Making Smart Choices

• Work on the right decision

  The way you frame your decision at the outset can make all the difference.  State your decision problems carefully, acknowledge their complexity and avoid unwarranted assumptions and option-limiting prejudices.

  Making Smart Choices: 8 Keys to Making Effective Decisions

• Specify your objectives

  A decision is a means to an end . Ask yourself what you most want to accomplish and which of your interests, values, concerns, fears, and aspirations are most relevant to achieving your goal. Decisions with multiple objectives cannot be resolved by focusing on any one objective.

  Making Smart Choices: 8 Keys to Making Effective Decisions

• Create imaginative alternatives

  

  Your decision can be no better than your best alternative.

  Making Smart Choices: 8 Keys to Making Effective Decisions

• Understand the consequences

  Assessing frankly the consequences of each alternative will help you to identify those that best meet your objectives—all your objectives.

  Making Smart Choices: 8 Keys to Making Effective Decisions

• Grapple with your tradeoffs

  Because objectives frequently conflict with one another, you’ll need to strike a balance. Some of this must sometimes be sacrifices in favor of some of that.

  Making Smart Choices: 8 Keys to Making Effective Decisions

• Clarify your uncertainties

  

  What could happen in the future and how likely is it that it will?

  Making Smart Choices: 8 Keys to Making Effective Decisions

• Your risk tolerance

  When decisions involve uncertainties, the desired consequence may not be the one that actually results. A much-deliberated bone marrow transplant may or may not halt cancer.

  Making Smart Choices: 8 Keys to Making Effective Decisions

• Consider linked decisions

  What you decide today could influence your choices tomorrow, and your goals for tomorrow should influence your choices today . Thus many important decisions are linked over time.

  Making Smart Choices: 8 Keys to Making Effective Decisions

• Decision making and biases

  

  Experts have known for a while that our decision-making processes are flawed — and often in predictable ways . We easily succumb to all sorts of biases that prevent us from making smart choices.

  5 Expert-Approved Ways to Make Smarter Decisions

• Mental time travel

  

  A common decision-making problem is failing to have enough imagination with regards to what could go wrong or falling victim to simple overconfidence.  Envision the future. There’s evidence that this exercise can broaden your outlook and highlight problems that might not come to mind otherwise.

  5 Expert-Approved Ways to Make Smarter Decisions

• Don’t make an important decision

  ... when you're hungry, or sleepy, or angry. Research has shown that our susceptibility to bias increases when we’re stressed, whether because of exhaustion, hunger, or a heightened emotional state. Delaying a crucial decision, if possible, might be preferable to making it under conditions of stress.

  5 Expert-Approved Ways to Make Smarter Decisions

• Estimate twice, decide once

  When it comes to decisions, conduct whatever research you need to and make your estimate — and then go through the whole thing again, generating a second estimate. Take the average of the two estimates, and you’ll likely make a better decision than you would if you used either on its own. 

  5 Expert-Approved Ways to Make Smarter Decisions

• Use a “planning prompt”

  When it comes to situations where the benefits of a good decision lie in the future (reduced weight) but compelling temptations to make bad decisions are all too present (nachos), writing down a specific plan of attack can be helpful. It can help decision-makers avoid follow-through failures due to both procrastination and forgetfulness.

  5 Expert-Approved Ways to Make Smarter Decisions

• Decide in advance

  For a wide range of decisions involving self-restraint, there’s pretty overwhelming evidence that most people are bad at making healthy in-the-moment choices. Decide well in advance of the moment when those decisions will take effect. Present You, at the supermarket after a meal, is probably a better nutritional decision-maker than Future You, standing in front of the fridge, inexplicably starving at 3 a.m.

  5 Expert-Approved Ways to Make Smarter Decisions

• Bias is everywhere

  

  Being aware of your own biases doesn't mean you will be free of them. You need a system that will help prevent your proclivities from taking control. Rather refer to bias as "predictable mistakes" that people make when planning. For instance, getting anchored on last year's numbers. That is bias, but the language provides another way of addressing it. It is more pointed and practical.

