“It’s tough to make predictions, especially about the future”
–Yogi Berra
Making decisions is a life skill, no doubt about that. Making decisions when you have limited info is common and it’s what eventually separates good leaders from the rest.
On today’s episode of “One small thing per day” I want to mention a gem I learned reading “Thinking in Bets” by Annie Duke.
Separate Decision from Outcome
Do not use the result as a perfect signal of decision quality, especially when the sample size is small. A bad result can come from a good decision. For example Pete Carroll’s decision to pass and not rush in Super Bowl XLIX had a bad outcome but the decision making rationale was sound.
Worse yet, bad decisions that result in good outcomes reinforce things that don’t actually work. My favorite example is the Cargo Cult thinking that a ritual causes airplanes to land.
The Cargo Cult is an extreme one, there are many examples of bad decisions we make day to day. The main idea is that you focus on the process and let the result be just one of many signals.
How to do it? Well, I can tell you what I do:
I seek truth, not validation.
Whenever I have uncertainty I ask myself, if I were wrong, how would I know?
Use “Pre-Mortems”
Imagine a failed decision and work backwards from that.
Embrace Uncertainty and Ambiguity
Accept that all decisions are bets and be comfortable with probabilistic thinking.
I hope you found this useful.
Till next time
-JV