How To Make Better Decisions
How To Make Better Decisions
Humans are consistently found, in study after study, to make less-than-rational decisions.
On top of that, we are surprisingly terrible at knowing what will make us happy, something that psychologists call affective forecasting.
These two tendencies come together when we’re facing a big decision: we’re trying our hardest to navigate a sea of uncertainty, seeking the greatest possible option with limited knowledge and a broken compass.
Here are some tools that will help you to make better decisions, so that you can better live a New Happy life. In this article, you’ll learn:
How to avoid the big errors that trip us up
How to cultivate a clearer understanding of what will make us happier in the future
How to recognize that life is much bigger than just one decision, no matter how big it seems right now.
How To Avoid The Big Errors
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” — Charlie Munger
Charlie Munger is the executive vice-chairman of Berkshire Hathaway. While he is less famous than his partner, Warren Buffett, he is renowned for his incredible wisdom. Charlie and Warren have been wildly successful in an industry that is all about good decision-making, so he’s a good authority for us to listen to. (Note: when taking advice from people about what to do, trust people who have mastered the process of decision making, not the people who have what you hope to gain as an outcome!)
To be not-stupid, we need to become aware of our cognitive biases, which are our brain’s shortcuts. These shortcuts are designed to minimize information overload, but often lead to errors in our thinking.
Here are a few of the most pernicious cognitive biases. The next time you’re making a decision, run through these as a checklist.
Confirmation bias
We tend to look for information that supports our selection.
Ask yourself: What information would support choosing the opposite way I’m currently leaning?
Selection bias
When we are making a choice, we consider the positive attributes of our options; but when we are rejecting an option, we consider the negative attributes. (Sometimes, a choice has both more positive and more negative attributes, which means that we would be likely to both choose it and to reject it based upon the way we’re looking at it.)
If choosing something, ask yourself: What are the negative attributes of this choice?
If rejecting something, ask yourself: What are the positive attributes of this choice?
The Distance Trap
When we imagine the future, we tend to picture a version of it that is smooth and easy and carefree. If we’re imagining moving to a new city, we invariably imagine a beautiful day enjoying its’ many delights - not a rainy day, waiting for a cab, in the middle of running errands.
Ask yourself: What does a typical or less than ideal day-to-day of this decision involve?
The Easiness Trap
While most of us have a very good idea of what makes us happy, or what might make us happy if we were to do it, we often don’t do it in favor of things that are easier!
We fall into the easiness trap when we make a decision based upon not what will make us truly happy, but what will be the easiest for us, cause the least amount of friction, or require the least amount of effort.
Ask yourself: Am I making this choice based upon how easy it is?
The Emotion Trap
Emotions are powerful, and they are necessary for decision-making (a fabulous book on this subject for those who are interested is Descartes Error by Antonio Damasio.) However, we need to be in charge of our emotions and ensure they are not in charge of us. Feeling extreme happiness, despair, fear, stress or pressure can lead to sub-optimal decision making.
Ever sent an email in a haze of anger which you then regretted? That’s the emotion trap at work. Ever said yes to something just because you were really happy? There it is again!
Ask yourself: on a scale of 1-10, how intense are my emotions right now? (If higher than a 3 or 4, take a break, reset, and revisit your decision later.)
The Accuracy Trap
We are bad at remembering how things in the past made us feel, which then leads to sub-optimal choices in the future.
For example, sometimes when I sit down to write, I really, really, really don’t want to. Despite having written for years and years, and knowing that it is pretty much a guaranteed route to happiness, it’s still somehow hard for me to remember that.
To counter this, we have to capture data that proves to us how we will feel once we just make a tiny movement. Make a list of the things that make you happy. Are they the things you tend to put off? What decisions have you made to avoid these things, when in fact you might want to move towards them?
Ask yourself: Will this decision help me to do more of the things that really do make me happy?
