Decision Discipline
This year for many of us has been one of reflection and contemplation. Times of stress are perfect opportunities for people, companies, and industries to learn from the results of prior decisions made. It’s easy to fall into the trap of regret when thinking about decisions that didn’t work out. We all know we should live by the motto “you win or learn,” but to see the world this way requires a certain degree of optimism about the future. Being optimistic in 2020 is especially difficult while the world around us continues to focus on all the bad things that are happening.
As I write this, the stock market is down over 600 points and falling further. This negative sentiment reflects a group of investors that continue to worry about the election, COVID, unemployment, and a host of other issues. Worrying can be addictive, but we all know there isn’t a single problem solved by worry. We each control our own decisions. These daily choices are the only power we have to make our lives more prosperous and successful.
It might be surprising to learn that psychological research clearly recommends we limit the quantity of our daily decisions, and structure our day intentionally to focus on the most important decisions first. Failing to follow these recommendations results in what scientists dubbed “decision fatigue” in 1998.
In a 2011 study of prison parole judges, several interesting observations were made that are relevant to the decision-making process:
“…the likelihood of a favorable ruling is greater at the very beginning of the work day or after a food break than later in the sequence of cases.”
“We have presented evidence suggesting that when judges make repeated rulings, they show an increased tendency to rule in favor of the status quo. This tendency can be overcome by taking a break to eat a meal, consistent with previous research demonstrating the effects of a short rest, positive mood, and glucose on mental resource replenishment.”
In another study from 2017, researchers studying stock market analysts learned the following:
“Analysts cover multiple firms and often issue several forecasts in a single day. We find that forecast accuracy declines over the course of a day as the number of forecasts the analyst has already issued increases. Also consistent with decision fatigue, we find that the more forecasts an analyst issues, the higher the likelihood the analyst resorts to more heuristic decisions by herding more closely with the consensus forecast, by self-herding (i.e., reissuing their own previous outstanding forecasts), and by issuing a rounded forecast.”
Jeff Bezos, the world’s most successful entrepreneur, made the following comments in 2018:
“As a senior executive, you get paid to make a small number of high quality decisions,” he told Economic Club president David Rubenstein. “If I make, like, three good decisions a day, that’s enough. And they should be as high quality as I can make them. Warren Buffett says he’s good if he makes three good decisions a year.”
Jeff Bezos battles decision fatigue by focusing on 8 hours of sleep each night, then builds “puttering time” into his morning for drinking coffee, reading the newspaper, and having breakfast with his kids. He usually doesn’t conduct his first meeting until 10AM, but prioritizes his meetings so that all of his “high IQ” decisions are made by lunchtime. You can hear his comments in context here.
I’m sure we’ve all been in organizations that lacked decisiveness. Decisions can’t be avoided, and in fact are the oxygen that sustain progress. Making decisions should be a deliberate, mindful process structured intentionally into your day. Some lead to success, others to failure. Regardless of your past results, keep moving forward. Your next decision could be your most successful!