How to Make Better Decisions

#career #business

This is my book outline of Decisive, written by Chip and Dan Heath and published in 2013. I found many nuggets of wisdom while reading this book, and wanted to cement the ideas into my head by writing a multi-part outline of this book. That being said, all of these ideas belong to the authors and I am only re-iterating them / adding on to them.

If you've ever had to make a tough decision involving your career, relationships, where you should live etc. I recommend picking up Decisive. The authors discuss common decisions people and companies, and more often than not, how they fall into they make bad decisions. A lot of their information is backed with recent historical evidence and applicable to some of the most impactful decisions I've had to make. Note: this book isn't for making snap decisions, like what you should eat or what clothes to wear, but about decisions that take more than 5 minutes to decide.

The book starts off with the 4 most common "villains to decision making." You will encounter each of these villains at every step of the decision process. The decision process and their villains are summarized below. Note that I've added my own examples below to illustrate them.

1. When you encounter a decision, you tend to view decisions with a narrow frame. When we ask "Should I do this or not," it traps us into thinking that we only have two options.

2. When you analyze your options, you tend to look for self-confirming information, information that supports what we already believe.

   1. When you want to look up information on a controversial topic, do you look at the views of the political party you're already aligned with?

3. When you make a choice, you might be led astray by short-term emotion.

   1. Car dealerships try to get you to make an emotional decision by asking you how it feels to drive a new car.

   2. Don't date someone you've met in a bikini, probably.

4. When you live with your decision, you may be too overconfident in your decision.

   1. "Who the hell wants to hear actors talk" - Harry Warner, Warner Bros. Studios 1927.

How do we defeat these 4 villains? The Heath brothers' strategy is called the WRAP process.

1. We need to step out of the narrow-frame by Widening Our Options.

2. Instead of looking at self-confirming information, Reality-Test Your Assumptions.

3. When emotions are high, we need to Attain Distance Before Deciding.

4. When we make our decision, we should instead Prepare to be Wrong.

The rest of the book covers different strategies for each of the steps.

How to Widen Your Options

when you encounter a decision

1. Avoid a Narrow Frame

   1. "Whether or not" (Should I break up with this person or not) decisions are basically "yes or yes" decisions; they list all the positives of one option but do not make a good case for the "not" option. Teenagers and large corporations are likely to make this mistake of not having built a valid case for why they shouldn't do something. When you ask yourself a whether or not decision, it should be a red flag.

   2. When you find yourself in the above situation, consider opportunity cost. Think about the costs associated with selecting the first option: Should you spend $100 on keyboard switches, or spend the $100 on something else?

   3. Also consider the Vanishing Options Test. Imagine that the options you are considering suddenly disappear. What can you do instead?

2. Multi-Track Your Options

   1. Consider more than one option at the same time, rather than one after another. For example, ask for graphic designers to show you more than than one design of the same concept. You get to cross compare and then combine the goods from all of them. Designers are also less attached than they would be with only one idea, leading to being able to take more constructive criticism.

   2. Beware of decision paralysis. Too many decisions can prevent you from making a decision at all. You want a few good decisions that you "fall in love" with at least a few of these.

   3. Also beware of fake options. Some options aren't of good options but lead you into a narrow frame of only considering one real option. Your friend might ask you what do you want for dinner: salads, fruits, or a large pepperoni pizza from your favorite pizza place?

   4. Be prevention AND promotion focused. How can you be cautious and safe, while also optimistic so you can take advantage of opportunities down the line? During the 2000s recession, Staples closed some stores (prevention focused) while also hiring more workers (promotion focused), and ended up being more profitable than Office Depot that was mostly prevention focused.

   5. Building on the above, ask yourself if you can consider "this AND that" rather than "this OR that"

3. Find Someone who's Solved Your Problem

   1. Scout out what other people have done in your shoes

   2. Look at the few times when you've succeeded at something. What were the factors that might have lead to this, and how can you recreate those factors? How can you create some guidelines so future you and other team members can continually solve this problem?

   3. If you cannot generate any options, "ladder up." Use Analogies / Find situations that are similar to yours. Example: Scientists look at a similar experiments when they are stuck with their current one. Analogies help because they don't require to generate an entirely new solution. If you don't find a solution, move up the ladder to a broader analogy. The "lower rungs on the ladder offer a few of situations very similar to yours..." and "a high probability of success" while the higher you go "offer the promise of an unexpected breakthrough...while a high probability of failure."

Reality Test Your Assumptions

when you analyze your options

1. Consider the Opposite

   1. Whenever you are considering something, always make sure there is team opposing the decision (after all, what's the point of a team of all yes-men). In legal systems, there is always a defense attorney. If you are running a business, have a formal team dedicated to oppose new ideas. While this may promote "bitter politics," have each side consider the opposite team's ideas, asking themselves "What would have to be true for this option to be the right answer?"

