(TED) 3 Ways to Make Better Decisions – by Thinking like a Computer

“Computer science can help to make us more forgiving of our own limitations.”

He start by giving an example of finding a place to rent or buy in Sydney is difficult. In the competitive market, making an offer means you might lose out on a better option. The house hunting dilemma is an example of an “optimal stopping” problem.

Computer scientists have a solution and it goes like this. In order to maximize the probability of finding the best possible home, look at 37% of available accommodations and make an offer on the next place that is better than any you’ve already viewed. Or look for 37% of one month, 11 days, “to set a standard,” and then choose the best available option. 

The methods computers use to solve problems mimic how humans make decisions. Thus, applying computer science to everyday problems improves human decision making.

For example, choosing a restaurant employs what computer scientists call the “explore-exploit trade-off.”

Do you try something new (explore) or stay with something familiar (exploit) ? If you’re in an area for a short time, pick the exploit option. However, if you’re dining in your neighborhood, explore to gather information that will inform future choices.

“The value of information increases the more opportunities you’re going to have to use it.”

Babies explore by tasting every new thing they encounter. Meanwhile, the old man who goes to the same restaurant and orders the same thing each time is exploiting a lifetime of knowledge.

“Human lives are filled with computational problems that are just too hard to solve by applying sheer effort. For those problems, it’s worth consulting the experts: computer scientists.”

Computer science can even help you organize your closet. Most computers have a fast memory system with limited storage and a larger slow memory system. The most recently accessed data gets stored in the fast system, and the computer makes space by tossing something old into the slow memory system. Apply this principle to sorting your clothes by discarding items you haven’t worn for a long time. This convention works in the office, too. You’ve likely stacked that messy pile of papers on your desk according to how recently you used each document, with the most recent file sitting atop the pile.

“Computer science can help to make us more forgiving of our own limitations.”

These might seem trivial, but computer science also can help with life’s more difficult decisions. “The best algorithms are about doing what makes the most sense in the least amount of time.” Algorithms streamline information making it more manageable, and computers break big problems into smaller, simpler steps. The best approach such as the 37% rule of house hunting might produces the best solution given the circumstances.

Your choice may not be perfect.

It may overlook some options or involve settling for a satisfactory solution. But doing so is “what being rational means.”

(Life Principle) Making decision for the group

I was harsh, I was cold, I was brutal … but then … I will be BETTER…

Its tempting to think and assume that with a bit of experience and knowledge in a certain field, we could and would be able to make decision for everyone in the group.

However, it’s could be fine in certain situation, it might not be the best solution.

According to the Qur’an, there’s a need to consult everyone involved for the affairs of the moment. Its better for the team harmony.

Surah Ali’ Imran Verse 159

It is part of the Mercy of Allah that thou dost deal gently with them. Wert thou severe or harsh-hearted, they would have broken away from about thee: so pass over (Their faults), and ask for (Allah’s) forgiveness for them; and consult them in affairs (of moment). Then, when thou hast Taken a decision put thy trust in Allah. For Allah loves those who put their trust (in Him). (Quran 3:159)

Some of the reason why its dangerous to rush to a decision is the fact that

  1. We might not have all the relevant information and background story
  2. We didn’t know what the perspective of everyone else
  3. We might think we know best, but, as Ray Dalio puts it, ‘How do you know you’re right?’

Well, when I was younger (and much more dumb) I believed I was right all the time, and most the time I am right, but since I’ve began my reading spree, especially on Ray Dalio’s The Principle, I’ve decided to keep a list of my decision (online) and why I made such decision. So that I could learn from my mistakes, and the mistakes of others, as well as improving myself.

Since the cold truth is, I wasn’t going to be always right, neither am I always wrong. But I can always learn and by doing so, I’ll grow to be better.

I was harsh, I was cold, I was brutal … but then … I will be BETTER…

So, moral of the story is, before you made any decision, discuss with your team (whom will be affected by the decision you’re making) and get the consensus first. And Simon Sinek suggest to keep you’re ‘end-in-mind decision’ or your ‘view’ on the issue to yourself first, let the team talk first. So that it would seem you value their opinions rather than forcing yours down their throat.