Goal #2: Be Wise
Once we’ve addressed the be-not-stupid part of the equation, we can turn towards trying to trying to be wise. A powerful technique for this is using mental models. We get used to seeing the world through one specific lens, but if we consciously try out a new way of thinking, we can gain insights or expand our understanding.
If you’re anything like me facing a big decision, you tend to run around asking everyone you know what they think about it, hoping that someone will give you a compelling insight or point you down the right path. This is not a good strategy. Not only is everyone else biased in their own way, but no one else can really make a good decision for us, because we have to figure out what our ultimate goals are, what makes us uniquely happy, and define how we want to live our lives.
Instead, try using the following mental models for your next decision.
Give advice to a friend
Take the ‘outsider perspective’ by asking yourself what advice you would give to a loved one who was in your situation. This helps us to have some distance from the decision, giving us an advantage in clarity and perspective.
What won’t change?
When we contemplate a big decision, we usually focus our attention on specifically the parts of our life that will change. Ask yourself what won’t change. It will show you how much of your happiness is likely going to remain consistent. In my case, this question helped me to see that my relationship, my friendships, my dog, my apartment, and my hobbies (all things that are essential to my happiness) would stay the same, no matter what job I chose.
Minimizing regrets
We have a tendency to not want to walk away from things we’ve invested a ton of time into, be it a job, a relationship, a city, or a hobby.
On the other hand, though, we tend to regret the things we didn’t do, as we always wonder what would have happened. Think about what you will regret if you make the choice and what you will regret if you don’t make the choice.
Find a surrogate
We’re unique, but not that unique: across the board, people tend to react very similarly to events and outcomes. Find someone who has gone through what you are contemplating - someone who moved from your city to that one, someone who moved from your company to that one - and dig into what their experience was like. Hearing their story, how does the decision feel to you? It’s more than likely that you will have a very similar experience to them. When studies ask people to use surrogates, they are remarkably accurate about predicting their own future feelings.
The elastic band (source)
Imagine yourself being pulled by two elastic bands, both stretched to the limit. One is holding you to the current state, while the other is pulling you towards the new outcome. Ask yourself, “What is holding me?” and “What is pulling me?”
Look at the big three
When we’re making decisions to optimize for happiness, we tend to overvalue an increase in money and in relaxation time, and undervalue the impact of relationships.
To counteract these, remind yourself of what I like to call the big three, some of the biggest factors for experiencing consistent happiness and meaning: 1) Being engaged in what you are doing on a daily basis, 2) Having positive relationships and spending time with the people you love, 3) Having more control over your time and energy and what matters most to you. Ask yourself how this decision will contribute to The Big Three.
Goal #3: Relax, Decide & Let Go
It’s easy to get caught up in paralysis by analysis when making a big decision. You might be tempted, as I have been in the past, to break out a spreadsheet, list out your alternatives, and assign a weighted value for each component of each option, coming up with some complex equation for choosing the right path. Math has the secret!
At the end of the day, this is just an attempt to bring some sort of control to what is ultimately an uncontrollable situation. Uncertainty exists, and nothing in life is guaranteed. We can imagine that a particular outcome will be great, but we can never be certain. We might value things right now that won’t be as important to our future self. And, what’s more, choosing the ‘best’ option doesn’t mean that things will magically work out in the future, nor that choosing the ‘worse’ option means that you are doomed to a life of unhappiness.
Yes, the decision is important. But it’s really what happens after the decision — the way you commit to it, immerse yourself in it, and think about it that matters so much more.
Luckily, we have something built in that helps us to cope no matter the outcome of a decision: once we’re committed to a path, we have a tendency to have a positive outlook and derive happiness from it, even if it was initially a less-than-desired outcome. Once we are stuck with a decision, we tend to see it as ours and to take ownership over it, which helps us to find the value, positives, and learning opportunities from the experience.
That’s my final piece of wisdom: don’t linger on a decision too long. Set a date by which you will decide, commit to the decision, and let the rest of your life unfold. No matter what happens, you will be okay.