Deciding to be a better decision maker

Summary:

·      Make better decisions by understanding them. What makes a good decision? When is effortful decision making warranted

·      Know the problems in decision making that emerge from assumptions and predictions

·      When you have an important or novel decision to make, employ these simple tips to make better decisions.

Are you struggling to make a good decision?

Do you have trouble committing to a decision, or selecting from a range of options?

You are not alone - Decision making is something we do in every context of our lives, with the potential for life-changing outcomes. Yet what do we really know about how and why we make decisions, and how can we make them more efficiently and effectively?

What are the features of a high-quality decision?

A decision is about making a choice following some consideration - that is, evaluating and choosing what to do then acting accordingly.

Any decision is made up of the assessment of assumptions and predictions to define the optimal path forward.. Assumptions provide data about what makes up the context, the parameters and the basis for the decision. Predictions provide (imagined) information regarding what may happen, what outcomes might occur, and what the costs and payoffs may be.

A high quality decision is one that uses accurate assumptions and reasonable predictions as its basis. A great decision uses the most efficient process to get the optimised outcome. 

How are you at making decisions?

Most people would say they are pretty good at making decisions. Unfortunately, when people are actually tested, the quality of their decision making in most cases reduced to what you would expect only from chance. We find a range of ways to ‘get in our own way’ of making good decisions, mostly due to human nature.

For example, people inherently suffer from confirmation bias - when we want to believe that we are good decision makers, we can easily recall the good decisions that we have made and overlook the bad ones. We find information that agrees with our current belief. We are also encouraged by our agency bias and cause effect heuristic to believe that we control things that happened by chance - that good outcomes were chosen by us, yet bad outcomes were someone else’s fault or due to the circumstances. We look back and think that we have made good decisions when our decision had no positive outcome on the result. This means we fool ourselves regarding our decision making capabilities. Understanding decision making can help us let go of the unconscious ways we mess up important decisions and start focusing consciously on making better quality decisions.

When should I focus on decision making as a process?

We take so many decisions in our lives that concentrating on all of them in an effortful way would be inefficient – we can get to the same quality of outcome in many decisions with almost no effort. Repetitive decisions can simply be left to the unconscious and we can be confident - based upon the repeated use of these decisions - that we will get a reasonable (or even an optimal) outcome. The inputs are simple and the predictions are well known. You don’t have to overthink how to successfully scratch your nose, for example.

However, if the decision is important or novel - or happens in novel circumstances - using unconscious processes is likely to cause more errors that taking a more conscious decision making approach. ‘Trusting your gut’ is a poor way to make important or novel decisions. It is delegating important decisions to unreliable assumptions, biases, heuristics and cognitive filtering.

For important or novel decisions, it is always worth taking time to consider consciously the elements of the decision and overcome the heuristics and biases that can get in the way.

Issues with assumptions:

Some typical issues that we make in decision making relate to the assumptions behind the decision. These include:

·      Does the decision even need to be made?  Sometimes we assume the decision is ours to make, when in fact it has little or nothing to do with us. Belief in over-control leads to many decisions being taken that simply can be left alone.

·      Starting from the wrong place. When we think we know, rather than testing the data that we have available to us, we can often make a base decision. For example, if we assume that we know what someone else is thinking, we are likely to be making a poor assumption.

·      Misinterpret data and draw the wrong insights. For example: what does a graph showing vaccination rates actually show us? Unless we know how to interpret and ask good questions of the data, we can be led to believe all sort of incorrect things from which any decision will be poorly crafted.

·      Know rather than seek knowledge. Things change over time, and what was true last year (or yesterday) may be wrong. If it was raining yesterday, does that mean it will rain today? It is important to seek the true and current knowledge to base our decision upon, rather than believe we already know.

·      Suffer biases and heuristics which are natural human thinking errors. Common ones in decision making include availability, confirmation, cause-effect biases, to name but a few.

·      We often mix up what we control, what we can influence and what exists beyond our control. By focusing on what you can specifically control in a situation, it often simplifies decisions. We cannot control what others do or think, for example, but we can choose responses that positively influence them. Instead of making the decision massive, bringing it down to a simple next action that can be taken in something that you can control can allow forward momentum towards goals to be maintained.

Issues with predictions

We always face the issue that anything we predict is imaginary. We can use past experiences to model what may happen, but we can never truly know. Any change we make creates unpredictable ripples which affect our predictions in unexpected ways. Ensuring that we use reasonable (reasoned out) predictions based upon a range of potential cases ensures that we don’t make the error of ‘knowing’ the unknowable. 

We also need to ensure that we bring a realistic (rather than an overly optimistic or pessimistic) expectation to the situation. People get into trouble with decision making when they have a fixed expectation (expectation bias). Rather than beginning with a state of curiosity, starting with an overly positive or negative mindset will colour what we expect the decision to deliver. Often we give no thought to the nature of our expectation frame and simply let it colour our decisions unconsciously. This is a recipe for bad quality decisions and outcomes.

Understanding your risk profile will also be important - the more risk we are open to taking, the more comfort we will have in deciding then acting. A low risk tolerance might lead to so much discomfort that the decision is avoided, or that many options or potential choices are rejected before they are realistically assessed.

In cases where the decision is novel, we often have no way to imagine the potential outcomes.

This means it is difficult to decide on the potential benefit (or risk) of what we are about to decide. If we have no analogous thinking frames (what this decision may be like), then reducing the size of the decision (breaking it into smaller steps) can allow checkpoints to be put in the decision path. This means at any point the outcomes and effort of the decision can be reviewed and either modified, abandoned or maintained based upon what we are learning as we keep deciding.

People can also seek to avoid taking a decision (procrastinating) because they are at a point where they don’t like any of the visible outcomes that can be predicted. By recognising that not deciding is in fact a decision, we can sometimes see that not deciding can be even worse for us that the worst option in an outcome set. Not deciding between options often leaves the decision up to someone else or to chance - which means that the likelihood of you getting the best of the bad options will be reduced to chance (or worse!).

How should we make a good decision?

·      Start by attempting to understand the reason the decision is being taken.

·      Consider the assumptions regarding the circumstances and frames relating to the decision making

·      Check your predictions of what will happen should each option materialise

·      Understand your risk profile, expectation frames and biases for recruiting and using information.

·      Take the decision that is in your control

·      Take action and continuously test the path forward as it emerges.

If you want to learn more about decision making or get help making great decisions, contact me directly or via thebiggergame.com.au