Making Decisions When You Don't Know What to Do
Uncertain outcomes and imperfect data make it tougher to decide. A decision starts with a choice, which is an opportunity to select from two or more options. A decision is cutting off options and narrowing it down to just one. This is harder to do in novel, high-stakes situations.
Even the most rational decision-makers have cognitive biases and limited data. Collective wisdom also has drawbacks, especially when group members think alike or pressure each other to conform.
Making good decisions starts with knowing what you really want. Your true desires are based on your core values, beliefs, and intentions. They are inner directed. But as the French philosopher Rene Girard noted, our desires are mostly mimetic; that is, shaped by what others want or what we think others want.
In his book, Wanting, author Luke Burgis builds on Girard’s Mimetic Theory of Desire. He recommends the anti-mimetic path to evaluate options and make independent judgment. Go with thick desires, which are core motivational drives, patterns and themes that are meaningful and enduring to you. Thin, mimetic desires are fleeting and lead to less fulfilling decisions.
Of course, decisions are not based purely on logic and intrinsic value. We are social beings. We consider the wisdom of crowds, experts, role models, friends, family members, and all. Social utility - value based on what others like and have chosen – affects our decisions.
We can feel indifferent or confused about options when it’s not clear which is best. But big decisions can have ripple effects on ourselves and others, in the present and in the future.
How do we minimize risks and maximize rewards in making important decisions?
Welcome to The Incrementalist. My name is Dyan Williams and I’m your productivity coach in making big changes with small steps.
Professors Michael O’ Brien, R. Alexander Bentley and William Brock say you need to know where you are on the social behavior map in decision making. They provide a four-part, two-dimensional map in their book, The Importance of Small Decisions.
The horizontal, east-west axis of the map represents learning, whether individual learning or social learning. The vertical, north-south axis represents the extent to which there is a transparent connection
between your decision and the consequences of that decision. Consequences are costs and payoffs.
The four quadrants of the map include northwest, northeast, southwest and southeast.
Northwest is individual decision-making with transparent payoffs.
Northeast is social decision-making with transparent payoffs.
Southwest is individual decision-making with opaque payoffs.
Southeast is social decision-making with opaque payoffs.
Northwest is where you make individual decisions independently and the rewards are clear. There is rational choice based on intrinsic utility. An example is buying a smart phone that you value personally because it has all the features you need.
Northeast is where you make socially-based decisions and the rewards are clear. There is informed social learning based on both intrinsic and social utility. An example is when people started to buy iPhones in 2007 because they saw someone else using a new iphone, with its convenient touchscreen and downloadable apps.
Southwest is where individual learning is high, but the rewards are unclear. There is no transparency among the options and there is no opportunity to copy others’ decisions. Because you are overloaded with too many options, you just resort to guesswork.
Southeast is where social learning is high, but the rewards are unclear. You have no best option, but only a most popular option for the moment. Because you are poorly informed, you just copy others’ decisions.
How do you keep moving as far north as possible on the map to make better decisions? How do you avoid too much guesswork or just mimicking what others do?
The first way is to embrace wicked learning environments. You welcome uncertainty. You see it as an opportunity to explore possibilities, get curious and build on your skills.
While you can exercise conscious intent to decide which of the options to choose, you do not fully control which options you have in the first place.
Alan Watts, a British-American philosopher who interpreted Eastern wisdom for a Western audience, said, “You do not know where your decisions come from. They pop up like hiccups.”
On decision-making, Watts said, “When we think of causality, we think chiefly of the way events are determined by their past. It’s as if events were a lot of marbles and they’re thrown together and they knock each other around. And therefore, in tracing the movement of any particular marble, we try to find out which other marbles knocked it. And, so, trace it back and back and back.”
Watts explained it’s more effective to view events in relation to present patterns. You understand an event not by what went before it, but by what goes with it. Consider decisions and outcomes as part of an ongoing, cyclical process.
David Epstein, in his book Range, Why Generalists Triumph in a Specialized World, explains that most industries are complex and unpredictable.
There are wicked learning environments where data is messy, the rules of the game are unclear, and feedback is delayed or misleading. There are hardly any repetitive, obvious patterns to follow. Luck, chance and randomness play a big role. The correlation between outcomes and decisions is ambiguous, deceptive or non-existent.
Tiger Woods specialized in golf from an early age, while Roger Federer played soccer, squash, basketball, tennis and handball, before he started focusing on tennis as a teenager. Exceptional early focus is not often necessary for success, which depends largely on context.
Epstein writes, “The world is not golf, and most of it isn’t even tennis….much of the world is ‘Martian tennis.’” “You can see the players on a court with balls and rackets, but nobody has shared the rules. It is up to you to derive them, and they are subject to change without notice.” End quote.
Unlike kind learning environments, wicked learning environments do not reward specialization. They demand relational, analogical thinking. Look for conceptual similarities in different domains and skillfully apply your knowledge in one area to new areas. You take the new and make it familiar or take the familiar and place it in a new light.
Flirt with your possible selves. Your personality can influence how you respond to a situation, but different parts of your personality shine more in given situations. You might be assertive in one environment, but timid in another. Personalities change with time, new experiences, and different contexts.
Avoid the Plan and Implement model, where you make long-term plans and execute without deviation. Use the test and learn model instead. As you learn, you finish the project or leave it undone, keep or alter plans, and persist or quit.
Beware of survivor bias. This is a cognitive, selection bias where you only observe a subset that has succeeded. Survivors can be very lucky or may have the resources to keep moving beyond their many mistakes and setbacks.
