being aware of probability will prevent you from reading too much into random events, or 'spotting' trends when there are none.

In the current pandemic, where governments design policies based on limited data, we could all do with a better understanding of uncertainty and how to think about it under pressure.

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How to think under pressure

How to think under pressure

https://www.bbc.com/worklife/article/20200622-how-to-think-under-pressure

bbc.com

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Key Ideas

Incomplete information and over-estimation

  • Much of what you need to know in life is hidden from you. You need to make decisions, but is still the victim of chance or uncertainty.
  • We tend to over-estimate the role of our own skills. The more people overestimate the importance of their own ability, the less flexible their decision making becomes.

Thinking probabilistically to avoid overestimating our abilities

To avoid the trap of overestimating our own skill, we need to start thinking probabilistically. That means estimating the odds and adapting your decision-making accordingly.

Even if the decision had a good outcome, we still need to objectively analyse the quality of the decision-making underneath.

Learn to deal with tilting

Tilting means realizing that your emotions are not separate from the logic of your decision making - for example, the despair that comes from bad luck, or the overconfidence that comes from a win.

You can learn to cope better by regularly checking in with yourself to see what you are feeling and how you react. Once you have identified those feelings, then try to analyse how they're influencing your judgment.

The value of accepting the unknown

A poor understanding of good or bad luck can derail the decision making of bankers, judges, and athletes. Being aware of probability will prevent you from reading too much into random events, or 'spotting' trends when there are none.

In the current pandemic, where governments design policies based on limited data, we could all do with a better understanding of uncertainty and how to think about it under pressure.

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Thinking in Bets

Becoming comfortable with uncertainty and not knowing is a vital step to becoming a better decision-maker.

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Systematic approach
Most people jump straight from finding a problem to attempting to solve it.

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Study the problem first

Detectives and investigators use the process. They ask both obvious and unthinkable questions.

Get close and collect information about how the problem is manifesting.  Understand where the problem does and doesn’t happen, when the problem started, and how often the problem occurs to generate critical insight for the problem-solving effort.

Question for great answers
  • Don’t look for solutions immediately; Keep redefining the problem until you arrive at the root cause.
  • Don’t try to guess the solution; try to understand how the obstacles, or challenges manifest first.
  • Gather data to analyze all potential root causes.
  • Consider all options, regardless of how irrelevant they currently appear.
  • Find a way to connect the dots. Make better analogies. One good analogy is worth three hours of discussion.

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