On making decisions

On Making Decisions

(Two months ago, I was interviewed via email by columnist Dinkar Nepal on the craft of making decisions. For what it was worth, here is that interview.)

ON MAKING DECISIONS

DINKAR NEPAL: When it comes to making decisions, do you use any model or framework?

ASHUTOSH TIWARI: Over the years, through trial and error, I have learnt to fix decisions that are mind-numbingly routine: what I do in the morning hours, what I eat for breakfast, how many ounces of water I drink in a day, how many words I write a day, what type of clothes I normally wear, and so on and on.

There is no point spending valuable mental and emotional resources every day, agonizing over these ordinary, almost commodity-like decisions. Routinizing these decisions has left me, I think, room and energy to tackle inevitable surprises and unfamiliar situations that come up in the course of work and life through the day.

QUESTION: Do you consider other people’s inputs?

ANSWER: There are people and authorities whose judgment I trust on specific matters, simply because they have had the experiences that I seek. For example, for more than two years, I was thinking of buying an electric car. I ended up speaking to seven different car owners, and learnt of their positive and negative experiences. I took about 18 months to slowly gather all other related information before I finally bought the car. This is one example which required considerable deliberations.

But I have learnt that asking people questions gives me insights to knowledge that help me improve the quality of my decisions. Most of these insights would probably not have occurred to me had I just tried to decide alone on complex matters. In a way, in these complex times, when we have to account for many variables at once, making decisions has become a social process, sort of like writing an academic paper: you consult the relevant literature first to benefit from the results of other people’s thinking with regard to what you want to publish.

QUESTION: How do you identify risks?

ANSWER: All decisions pose risks. I am OK with that. But you don’t want to make decisions that are likely to result in, say, the loss of a human life, or lead to complete and utter financial or reputation-related ruins. Following the Stoics, I have learnt to ask myself: “What would happen if the decision turned out to be utterly wrong, and, if so, could I live with that real or imagined consequence?” If the answer is yes, I make that decision.

Over the years, I have also learnt to focus a lot more on the process of doing things and getting that ‘doing’ process right, without getting married to the outcomes or to the results, which can be random and arbitrary. I have also learnt to appreciate my own “ocean of ignorance’, so to speak, that surrounds, say, a tiny island of knowledge in my head. As such, I ask myself: “What am I missing or not seeing when I make this decision? What do I need to read or learn or who do I need to talk to reduce my own ignorance on this matter?” Asking these questions does not eliminate risks altogether, but it helps mitigate them.

QUESTION: What do you do when you realize you have made mistakes?

ANSWER: As a practicing manager, I see decision-making as a craft. And a craft can be practiced to improvement every single day. The more decisions you make, the more mistakes you will make. But the more you reflect on the quality of your decisions and learn from them, the better you get over time as a decision-maker. As such, I see that making mistakes and learning from your and others’ mistakes a an integral part of being a better decision-maker.

That said, following [former US Treasury Secretary] Robert Rubin’s example, I try not to judge a difficult or a complex decision by the outcome it produces. I try to judge it by the quality of the thought process that went into making that decision. For instance, there are many areas of life where you can do everything right and still get wrong or unwanted results because the results are never really under your control, no matter how certain you are about this or that input variable.

Still, most decisions I make are (thankfully) not wrong in a big, cosmic sense; they just need regular check-ins, nudges and course corrections so that they give the desired outcomes. I suppose this is what much of management really is: making course corrections to decisions.

QUESTION: What are some of the examples of major decisions you took?

ANSWER: Who you marry is one of life’s most important decisions. In my case, I decided to marry the person who I thought was the kind of person I wanted to be. Over the years, I have learnt a lot from my wife.

Likewise, some 15-20 years ago, I decided to push my younger brothers to pursue education abroad even when our family did not have the money to pay for their education. But that push has paid off: they completed their education and are now doing well as professionals. More than two years ago, I joined a private-sector manufacturing company after an enjoyable stint as the head of a development agency. Before making that transition, I had to be comfortable with my own ignorance while trusting my learning ability. So far, this change has sharpened my skills, added to my knowledge and given me networks that have both broadened and deepened my abilities.

QUESTION: Any theory, model, guidelines, anecdotes that you have studied or come across in the field of making decision?

ANSWER: Much of my learning in this field has come from reading, talking to people who are much smarter than I am, and quietly observing the results of my own decisions. I have long been a big fan of Warren Buffet’s partner Charlie Munger and his various mental models.

From what I little I know about neuroscience and behavioral economics, I have learnt that logic and rationality can take one only up to a point, and that emotions and biases have an important evolutionary role to play when we make decisions. Probability was a course to pass when I was a student, but now I see its significance in all that I do these days. Similarly, as a matter of temperament, I have a much greater respect and tolerance for ignorance, randomness, ambiguity, chance and luck now than when I was younger. THE END