Let us dive into the art of decision making.
We made decisions every day, most of the time we depend on our System-1 thinking, the quick and often reliable fast-thinking system. But as we learned before, there are a lot of hidden traps that more often than not affect our decision making.
When to make the decision
When we make a decision can be as important as how we make it. Getting the timing right is a critical factor in how effective our decision will be.
If we make a decision too early, we might not explore enough possibilities. As a result, we might miss out on the best alternative.
Making decision too early and too late both have inherent risks. So, how do we know when to make a decision?
Use these techniques to slow things down a bit.
The goal is to ensure we consider enough possible solutions, and assumptions. A simple way to do that would be:
- Sleep on it. Consider adjourning a meeting before making a final choice. Give some more time to think about a possible solution.
- Alter a period of time. Arrange a meeting to discuss all the possible solutions.
- Ask everyone to try and prove whether a solution would work or not. The solution needs to be able to defend against all question.
Remember, the goal is to stress-testing the proposed solution can work, not to protect anyone’s ego. But don’t take too long.
Disclaimer: Don’t take too long
If the team take too long to make a decision, we waste valuable manhours. When people insist on hearing every viewpoint and resolving every question before making a final decision, bring the discussion to closure.
Try establishing a deadline for a decision, and require the team to use the best information available at that time.
What to do when we are having a hard time reaching a decision?
Try using “point-counterpoint” and “intellectual watchdog” methods.
How to implement them are detailed below:
To use the point-counterpoint method:
- Divide your team into two groups of equal size (A & B). Try to spread supporters of opposing alternatives between the groups.
- Ask Group A to develop a proposal for an alternative that includes their recommendations and key assumptions, and then present their proposal to Group B.
- Ask Group B to identify one or more alternative plans of action, and then present those to Group A.
- Have both groups debate the different proposals until they all agree on a set of recommendations.
To use the intellectual watchdog technique:
- Divide your team into two groups of equal size (A&B).
- Have Group A develop a proposal for an alternative that includes their recommendations and key assumptions.
- Have Group A present its proposal to Group B.
- Ask Group B to critique the proposal and present its analysis to Group A.
- Ask Group A to revise the proposal based on Group B’s feedback and present it again.
- Have the two groups continue to critique and revise the proposal until they agree on a set of recommendations.
Stress-test your first choice
You and your team are ready to make a big, high-stakes decision and have selected one alternative from a list of possibilities. To make sure this really is the best course of action, subject your chosen alternative to a stress-test.
To thoroughly screen your choice, ask:
- Has self-interest driven people to make this recommendation?
- Have those making the recommendation fallen in love with it?
- Were there dissenting opinions within the recommending team, and were they thoroughly explored?
- Could the recommendation be unduly influenced by memorable events such as past successes or failure under similar circumstances?
- Has the team considered credible alternatives to the frontrunner?
- Has the team dug for data about the alternative beyond what’s immediately visible and available?
- Have key numbers underlying the alternative been closely examined?
- Are those recommending the alternative overly attached to their past decisions?
- Are the forecasts associated with the alternative overly optimistic?
- Is the worst-case scenario that could result from the alternative’s implementation bad enough to accurately reflect the risks?
- Daniel Kahneman’s Thinking Fast and Slow
- The Art of Thinking Clearly
- Hidden Thinking Traps in Decision Making
- Ray Dalio’s Principle