Archive for June, 2012

Making Big Decisions: My Approach

I’m facing a big decision and I want to make sure I’m making the right decision. I’m usually quite good at making decisions quickly and decisively (I’d be the first to admit they aren’t always right). However one decision has been causing me trouble and chewing up a lot of my brain space. So I decided to spend a morning writing down a framework and approach that I will use to make this decision and future big decisions. The idea being that at the end of this I will have a decision making framework that will help me (1) to avoid making the same mistake twice and (2) evolve it overtime to make better and better big decisions in the face of greater and greater uncertainty.

Overall philosophy: When it comes to any decision with unknowns I believe that your conscious, rational brain cannot find the answer alone. Your conscious, rational brain is useful for processing the information at hand, attempting to remove biases but its ultimate responsibility is gathering and preparing this information for the irrational, emotional part of the brain. It is your subconscious, irrational and emotional brain that is the ultimate (and best) decision maker when faced with many unknowns.

I’m not alone in thinking like this. Many scholars that study big strategic decisions in business think like this, for example, take a read of something from Daniel Kahneman. You can listen to actor and comedian Stephen Fry talking about the feeling behind a decision.

So to come up with a “Making Big Decisions Framework” will require a process that guides the mind through use of the best of the rational brain with the best of the emotional brain.

Phase 1: Process everything.

This phase is about processing all the information at hand in as many ways as possible and processing the information in a way that digs into your subconscious or emotional responses to the decision. To ensure you have done this properly you will probably need to do the following:

  1. List your instincts.
  2. List and describe your alternatives (see Lifehacker for a very analytical way of doing this).
  3. List different ways of looking at the decision.
  4. List the risks
  5. Use Jeff Bezo’s regret minimisation framework (do the thing that will leave you with the least amount of regrets)
  6. Write down what happened last time you were in a similar situation.
  7. Assess each of the above.
  8. Assess your emotions, your emotional responses to the above and your biases
    See HBR blog and see Stephen Fry’s comments on really understanding how you feel about something.

Phase 1.a: Consult others.

[Edit: made this a separate section, in an early draft it was, then it wasn’t, now it is – it’s important – thanks Dave]

Now that your thoughts are straight, start gathering the opinions of others. This is a very important step, if done correctly it can enable you to stand on the shoulders of giants, see through the eyes of someone that has been in a similar situation.

However, if done incorrectly it can lead you a stray. Here are a few things to remember when consulting others:

  • Others have biases and approaches that they prefer – ask yourself “why have they said that? why do they think that way? why have they arrived at that statement?”
  • You may have presented information to them in a way that has made them respond that way.
  • It’s easy to be commentator. It’s a whole other ball game being on the field.
  • Ultimately you need to decide, not someone else.
After going through Phase 1 you might have some idea as to what your decision will be – then again you might not. Regardless, you could go through the above again or you could move onto phase 2.

Phase 2: Take timeout.

There are good reasons for taking timeout. First, if you can’t reach a decision doing so will allow your subconscious brain to mull over everything you did in Phase 1 and maybe produce an answer for you.  John Cleese does a better job of explaining it than I do.

Second, if you are feeling pressured taking timeout will give your brain the space it requires to think freely and taking timeout might make you realise the outcome of your decision probably won’t lead to your end. Again, John Cleese does a great job of explaining this.

After you’ve taken some timeout you might go back to processing more information or you might be ready to make the decision. Either way, it is important to be very clear in your mind about what you want from life – what is the bigger picture within which this decision fits?

Phase 3: Make the decision.

Make the decision, write your decision down and write down why you have chosen to make that decision.

I’ve always found that doing this I will either say “yep that’s the one” or “wait, now that I see it in writing it this isn’t what I want.” If you thought the latter you’ll probably want to go back through Phases 1 and 2.

If you’re still stuck flip a coin. My father-in-law will fondly recount stories of Board meetings where, when the Board couldn’t reach a decision he would flip a coin. They would either agree with the wisdom of the enlightened coin or they would disagree, thereby knowing the right decision is the one not suggested by the coin.

Phase 4: Decision made. Don’t look back.

Once a decision is made you can’t look back. You must give the decision 100% of your focus and effort.

It is important to remember it is impossible to know the right answer and maximise your return on the decision. There are often too many unknowns. Instead, carrying the decision through will quickly reveal whether it is worthwhile. Nothing is set in stone, it is more important that decisions are made quickly and decisively… then corrected quickly if they turn out to be the wrong one (this is the subject of another post).


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