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3 Lessons on Decision-Making from a Poker Champion

Liv Boeree – 3 Lessons on Decision-Making from a Poker Champion

First, let address the elephant in the room, I don’t play poker or any related card game nor gamble since neither are permissible.

And here’s why

“They ask you [Muhammad] concerning wine and gambling. Say: ‘In them is great sin, and some profit, for men; but the sin is greater than the profit.’… Thus does Allah Make clear to you His Signs, in order that you may consider”

 (Quran 2:219).

“O you who believe! Intoxicants and gambling, dedication of stones, and divination by arrows, are an abomination of Satan’s handwork. Eschew such abomination, that you may prosper” 

(Quran 5:90).

“Satan’s plan is to excite enmity and hatred between you, with intoxicants and gambling, and hinder you from the remembrance of Allah, and from prayer. Will you not then abstain?” 

(Quran 5:91).

Now, back to the ted talk.

Liv Boeree Main Talking Points

  • Liv Boeree learned three decision-making hacks during her career as a professional poker player.
  • First, don’t underestimate the role of luck. When you’re on a winning streak, ask yourself whether skill or luck is responsible. And as Robert T. Kiyosaki mentioned with regards taking up business opportunity, never over-estimate your smartness because the odds of success is always the same regardless of our previous successes.
  • Second, “quantify your thinking.” Use numbers and percentages to clarify your process. 
  • Third, when making life’s biggest decisions, prefer careful analysis to intuition. Try as best as possible not to succumb to our personal biases.
  • Gut feelings are reliable for reaching everyday decisions in which you have lots of experience. For major decisions, analyze your options.

Professional poker player career taught Liv Boeree 3 things about everyday decision making:

  1. “Life is…a game of skill and luck” – Be aware of the role that luck plays in your life. The element of luck makes it difficult to discern whether your strategies are the reason for your success. People love to believe their success is the result of talent and strategy, so it’s important to question whether a win is due to skill or to luck. Why? Well, winning because of luck would not likely to go down well with our ego. 
    • In 2010, Boeree, a relative newcomer to the game, won a major poker tournament. The win inflated her self-confidence. She became lax about studying the game, started taking more risks and entered more competitive tournaments. Her winnings nose-dived for the next several years until she realized that her early success had caused her to overvalue her skill level.
    • Example #1: Cancer may strike a nonsmoker while someone with a packet-a-day habit may live to an old age.
    • Example #2: The cryptocurrency market. In 2017, investment specialists credited their investment savvy for turning a profit, yet even poor strategies were making profitable returns in the fast-rising market.
  2. “The future is unknown, but you can damn well try and estimate it” – Poker, a game of probabilities and accuracy, teaches the importance of quantification. When you find yourself  saying the word “probably,” train yourself to “quantify your thinking.” Replace vague possibilities and forecasts with numerical estimates.
    • For example, when someone asks Boeree if she’ll attend a party, she attaches a number to her chances, such as proposing a 60% likelihood that she’ll show up.
    • The word “probably” means different things to different people, so if you want to convey accurate information, use numbers.
  3. “Your gut is your friend but I prefer a cost-benefit analysis” 
    • Internet memes glorify the power of intuition with phrases such as, “Always trust your gut feeling, and never second-guess.” Alas, your gut is often wrong.
    • Top poker players don’t expect to get by on instinct or a sharpened sixth sense.
    • Instead, they rely on analysis and strategizing.
    • Innate biases and wishful thinking influence gut feelings.
    • Intuition is useful when drawing conclusions about things with which you have ample experience or familiarity. You instinctively know, for example, when your best friend is peeved with you or whether you can maneuver your car into a tight space.
    • For big decisions, such as who to marry or what job you should take, employ a slow, methodical analysis.

What do to when you’re unsure

What to do when you’re unsure?
When you’re not sure, flip a coin because while the coin is in the air, you realize which one you’re actually hoping for.

