Welcome to the fifth week of 'The art and science of making better decisions' boot camp!

Last week we learnt that not all high-stakes decisions are difficult, and after analyzing different features of hard problems more carefully found out that what all truly difficult decisions have in common is uncertainty and ambiguity.

This week, we'll be synthesizing everything we've learned thus far to learn how to make better decisions.

Required

Read an introduction to this week’s topic: The four steps to making better decisions (8 mins)

As everyone who has made it this far with this boot camp can attest, making good decisions is hard.

To make things worse, there are no silver bullets that solve all problems and each decision is made in a context that is unique and challenging in its own way.

That said, there are several ways in which we can ensure that we give ourselves the best possible start to making difficult positions regardless of the context.

We’ve already learnt that sometimes simply taking the role of a neutral arbiter can increase our chances of avoiding our worst biases and identifying better solutions.

The reason why this works is that when we focus on the objective features of a problem instead of our emotional responses to it, we engage the more rational parts of our brain which are better equipped to deal with complexity, ambiguity and uncertainty. As Professor Kahneman calls it in our additional materials for week 3, when we take the time to deliberate we fire up “System 2” in our brains which excels in analysis and reasoning.

Those with business and project management backgrounds will recognize how utilizing industry-standard tools such as Strengths-Weaknesses-Opportunities-Threat (SWOT) matrices and log-frames work because they gently guide us to use System 2 and helps us chart a course through uncertainty and assist us in avoiding getting stuck on biases.

Not all decisions require role-play or excel sheets however. Instead, following the following four steps is sufficient in most situations we face.

__1) Identify and acknowledge your role in the wider context __

Understanding your role in the wider context of the decision will assist you in dedicating the correct amount of resources to the task as well as coming to terms with issues such as conflicts of interest. In addition, taking the time to self-reflect prior to proceeding will help you ensure that the right person is making the call.

2) Ask whether you are the correct person to make the decision and whether you should make it alone

Sometimes we are faced with opportunities to make decisions that could or should be made by others. In such cases we would do well by being open to the fact that not all choices are best made by ourselves.

One way of identifying situations where we should defer to others is to take stock of the biases and cognitive blind spots that we have with regard to the decision. For example, if the choice cuts too close and personal for us to see it clearly, asking for advice and support is probably the best thing to do. Likewise, our own expectations and prior history with the decision can make us unable to break the status quo, making it important to bring a diverse set of opinions to the table

3) Make sure you fully understand the decision ahead of you and why it is difficult for you to make

After you have committed yourself to making a decision, the next step is to ensure that you have a sufficient understanding of what type of choice you are facing.

By exploring different aspects such as time-sensitiveness, likely impact and accompanying uncertainty and ambiguity you can identify which particular feature of the decision is making it difficult for you to make. Once you have pinned down the pain points with precision, the next step is to bring the right tools to the operating room.

4) Endeavor to treat each decision with the appropriate instrument and make sure your principles and priorities are set up in advance

Having a clear understanding of what makes a particular decision difficult gives you the opportunity to apply the right principles and tools in order to move ahead.

For example, when encountering no-stakes and low-stakes decisions that are challenging due to e.g. time-constraints or incomplete information, ideal tools would include automation, outsourcing and deferrals.

In the case of a high-stakes decision, taking time for deliberation and engaging System 2 is as essential as ensuring that all the affected voices are heard around the table. Filling in SWOT matrices and drawing log-frames help in maintaining objectivity and a field of view, while tools such as Monte Carlo simulations and econometrics can help tame uncertainty.

Creating principles and rules for treating frequently encountered decisions will help you avoid getting stuck on trivial decisions and setting frameworks in advance can assist in avoiding analysis paralysis.

Having a strong set of principles is also a life-saver when it comes to making ambiguous decisions. Equipping yourself and your organization with a predetermined set of priorities, policies and principles that can be applied at the individual decisions level is critical for making the tough calls between decisions that are otherwise on par.

Watch a video on techniques we can use to make hard decisions easier (15 min)

The above is all well and good for those with all the time in the world, but you might be wondering whether there are any practical tips that you could employ to decisions you face right now.

In this video, Professor Sheena Iyengar (whom we met in week 1) introduces us to four tangible techniques we can use to make hard decisions easier. By systematically cutting, concretizing, categorizing and conditioning for complexity, it’s possible to make the toughest decision a predictable and enjoyable experience.

In addition to highlighting some paths for you to follow along we are also linking you to some of the most useful templates, tools and techniques you should now feel much more comfortable applying in real life.

Reflect on how you intend to tackle decisions differently after this boot camp (5 min)

For this activity we ask you to take this opportunity to self-reflect on the past week and tell us in one paragraph how you intend to tackle difficult decisions differently after this course.

Use the terminology, definitions and concepts you’ve learnt over the past weeks and be sure to reflect upon your biases, personality traits and personal context as well.

Submit your answers through this link, or record them on a piece of paper.

Bonus video (10 min)

Watch this one-on-one interview with Professor Steven Pinker on the topic of tough decisions and rationality which we filmed while drafting this course.

Take your learning further

1. Learn more about why we make bad decisions

Watch Professor Dan Gilbert’s Ted Talk on Why we make bad decisions. In his talk Professor Gilbert presents research and data from his exploration of happiness and he shares some surprising tests and experiments that you can also try on yourself. (33 min)

2. Best practice tools to consider in making decisions

3. Read an article (6 mins each)

Picture credit: Unsplash

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