   2. Ask dis-confirming questions rather than questions that would confirm your own beliefs. If you shopping for a used phone, ask the seller if they've experienced any issues with it, how slow is it, rather than the things you'd like about it, like how much storage or how clear the resolution is. This just leans you more with the positives without giving you a accurate view of the negatives.

   3. Note: Dis-confirming questions work best when you ask someone who is more knowledgeable than you are; that person is more likely to provide you with accurate answers. However if you are a doctor and ask dis-confirming questions to a patient, the patient might lead you astray. The patient may not really know their symptoms, so you may end up leading the conversation in the wrong direction. They may also feel pressured to agree with you more. In this case, it is better to ask more open-ended questions. For example, a patient may be feeling "dizzy." Asking more open-ended questions may lead the doctor to find out that they are interpreting their depression as dizziness, rather than actually feeling dizzy from a disease.

   4. Consider the opposite by assuming positive intent. When you find the behaviors of someone disagreeable, consider that they actually have a positive intent, that they mean to do well. There might be things that you've failed to notice.

   5. Deliberately make a mistake. Think about key assumptions that you are operating on, and deliberately make a choice to go against these assumptions.

2. Zoom In, Zoom Out

   1. Take the outside view. Consider the experience of other people, and the base rates of those experiences (this is what we do when we look up Yelp reviews). It is more likely that our experience will be similar to other people, rather than thinking we're unique / special. How many times have you thought "that's not going to happen to me," but it has? Ask people who are aware of these rates, like experts, rather than asking them to "predict" (this will cause them to step into their inside voice).

   2. After that, take the inside view. Base rates / statistics can only take you so far. It's best for you to read the reviews in depth, or actually talk to some of the people who went there. To clarify, this does not mean to take the inside view inside your head. It is important to look close-up at empirical data. The Heath brothers say to pretend like you're looking into a photograph. When you're zooming in and out of the photo, you're not looking into your own head, you're looking more closely at the photo.

3. Ooch

   1. Ooch is to Get your feet wet rather than jumping head first to test your idea / hypothesis. Before you spend thousands of dollars on a new major, spend some time volunteering to see if you'd actually like the work. This is how I found out I didn't want to continue with occupational therapy. Find small ways to give your ideas a trial-run, for a limited time.

   2. Note: the above does not work for things that require real time and commitment. Ooching is for getting information, not for easing into something you already know you want or is right. If you are certain you need a degree, there is no point taking one class per semester; it would take too long. If however, you are not certain you need the degree, you should do informational interviews and take a few courses. Once you are certain, go full hog and finish up that degree!

   3. Instead of trying to predict something, test it. Don't guess when you can know and experience. Even experts are terrible at predicting things.

Attain Distance Before Deciding

in case emotions are high

1. Overcome Short-Term Emotion

   1. Sometimes people make bad decisions when they are gripped by "visceral emotion: anger, lust, anxiety, greed" (160). These emotions tend to go away overtime.

   2. The 10/10/10 rule can help us attain some distance from these emotions. Consider how would we feel 10 minutes after we made our decision, then 10 months, then 10 years?

   3. We're influenced by the mere-exposure effect, which says that the more we are exposed to something, the more we tend to like it. We become accustomed to it and feel more safe with it. Think about websites that track what you are browsing, and then remind you about them the next time you visit, under the "recently viewed" section. The more you're exposed to it, the more likely you may purchase it.

   4. We're also influenced by loss aversion, which means we view our losses more painfully than the elation we experience with our wins. Most people avoid a coin flip that would result in a 50/50 chance of either $100 win or $50 loss.

   5. Both the mere exposure effect and loss aversion tips us towards a status-quo bias, in which we prefer things as they normally are.

   6. To get away from our feelings associated with the status-quo, a company might ask themselves "What would our successors do?." A person might ask, "What advice would I give my best friend if they were in my situation?"

2. Honor Your Core Priorities

   1. Sometimes we experience very difficult decisions, not because of short-term emotions, but because they come into conflict with our core priorities that we were not originally aware of. For example, perhaps you've experienced having a hard time between picking two job opportunities because one of them reflects your ambition, while the other reflects your values in being flexible. In this case, the entire decision process may feel laden with heavy emotions.

   2. To attain distance from these situations, ask yourself what your "core priorities" are. What kind of person do you want to be? What is the best for you and your family in the long run? They should address your "long-term goals and aspirations" (179). You may not discover what your core priorities are until you come across these difficult decisions.

   3. Sometimes we are aware of our core priorities but we don't act on them. Think of the times you've pushed something back on your schedule, like playing a musical instrument, because you've had to do other things, like chores around the house?

   4. To get to our core priorities, we need to figure out what is getting in the way of us accomplishing them and "wage war" on them. Resolve those issues or figure out a system to make sure they don't come back. Or add them to our "stop-doing" list and forget about them entirely.

