The Right Way To Decision Making
Decision-making is an integral part of life. Right from the simple day-to-day decisions about what to cook for dinner, to the important ones like which job offer to take up, making better decisions in life leads to a better life itself.
Decisive by Chip and Dan Heath highlights the typical problems one faces while making decisions. It gives insight into how decisions are formed and how one can avoid making bad ones. Additionally, it also shows how making poor decisions and not making any decision at all can have damaging effects, and what one can do to counter them.
Don’t Limit Choices Artificially
Making a choice between two options can be tough. Often, with binary choices, people tend to not even consider other alternatives. While one may have only two options present, one could struggle between the two without realising that there are a whole array of choices apart from those present.
For example, a simple choice between two options – whether one should attend a party or not – presents one out of two choices. As one grapples with choosing one out of the two, the possibility of the choice of watching a movie, or a football game is not even considered.
One can consider the ‘opportunity cost’ of a choice. For example, one could ask – ‘what will I give up, if I make the choice?’ For instance, between a choice of buying a $1000 fancy stereo, versus a $700 basic functional one, the opportunity cost makes one think of the pros and cons of saving the $300. The opportunity cost would help one determine whether it is better to have better sound and classy design, or choose the functional stereo and buy $300 worth of records.
In a study conducted, participants were given a choice of buying a video for $14.99, or not buying it at all. 25% of the group chose to not buy the video. However, when the wording of the offer was changed to ‘keep the $14.99 for other purchases’ the percentage of people who chose not to buy the video increased to 45.
This showed that initially when there were only 2 choices, people didn’t even consider other alternatives. However, when presented with the faintest hint of other alternatives, people were able to make better decisions.
Multi-tracking To Find The Best Solution
Binary decision-making involves choosing one of the perceived better choices. However, as seen above, considering other alternatives can help in better decisions. This is called multi-tracking.
Multi-tracking, or actively seeking out other options simultaneously, drastically improves one’s chances of making better decisions.
A study tasked two groups of graphic designers to make a banner advertisement for an online magazine. The first group made one ad at a time, receiving feedback for each ad as they presented it. The second group worked on three ads at a time. Upon receiving feedback, they narrowed down their choices to two. The next feedback round enabled them to finalize their choice. The ads of the second group were even rated higher by editors and executives in a real-world test.
Working on several choices helped then compare the feedback received for each ad simultaneously. They were able to combine the feedback from each round and incorporate it into the final ad.
The process resulted in better quality work as well as made decision-making faster. By having alternatives, one is less invested in one single idea allowing flexibility in opinion. Furthermore, working on multiple alternatives simultaneously, one has a plan to fall back on if the original one doesn’t work.
That said one has to be wary of choice overload, where too many alternatives can paralyse decision-making. For example, when buyers were presented with 6 jam samples, the likelihood of purchase increased ten times than when customers were presented with 24 options.
Analyse Similar Solutions
People often think that the fact that their own problems in decision-making are unique to them because their problems could differ slightly from another’s problem that has already been resolved.
Looking for similar problems that have already been solved by others can help. For example, in 1954, the founder of Walmart, Sam Walton, took a 12-hour bus ride just to see the new checkout line at Ben Franklin stores. He saw that they had one central checkout rather than different counters for different categories of products.
He immediately implemented the same process at his stores. In this way, Walton would keep a check on his competitor to solve his own issues and make better decisions.
Analogies help in perceiving specific problems in a general manner, helping in finding an effective solution.
The designer of Speedo’s Fastskin Swimwear, Fiona Fairhurst, examined all the things that move fast such as torpedoes, space shuttles, and sharks while designing the suit. Using the features of both, she created a material that reduces drag and compresses the skin of the swimmer to emulate a torpedo-like shape.
She considered the general idea of speed rather than thinking of a specific one of making a fast swimsuit. The result was so good that the material was banned in 2010.
Avoid Biases And Play The Devil’s Advocate
The choices one makes are always the ones that one likes most. However, these choices might not necessarily result in the best decisions. While preferences can bias decisions, one can employ certain practices to reduce their influence on decisions.
