Want to Become Good at Decision-Making? Here Are the Seven Secrets!
Are you worried about making the wrong decision? Want to improve your decision-making skills? Here are the seven secrets that can help you.
We make countless decisions every day.
From what to eat for dinner to what show to watch on TV, we rely on our gut feeling to choose one option out of all the possibilities. When it comes to making critical decisions, however, we’re stuck. Questions like What career change should I make, or Should I move to another city can torment you for months without a clear decision in sight.
Fearing for the worst outcome, our minds are tangled up with all the pros and cons, unable to decide what is our best option. In this article, I’ll show you the seven secrets that can help you make better decisions in tough situations. They are:
1. Identify the core problem you’re solving.
2. Focus on gaining rather than losing.
3. Know what is important to you.
4. Aim for good enough.
5. Quantify the pros and cons.
6. Consider the cascade of consequences.
7. Evaluate the outcome of your decisions.
Identify the core problem you’re solving.
When the stakes are high, people tend to collect more information to help them analyze their situation. For example, when a primary care doctor sees the same patient present with the same symptoms three times in a row, he/she is likely to order more tests and imaging studies to find the clues to the patient’s puzzling clinical presentation. When these tests and scans fail to pinpoint a condition, the doctor faces an even bigger challenge to diagnose the patient’s symptoms.
What happens next may sound familiar. The said patient is referred to a specialist who then diagnoses the patient promptly and proceeds with a treatment plan. Comparing to the primary care doctor, what makes the specialist much more efficient in diagnosing the patient?
The answer rests in the different approaches the two physicians use. The specialist focuses on the patient’s original symptoms to find a probable cause, while the primary care doctor complicates his decision-making process with much more unnecessary information.
The point here is, more information isn’t always helpful. When you face a hard decision, identifying the core problem can help direct you in the right direction.
For example, you’re debating what city to move to for a lower cost of living. You may spend a lot of time thinking about the distance away from your parents, the safety, job opportunities, school system, transportation, lifestyle, and culture in the area.
While there are many relatively inexpensive cities to choose from, the intercity differences in each of the above factors make it almost impossible to decide.
To avoid being stuck in decision paralysis, identify the key problem you’re facing is to lower the cost of living. Based on your current income, calculate the minimum and maximum amount of money you can afford for food and shelter while living comfortably. Eliminate cities that are outside your range.
Next, estimate the cost of moving that works for your budget. Eliminate cities that are too far or too difficult to relocate to.
After these two rounds of elimination, you should see a reasonable reduction of your choices. The next step is to arrange all the remaining cities by physical distance from your current residence.
The rule of thumb is, the closer a city is to you, the easier it is to travel to (which makes it easier for you to visit your parents and vice versa), and the more likely to have a similar community and lifestyle to your current one. Depends on your personal preference, you may further narrow down your list based on other factors that are particularly important to you.
Focus on gaining rather than losing.
Too many times, we make decisions out of fear. This Inc article shows us a typical internal dialog in this situation: “I feel like I need to [perceived action]. If I don’t do [perceived action], then the outcome is potentially ______. And that makes me feel ______.”
Knowing your decisions are coming from a place of fear, risk, or safety can help you determine whether the perceived action is logical. Daniel Kahneman, the Nobel prize-winning psychologist and economist, found that humans feel twice the urgency to avoid a potential loss than they do to achieve a potential gain.
When we’re fearful, we subconsciously make decisions to safeguard our potential losses while ignoring opportunities. This can be detrimental to our long-term growth.
How to strike a balance between taking risks and preventing losses?
The first thing to do is to evaluate your past failures. What factors caused those failures? Are these factors present in any of the options you face? If the answer is yes, remove that option. You don’t want to make the same mistake twice.
Next, examine your remaining options to see which one leads to more gains. Rank them from low to high in terms of benefits.
Then rank all your options from low to high based on the level of uncertainties. Now you have two lists, pick the option with the highest gain and lowest uncertainty as your final decision.
One thing to remember, though, no one can predict the future. The best we can do is to make an educated guess based on the information we do have and go from there.
Know what is important to you.
Here’s a story I heard as a child: A deer wants to cross a river but worries if the water is deep. An elephant walks by and tells him the water is very shallow. A goat walks by and says the water is very deep. Facing two different opinions, the deer decides to test it out himself. He finds the water level was just right!
As you can see from this story, other people’s advice might not be useful for making a personal decision.
First, they are not you. What they see as important might not be what you value. Their measuring criteria are different from yours.
Second, they don’t face the same emotional stake as you do in most of your personal decisions. A classic example of this is to decide whether to marry someone. Your feeling toward this person plays a vital role in your decision-making, but others can easily discount that emotion and make a recommendation without giving it any thoughts.
Because you’re the one who is facing the consequence of your decision, you have to decide for yourself whether your life will be better with this person. Think long term, consider your compatibilities, and ask yourself if you’ll still love this person even if he/she gains 70 pounds and loses half of his/her teeth and hair.
Sometimes, people get into a relationship to compensate for something they lack or hate within themselves. This is a one-way ticket to a toxic relationship because it makes your love conditional.
Is your relationship built on trust and mutual respect? If not, it might not be wise to rush yourself into a marriage that could hurt you years down the road.
Don’t make decisions just because others pressure you to do so. Your choice affects your life, not theirs.
Aim for good enough.
A big problem people face when making decisions is that they want everything to be perfect. In my book, The Art of Good Enough, I dedicated an entire chapter to why aiming for perfection can hurt you in the long run. Perfection is like infinity; it’s a great concept but impossible to reach. Don’t put off making a decision because you want a perfect one. Inaction can cost you dearly.
Harvard Business Review says good CEOs realize that a wrong decision may be better than no decision at all. Former Greyhound CEO Stephen Gorman, who led the bus operator through a turnaround, said, “A bad decision was better than a lack of direction. Most decisions can be undone, but you have to learn to move with the right amount of speed.”
James Waters, the former White House aide, Navy SEAL, Harvard Business School graduate, said this about imperfect data, “Being able to make decisions when you know you have imperfect data is so critical. I was always taught that “A good decision now is better than a perfect decision in two days”.
If you face analysis paralysis, learn from Jerry Bowe, CEO of the private-label manufacturer Vi-Jon by asking yourself these two questions: First, what’s the impact if I get it wrong? And second, how much will it hold other things up if I don’t move on this?” This approach helps his team members to trust their own judgment on operational decisions.
Quantify the pros and cons.
Most people start their decision-making process by analyzing the pros and cons of each option.
Two pros may sound better than one con, but in reality, the effect might just be the opposite. For example, you’re deciding between two job offers. One job comes with slightly better pay and vacation time, while the other has a better office culture.
If you take the offer with better pay, you may not enjoy your work experience and end up quitting within a year. On the other hand, if you choose a better work environment, you’re likely to get a promotion within a couple of years.
How do you weigh the pros and cons to ensure a sound decision?
Pugh Matrix is a free interactive decision-making tool that can help you solve the problem.
For example, Martha is a job recruiter. She needs to choose between five candidates: Joe, Joanne, Steven, Mike, and Sandra. She evaluates the candidates according to the following criteria:
relevance of education,
relevance of experience,
evidence of strong performance in their previous job,
experience in sales,