  4 Ways to Make Smarter Decisions

• You're not as smart as you think

  

  It wasn't an individual that got people to the moon. It was all of NASA.  There should be recognition of how many people really should be involved and the need for mechanisms to deliver smarter decisions.

  4 Ways to Make Smarter Decisions

• There is safety in numbers

  According to Heath, one study at a mid-sized high tech company showed that a group of leaders thought decisions were six times more effective when they considered two alternatives instead of one. Instead of asking a group for its decision, request the two top choices.

  4 Ways to Make Smarter Decisions

• Past decisions

  Consider alternatives and prepare to be wrong--really wrong, not just slightly. And create an atmosphere in which people can disagree and bring up important points that might otherwise be glossed over. 

  4 Ways to Make Smarter Decisions

• Separate decision quality from results

  People have a natural tendency to conflate the quality of a decision with the quality of its outcome. They're not the same thing.  You can make a smart, rational choice but still get poor results. That doesn't mean you should have made a different choice; it simply means that other factors (such as luck) influenced the results. You cannot control outcomes; you can only control your actions.

  How to make smarter decisions ~ Get Rich Slowly

• Luck and Incomplete Information

  

  Why don't smart decisions always lead to good results? Because we don't have complete control over our lives — and we don't have all of the information.  You can opt not to drink on New Year's Eve, for instance, but still get blindsided by somebody who did to drink and drive. You made a quality decision, but happenstance hit you upside the head anyhow.

  How to make smarter decisions ~ Get Rich Slowly

• Thinking in Bets

  Becoming comfortable with uncertainty and not knowing is a vital step to becoming a better decision-maker. What makes a decision great is not that it has a great outcome. A great decision is the result of a good process, and that process must include an attempt to accurately represent our own state of knowledge.

  How to make smarter decisions ~ Get Rich Slowly

• Make smarter decisions

  Stop thinking in terms of right and wrong . Few things are ever 0% or 100% likely to occur. Instead, we should think in bets. Before we commit to a course of action, we should think about possible outcomes and how likely each of those outcomes is to occur. Every choice carries an opportunity cost . 

  How to make smarter decisions ~ Get Rich Slowly

• Improve the quality of your decisions

  Learn to examine your own beliefs . If you're certain about something, explore the opposing viewpoint. Build a network of trusted advisors . Draw on people from a variety of backgrounds and belief systems.  When you make decisions, think of the future.  Practice backcasting, a visualization method in which you define the desired outcome then figure out how you might get there.

  How to make smarter decisions ~ Get Rich Slowly

• You are the sum of your decisions

  

  A few major decisions determine a good portion of how our lives, careers, and relationships turn out. The outcomes of these decision points will reverberate for years. Even small decisions can matter as they accumulate over the years .

  The Ultimate Guide to Making Smart Decisions - Thrive Global

• Why We Make Poor Decisions

  We’re not as rational as we think.  We’re not prepared. We don’t understand the invariant ideas — the mental models — of how the world really works.  We don’t gather the information we need. We make decisions based on our “guts” in complex domains that require serious work to gather all the needed data. 

  The Ultimate Guide to Making Smart Decisions - Thrive Global

• The World Is Multidisciplinary

  We live in a society that demands specialization. Being the best means being an expert in something.  A byproduct of this niche focus is that it narrows the ways we think we can apply our knowledge without being called a fraud. We should apply all the knowledge at our disposal to the problems and challenges we face every day.

  The Ultimate Guide to Making Smart Decisions - Thrive Global

• General Thinking Concepts

  Inversion — Otherwise known as thinking something through in reverse or thinking “backwards,” inversion is a problem-solving technique. Second-Order Thinking — Ask yourself, “And then what?” The Map Is Not the Territory —The map of reality is not reality itself. If any map were to represent its actual territory with perfect fidelity, it would be the size of the territory itself.

  The Ultimate Guide to Making Smart Decisions - Thrive Global