In this method, one should get another person to disagree with their choice, then consider the things that make the least preferred choice, or all the other options the best choice. This way, one doesn’t think of validating personal preferences, but rather thinks logically about the pros and cons of the other least-preferred choice.
Another way is to get the other person to play the devil’s advocate against the preferred choice and get them to make a presentable case for the least-preferred choice(s).
The next step is to ask questions that help in getting out opposing information. For example, say a person is offered a well-paying, secure job in an established law firm.
Playing devil’s advocate would mean asking questions to the employees such as, ‘How often do they dine with the family at home?’ ‘What is the rate of attrition in the company?’ etc., rather than asking them if they are happy with their current jobs.
Get An ‘Outside’ Perspective Of The Situation
Despite the small differences in situations, most people face issues that are similar. One can benefit from looking at how others fare in these similar situations.
Consider Jack, a great Thai chef who is planning to open a restaurant. He finds a location that has other Thai restaurants in the vicinity, albeit with good foot traffic.
This is Jack’s inside view. To understand an outside view, Jack has to analyse data of how others in a similar situation have fared. For example, the outside view could reveal that about 60% of restaurants fail within the first 3 years of opening considering base rates.
While it isn’t a deciding factor for Jack to open his restaurant or not, it is an important factor to consider.
Secondly one must ask indicative rather than predictive questions. For example, rather than asking a lawyer, ‘Will my case get settled before reaching trial?’ one should ask, ‘How many cases similar to mine have gotten settled before trial?’
One must, however, be wary not to take information at face value either. It is always wiser to look deeper. For example, a person looking for an excellent Chinese restaurant finds one with a 3.5 rating. However, on closer examination of the reviews, he finds that the ratings are based on cost, whereas the food at the restaurant is actually outstanding. Not having a problem with cost, the decision to eat at the restaurant is a good one.
In this case, the rating (based on cost) itself lacked the specific information the person wanted.
Check If The Idea Works
Experimenting with an idea on a smaller scale is a great strategy. Often, executing a plan purely based on belief can backfire. Testing the waters with small experiments is called ooching.
Internships, for example, help in gaining a little experience in any profession. It helps people test the waters before diving headlong into a career. Humans are bad at predicting futures, and hence, ooching works well as a strategy in making decisions.
When companies hire people based on interviews, they often fall victim to interview illusion. A few hours of interviewing can never help one get the true measure of the potential of a new hire. In such cases, hiring for internships – a form of ooching – works best.
Some situations, however, do not present the opportunity to ooch. In such cases, full commitment is needed from the start. For instance, one cannot enrol in university to simply try it out. Here, one has to do a good amount of research and formulate a plan before committing.
Shift Focus To The Future
Considering long-term consequences is vital to any decision. Often, the choices one makes are hijacked by what one believes is important about that choice, at the moment the person is faced with it. There are some techniques one can apply to avoid bad outcomes of choices.
- Emotional distancing – The emotions one experiences in the present while making a choice are clear, whereas it is impossible to ascertain how one will feel about those choices in the future. For instance, salesmen exploit this fact and work to sell people a product based on short-term emotion. Hence training the brain to emotionally distance from choices, by imagining the outcomes in a future perspective is essential.
One should use the method of 10/10/10. The method involves asking oneself how they would feel about the decision 10 minutes, 10 months, and 10 years in the future. This way one can equalize current emotions about any decision.
- Taking an observer’s perspective – Consider a situation where a girl likes a boy in her class. She really likes the boy, but hasn’t spoken to him much, and worries that he won’t remember her at all.
She has two options, a) call the boy, or b) call him after she gets to know him better. Studies show that in such situations, people often suggest option a to others, whereas tend to choose option b for themselves. This happens because the fear of rejection – a short-term emotion – doesn’t present itself to them while helping others with a decision.
