Sunday, February 16, 2014

Decisive: no more pros and cons lists (1 of 5)

Wrote this for some work colleagues. This is truly the best book I've read in a while!

Decisive: How to make better choices in life and work
by Chip & Dan Heath

More than a trendy business book! Based on literature reviews of ‘decision-making’ and ‘human judgment’ research, it is written by respected behavioral economists who translate Kahneman’s Nobel-prize winning theories into practical tips/tricks.

The authors’ goal? Globally, the “pros/cons list” is the only decision making model that is common. So they propose a 4-step process that isn’t revolutionary, but is comprehensive and reduces the negative impact of human biases.

Purpose of the book: “In recent years, many fascinating books and articles have addressed this question, ‘Why do we have such a hard time making good choices?’ …But less attention has been paid to another compelling question: Given that we’re wired to act foolishly sometimes, how can we do better?” (pg 4)

Thesis of the book: Given research which found that process matters more than analysis in making good decisions (by a factor of six, pg 5), they present a four-step process based on behavioral psychology discoveries. The only other decision-making process in wide circulation is the pros-and-cons list (invented by Benjamin Franklin in 1772, pg 7) but that is deeply flawed. “This book will address decisions that take longer than five minutes to make. …We want to make you a bit better at making good decisions, and we want to help you make your good decisions a bit more decisively. We also want to make you a better advisor to your colleagues and loved ones who are making decisions, because it’s usually easier to see other people’s biases than your own.” (pg 24)

What about our instincts? (i.e. Malcolm Gladwell’s “Blink”, etc.) “Intuitive decisions, which can be surprisingly quick and accurate…[are] only accurate in domains where it has been carefully trained…[this] requires a predictable environment where you get lots of repetition and quick feedback on your choices.” (pg 25) For example, a chess grand master should trust his gut! A hiring manager should not because you only hire a small number of people over most careers and feedback from those hires is delayed and complicated by other factors.

The four villains of decision making (pg 10-18):
  1. You encounter a choice, but you miss options. This is narrow framing – the tendency to define our choices too narrowly.
  2. You analyze your options, but gather only self-serving information. This is confirmation bias – the habit of developing a quick belief about a situation and then seeking out information that bolsters our belief.
  3. You make a choice, but are tempted to make the wrong one. This is short-term emotion – letting short-term pressures, politics, etc. obscure long-term needs and perspective.
  4. Then you live with the choice, but aren’t prepared to deal with unexpected developments. This is overconfidence – thinking we know more than we actually do about how the future will unfold.
The next postings will cover their WRAP Decision Making Process – it isn’t always sequential but generally address each of the four mistakes above. “The value of the WRAP process is that it reliably focuses our attention on things we otherwise might have missed. A more subtle way [it helps] is by ensuring that we’re aware of the need to make a decision.” (pg 26)
  • Widen your options
  • Reality-test your assumptions
  • Attain distance before deciding
  • Prepare to be wrong

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