Managing cognitive biases in decision making

Cognitive biases can be describe as distortions or preconceived notions which can cause people to make unwise decisions. Therefore to avoid this scenario, you need to understand the most common cognitive biases. Only then can you manage these biases when making a decision.

Understand common biases

Common cognitive biases would include:

  • Reliance on familiar experiences and past successes. We tend to base our decisions on events and information that we’re familiar with and that have positive associations for us.
  • Overconfidence in our assumptions. We generally don’t question our assumptions. We thus generate too few alternatives when making a decision.

Therefore, remember to stress test your decision before official implement it.

Safeguard against biases

Several strategies can help safeguard against cognitive biases:

  • Inject fresh experience or analysis. Get exposure to new information and a different perspective on the decision you’re facing.
  • Introduce further debate and challenge. Invite others to challenge your thoughts about the decision you’re making. This can help ensure that you explicitly confront any cognitive biases you may have.
  • Impose stronger governance. The requirement that a decision be ratified by someone at a higher level provides a further safeguard and can prevent any distorted perceptions from leading to a bad outcome.

Assessing the team decision-making methods

Teams often make better decisions than individuals hence the saying 2 heads are better than one. When people from diverse perspectives come together to choose a course of action, they bring a breadth of knowledge that can improve outcomes. But to make the most of a team’s collective wisdom, you need to follow a disciplined decision-making process.


Determine if your team’s current decision-making methods are working. Are sound decisions being made? Assess whether your team is following their agreed-upon processes and rules for making decisions. If not, then, remind members of the decision-making methods they agreed to follow and help them get back on track by reminding on the importance of following the preset decision-making methods.

Decision-making processes that include these five characteristics improved odds of being successful but also it is important to remember than like a machine, the decision-making method can always be improved. Among the five characteristics are:

  • Multiple alternatives solutions. Generally, successful decisions result from a review of many alternative solutions. Be sure your team considers several alternatives before making a decision. This “point-counterpoint” approach helps to ensure that at least two alternatives are considered. Remember, a “go/no go” choice involves only one alternative. Consider all possible possibilities relative to the probability of success and general / specific risks involved.
  • Open and constructive debate. To generate creative alternatives, you need to facilitate open, constructive debate. Debate should be task-related, not emotional or personal and this is very important, remember that the said debate shall not be on finding who’s right but rather what’s right. Silence or suppressed arguments are signs that the debate is not sufficiently robust. Give everyone a space to express their views and opinions.
  • Stress-test your assumptions. It’s unlikely that your team will have complete information at the time a decision needs to be made. The team will have to make assumptions as it proceeds. Make sure members recognize when they are relying on facts and when they are making assumptions. They may still choose to use untested assumptions in the decision-making process, but should reevaluate the plausibility of these assumptions throughout the process.
  • Well-defined objectives. The team should continually review the objectives during the decision-making process to ensure that the discussion stays on target. If conditions change, the team should refine the objectives or even the definition of the problem to meet the new conditions. This shall be the responsibilty of the meeting chairman.
  • Perceived fairness. Engagement throughout the process is critical to the success of a decision. Team members should feel that their ideas are being considered in order to feel ownership of the final decision. If team members stop participating in conversations or are doing so reluctantly, they may be dissatisfied with the process. The general rule-of-thumb is everyone is given 2-minutes to express their views and opinions.

Examine whether or not the team is using the best method for the decision at hand. Determine if the decision-making method your team selects is appropriate for the types of decisions your team needs to make.

Know the consequences of unproductive decision-making processes. These include lost time, poor choices, and decisions that team members won’t support. Additional costs are erosion of morale, wasted energy, and the diversion of the team’s attention from its goals.

Be flexible. Sometimes the decision-making method a team selects originally no longer supports the team’s work and needs to be changed.

Like a machine, this decision-making methods shall be subjected to regular assessment and be improved according as and when necessary, it is supposed to experience evolution in regular basis.