Thus, taking an observer’s perspective, or looking at the choices from a distance, make certain obvious aspects of the choice visible, which are often far from the ones that cloud the mind in the present. Asking oneself, ‘What would I recommend my friend to do in this situation?’ is thus one of the best questions that can help solve this dilemma.
Identify Core priorities
Identifying the core priorities that affect a decision is very important in decision-making. Often, it is not the emotions, but the order of priorities that can hamper good decision-making.
For example, a person who has a new job offer could still be confused about whether he should accept it or not, even after the initial excitement of clearing the interviews has passed over. The question here is, ‘Which are the long-term emotional goals, values, and aspirations that are most important?’ Stating and prioritizing core priorities will help in making a decision.
It is more important to commit to act on those core priorities once they are in order. While many swear by multitasking, one has to understand that considering the limited time one has in life, devoting time to figuring out core priorities will mean that one has to limit the time they spend on other things.
For example, if a person decides that exercising after a long day at work is a better way of relaxing rather than watching TV, she has to commit to a regular workout schedule. She has to be prepared to give up on TV watching if exercising is a core priority.
Preparing For The Consequences Of Decisions
People have a foolish tendency to consider only one possible consequence of their decisions, even though they have no way of ascertaining that future outcome. It is essential to consider both the worst and the best possible outcome. This enables one to estimate their current position and then act when reality moves closer to the worse outcome. One can use prospective hindsight – the concept that cognitively evaluating fact is better than a possibility – to one’s advantage.
For instance, consider it is one year from a decision made. One can ask why the decision failed, rather than asking what could happen one year in the future after the decision is made.
That said one should also be prepared for possible success. For instance, a company that decides to launch a new product should be able to handle the exponential increase in demand if it becomes a skyrocketing success.
One should also have a safety net in place to prepare for and protect from unforeseeable circumstances. Elevators, for example, are made with cables that are actually 11 times stronger than the calculated weight and strain that they will endure. Adjusting predictions to factor in overconfidence is extremely important.
For example, if a web designer is confident that he will be able to create a website within the given 2 days deadline, he should factor in at least half a day as a safety net for unforeseen consequences.
Setting A Tripwire From Auto To Manual
It is difficult to estimate gradual changes in any action or thing when it is done or seen every day. Not being able to account for or foresee such changes can lead to drastic consequences. Hence it is vital to have a ‘tripwire’ set, which makes one aware of their actions or behaviour that could potentially lead to those changes, and if needed helps correct it.
Here, one can set or establish clear signals that could check against ‘autopilot behaviour’. The American shoe seller Zappos has set a tripwire to help unmotivated employees see and understand their situation. They offer employees $4000 to quit if they, at any point, feel that they are unmotivated in their current role. This tripwire interrupts indecisive habitual behaviour inciting conscious decision-making. The bonus for the company – it helps in getting rid of underproductive staff.
Another way is to set partitions and deadlines from getting into unproductive habits.
Deadlines enforce decision-making that people would otherwise procrastinate upon. A study offered students $5 to complete a survey. When a five-day deadline was given to them, 66% of the students completed the survey and collected the money, as opposed to only 25% when there was no deadline.
Partitions work in similar ways. For example, large investments are handed out in smaller parts over time, rather than handing out one large sum. This is done to make each small part work as a tripwire, ensuring that everything is going well.
The third method is to use labels. Labels help in recognising encouraging or disturbing patterns in behaviour or action. Pilots are, during training, introduced to a concept called ‘leemers’. The term is used to describe a vague feeling that something isn’t right, even when it’s not clear what is wrong and why. Assigning a label for such a feeling makes pilots less likely to ignore that feeling and try to figure out what’s wrong.
In situations where lives are at stake, having a tripwire in place is vital to prompt people to pay close attention.
Decision-making can be an arduous process. However, following certain practices can help in making better and sound decisions that can eventually help one lead a better life.
One can follow the WRAP process, which stands for –
- Widening one’s options
- Reality-testing assumptions
- Attaining distance from emotions attached to decisions
- Preparing to be wrong