Prepare to be Wrong

after you've made your decision

1. Bookend the future

   1. People (including experts) are bad at predicting the future. However, we become more accurate when we view the future as a range, consisting of the lowest point (what's the worst that can happen) all the way up to the highest point (the best possible outcome). Use "Prospective hindsight," by working backwards from a certain future and generating explanations on how this future occurred (202).

   2. More specifically, for the lowest possible outcome, use the "premortem strategy." Pretend that, at some point in the future, you completely and utterly failed at a particular goal. Determine the factors that might have led to this failure and then address those factors. If your goal is do 20 push-ups by the end of the month, pretend that you can only do 5 (which is your current point). Why might you have failed? Maybe it'll be because you did not find time to do push-ups every day. Time to create a schedule and adhere to it.

   3. On the opposite spectrum, also use the "preparade" strategy. It is entirely possible that you'll be extremely successful instead. You need to prepare for "unexpectedly good outcomes" as well (206). Think about how Disney+'s show "The Mandalorian." After watching the show, so many people wanted baby Yoda merchandise, but there wasn't any available following the show (see here for more information).

   4. Engineers assume a margin of error and build a "safety factor" into their products. For a ladder that is supposed to support 200 pounds, they might build it to withstand for 1000 pounds (using a safety factor of 5), just to err on the safe side.

   5. Give yourself a "realistic job preview." Realistic job previews are when an employer sets the expectations for new hires by exposing them to a worst case scenario, and then asking them about how they would respond. This helps dispel the rosy impression the hire might have about the position and prepares them for the future. Research shows that turnover rate is reduced when employers take this approach. The authors say you can do this by imagining the scenario in which you follow through with your decision in order to prepare for it. I personally think that people should also ask other people what are their worst experiences (as related to the decision that they are about to make).

2. Set a Tripwire

   1. We spend a lot of time in autopilot and may not realize that a decision needs to be made. Think of it like driving down the freeway, but not realizing that you need to take an exit until you've passed it. This is probably why Google Maps warns you 2 miles in advance before you take the exit. Or think about a time when you just told yourself "let's just wait and see what happens," but you realize later you should have acted at that moment in time.

   2. To disrupt our autopilot, we need to set a tripwire.

      1. The simplest tripwire is setting a fixed deadline for a project, like the IRS' deadline for taxes in April.

      2. Another way is to set a condition for when you will take action. Let's say your grade in Art History is a consistent 90%, but you are worried that the next chapter will prove to be difficult. You may decide that, if your grades dip below 85%, that you will need to change up your study methods, maybe use flash cards and commit facts to memory.

      3. Another way is to set a partition. Let's say you received $100 for Christmas. You may decide that you will only spend $20 on micro-transactions of your mobile game. Instead of burning through your cash because of your terrible luck with loot boxes, you'll spend $20 on clothes, $20 on food, etc.

      4. The authors argue that setting these tripwires actually allow you to take more calculated risks more comfortably. You know that you will only need to take action when your grades drop below 85%, so in the mean time you can keep hanging out with friends or playing games until then. "In short, tripwires allow us the certainty of committing to a course of action, even a risky one, while minimizing the costs of overconfidence" (231).

   3. The above tripwires are set by a hard condition, or partition, or number. But sometimes they can arise from recognizing a problematic pattern. After seeing how many times your coworkers mess up with setting up a store page (and causing a large issue down the line), you realize that you need to schedule a proof-reading session before the next product goes live on the store. You've recognized a problematic pattern and decide it is time to act.

   4. This also goes for "unexpected opportunities". Sometimes there is an opportunity arises that you did not anticipate. If you recognize that there is an opportunity, then you have options to act and capitalize on those opportunities. You may see a particular item is being searched a lot on your online store and decide it is a good time to ask product design to start developing similar items.

3. Trusting the process

   1. If your decision was made with a group, then they "need to be seen as fair" (253). Decisions that are seen as unfair creates discord within the group.

   2. One way to do this is through "bargaining," in which you talk out the problem until a compromise between two groups can be reached. While this takes time, it will speed up implementation because both groups agree. In addition bargaining usually allows for better decision making (consider the opposite, anyone?).

   3. Allow for "procedural justice" which is to carefully listen to both sides, make a decision based on facts, allow people to challenge the decision, avoid bias, and "explain why the decision was made" (243).

   4. You can ease people into decision by making sure people perceive it as just decision. Do this by stating back the person's position so they feel understood. When a decision has been made, point out its flaws in order to show you understand their concerns.

   5. After all the advice from the authors above, they say that, while this process can be long winded, it can help people navigate through many of life's most difficult decisions. It can inspire a precious amount of confidence that allows people to "take bigger risks" and "make bolder choices" (253). Most elderly people regret what they didn't do, rather than what they did do.

After reading this book, I felt it was criminal for me not to share it with the world. The amount of relevant advice, backed by research and real-life examples, is compelling. I could not stop thinking about this book after finishing it, and how I could apply it to my current life. I hope you end up picking up the book and reading it on your spare time!