The southwest quadrant of the map is where you do a lot of guesswork in your decision-making. If you’ve never tasted apples and oranges before, it’s hard to know which fruit to pick, especially when no one is around to tell you what they like. So you go with your gut and make random choices. You can’t make a rational, informed decision when you don’t know what either fruit tastes like and which would meet your preferences and needs.
To reduce guesswork, get an outside perspective. But don’t be fooled by expertise, especially when it comes to wicked problems. The advice could be context-driven, and not universally suited for all domains or for your situation.
Seek out fox experts. They are not vested in a single approach, but integrate diverse information and viewpoints to make more accurate predictions. They see complexity in what others mistake for simple cause and effect. They understand when relationships are probabilistic and not deterministic.
Hedgehog experts are deep, but narrow. They use one tradition or one specialty to solve a narrow problem. They tend to see deterministic rules of cause and effect framed by their area of expertise. They often lack the range to apply multiple disciplines to broad, wicked problems.
The southeast quadrant of the map is where you blindly copy advice from experts or automatically adopt popular opinions. The wisdom of crowds exists only if there is diversity of thought within the group and groupthink is discouraged.
Instead of getting stressed by uncertainty, you explore it with a sense of play and curiosity. Just because someone chose one apple over another doesn’t mean you should do the same.
The second way to make better decisions is to create a kinder learning environment. You reduce uncertainty. You chunk down the big question into sub-questions and the big decision into smaller decisions.
That way, you have provisional rules that are simpler, clear and known. You get feedback on which actions produce better results. You take note of any correlation between your decision and outcomes.
To create a rewarding life, we make decisions that carry risks. It’s easier to navigate uncertainty with an organic, step-by-step process, instead of with forced, giant leaps. For more, check out my book, The Incrementalist. You can find it at leanpub.com/incrementalist. The link is in the show notes.
Now here are three methods you could use to make the environment kinder and more predictable:
Method 1 is the OODA Loop, which involves four main steps:
Step 1 is to Observe – gather current and accurate data from many sources as practically possible. Gain situational awareness through new information and ongoing feedback.
Step 2 is to Orient – analyze the data and use it to interpret the situation and update your understanding of the problem. Culture, genetics, analytical abilities, past experiences, and new information affect how we view and orient ourselves in any situation.
Step 3 is to Decide – determine the optimal course of action. This is your best hypothesis or educated guess, based on your observations and your orientation. Your decisions are works in progress and responses to what you learn.
Step 4 is to Act – follow through on your decision. This is where you implement your chosen course of action without further delay. Once you act, you test, experiment, and learn. Then you cycle back to the Observe stage and repeat the process.
US Air Force Colonel and military strategist, John Boyd, is credited for developing the OODA Loop. The four-step process is a watered-down, simplified version of his model. Instead of taking the inside view and relying on what worked in the past, you improve your field of vision.
The OODA loop is circular, not linear. The faster you cycle through each stage, the better your decisions will be. You quickly collect data, interpret it and decide what to do with it.
Method 2 is the 5Cs framework: clarify, communicate, choices, check in and consequences.
Clarify what is most important to you. Separate your true desires from your mimetic desires.
Identify 3 to 5 core values or common themes in your life. What experiences do you find most fulfilling and memorable?
Communicate to others who are involved in the decision making. Share your needs and wants and listen to what they need and want.
Choices should involve a broad range of options. Avoid either/or thinking.
Check in with family, friends and trusted sources to ask for their ideas and feedback on your decision making.
Consider the Consequences, including the trade-offs, immediate costs and long-term effects.
Social innovation leader Abby Davisson and labor economist and Professor Myra Strober describe the 5Cs method in their book, Money & Love: An Intelligent Roadmap for Life's Biggest Decisions.
Method 3 is MAP, which stands for Mediating Assessments Protocol. Daniel Kahneman, author of Thinking, Fast and Slow, codesigned this structured approach to making strategic decisions.
In the book, Noise: A Flaw in Human Judgment, Dr. Kahneman and his co-authors note that our cognitive biases and noise (such as irrelevant data) negatively affect our judgment. Even the time of day and our mood and stress level influence our decision-making.
MAP reduces noise in five steps:
1. Agree on the selection criteria you will use to make a decision.
2. Choose the independent and relevant factors to consider in your selection criteria.
3. Objectively seek information addressing each factor, such as qualities, dimensions, features and attributes in each option.
4. Discuss and debate each factor separately based on the information gathered, including disconfirming evidence.
5. Reach a final judgment after discussing and debating each factor separately.
Big decisions require evaluative judgment, which relies heavily on intuition. Your gut-level thinking must be well-informed. Break up the problem into fact-based elements and postpone the use of your intuition until the end.
Decision-making tools like the OODA Loop, the 5Cs and MAP activate System 2, slow thinking, which is strategic, deliberate, and logical. They postpone System 1, fast thinking, which is reactive, emotionally-driven, and intuitive.
In the last episode, I talked about choice overload and cognitive bias as 2 pitfalls in decision making. The need for certainty, to feel right, is the other pitfall. When making big, complex decisions, we need to tolerate and welcome uncertainty. No matter how much System 2 thinking we do or believe we do, we still could be wrong.
Or we could make the right decision for short-term gains. But fail to pivot in time to offset major tradeoffs and losses. Rather than dwell over whether a decision is good or bad, keep moving north in dynamic environments, and learn to make them kinder, step by step.
To dive deeper on the incrementalist approach to productive living, you may contact me for coaching or speaking events.
If you have feedback or topic ideas, drop them in the comments section of the YouTube channel or send me an email at email@example.com.
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