Decision making
Collect all inputs
Create as many options as possible
Be aware of cognitive biases
Get help
Develop a decision making process
Create transparency
Don’t seek perfection
Decide
1) Collect all inputs.
These can be opinions, emotions, numbers or any relevant data. Be aware of the credibility of the input and any potential bias. Try and find as many inputs as possible whilst being aware of the marginal benefit. Having an open mind when it comes to potential influences is helpful. Decisions may seem like they are a single moment of choice by one person. But they are more often the codification of a number of preceding events and opinions.
2) Create as many options as possible.
First look at all the likely outcomes, including no decision. Use contrarian and contextual analysis to frame the potential results in different ways. For example, reframe the impact of a decision in terms of loss or gain. Framing as a loss increases the feeling of threat. Framing as opportunity creates more flexible behaviour. A feeling of threat can be useful to motivate. A feeling of opportunity can be useful to capitalise upon. You’re unlikely to be able to predict all outcomes. So, whatever happens, the belief that you can turn it to your advantage will help enormously.
3) Be aware of cognitive biases.
When you know how your brain you can avoid its systematic errors. Some examples are: Loss aversion, status quo bias, anchoring, availability bias, pattern recognition, overconfidence, optimism, framing, temptation, mindlessness, peer pressure, self importance, exceptions of self, power of default, contagion of decision making, satisficing, self justification, recency bias, analysis paralysis and hot and cold states. Asking yourself the right questions is the key. We first learn to lie by lying to ourselves.
4) Get help.
Decisions are rarely made alone. Whether the leader of a business or a family, it can be helpful to collect the opinions of others. This will help remove yourself from the process. Do not let people try and persuade you, simply spell out the options. Know where you have expertise and where you don’t. Where you have greater expertise take more responsibility for choice. Where less diversification can avoid error. The wisdom of crowds is very strong. But it needs diversity, decentralisation, aggregation, and independence, beware group think.
5) Develop a decision making process.
Record all your predictions and the process used to make them. Talking it through can help explain them to the self and others. Make sure to get feedback on your decisions so you can improve the process. Never use the process to justify predetermined decisions. Intuition is useful, the problem is it can be hard to refine and pass on this decision making skill. So consciously monitor feedback at all times.
6) Create transparency.
Transparency helps people ask the right questions and get the right answers. Information disclosure enforces this principle of publicity for decision making. Make sure you would be happy to defend your position in front of others. This can help with the morality of decision making. Also enable people to openly challenge each other as equals. This will increase the information available. A deliberate devils advocates can help stimulate debate. Make sure the debate is not aimed at influencing the decision of the leader. This will bias the discussion back in the other direction.
7) Don’t seek perfection.
The information available to make a decision is always limited. You're attempting to influence events over which you don't have total control. So, be willing to make decisions based on probabilities and retain the freedom to change your mind. This is the best protection against bad choices. Decisions often evolve. Bigger problems arise by seeing decisions as events rather than processes. It is the interaction of small failures which cause problems. Catching small errors quickly will make the bigger ones less likely. Failures are windows in to the system. Be resilient.
8) Decide.
As simple as it seems, it's easy to wait too long or not decide at all. It was found that people sacrificed returns for retaining options by a measure of 15%. The participants of this study would have been better off if they had stuck with one choice at random for the whole experiment. Think about that in terms of your life.
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