Making Better Decisions

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This is the first of a series of posts on learning how to make better decisions.

Are you satisfied with the quality of your decisions? If you are like most people, you will easily recall examples where you wish you had decided differently. Humans are not particularly well-wired to make good choices for important decisions with long-term consequences, as a large body of research in psychology and other fields reminds us. Can we do better?

Let us gauge your decision-making style. Try to remember three important decisions that you have made in your personal or professional life and that you did not need to make in a hurry. They might be anything from choosing an expensive appliance, making a change in a personal relationship, choosing an apartment, applying for a new job, to maybe hiring somebody.

Got them? Now think about how you made those decisions. Which of the following best describes your decision process?

(a) I trusted my gut.

(b) I carefully considered the pros and cons of the different options and tried to weigh all factors together.

(c) I thought back to past similar situations and tried to do whatever had worked previously.

(d) I don’t think I have a method for making decisions.

This is not a systematic classification, but it will get us going. If you picked (a), you are in good company. Many people follow their intuition. But I have bad news for you: Intuition is often wrong, and sometimes catastrophically so. If you picked (b), you probably pride yourself in trying to be as “rational” as possible. But I also have bad news for you: Weighing pros and cons is often too simple a method and it might lead to unsatisfactory choices. If you picked (c), you might be “data-oriented” and view decision-making as a learning process, which is good. But I also have bad news for you: Just comparing with past examples might miss important information and can easily lead you astray. And if you picked (d), it might be high time to start thinking about what you are doing with your life decisions (sorry).

I will address all those topics and more in a series of posts over the next weeks and months. But right now, there is an even more important concern. The real problem is that, if you picked any of those answers at all, you might already be thinking about decisions the wrong way.

The decisions you don't make

Let’s take a step back to see why. Suppose your car breaks down. There are many things you could do to try to fix the problem. But, unless the problem is obvious or you happen to be a car mechanic, you probably will not just start tinkering around in the engine, hoping for your intuition to tell you which screws to loosen up. Also, you will probably come up empty when trying to list the pros and cons of possible options, and it is unlikely that past experience helps you much. In the end, you will just call a mechanic. Similarly, if you feel sick, you will hopefully not start popping random pills hoping to fix the problem. You should go to a physician.

You probably do not think about these examples as decisions, even though they are. The mechanic and the physician will examine your problem and they will make a decision. It is not a decision you would comfortably make yourself, because your intuition is not trained in those fields, you do not have the knowledge to weigh the pros and cons (or even know what they are), and your experience does not include enough similar problems. Clearly, some important decisions in your life should be delegated to experts. And you are already doing that? Good. But how do you know when a decision is important enough to ask an expert?

Let’s dial the examples down. Suppose your coffee maker breaks down. Again, unless you are a coffee maker mechanic or the problem is obvious, you will not start tinkering right away. You might read the user’s manual, or look for YouTube tutorials. Suppose your leg hurts a bit after a workout, and you have never had that particular pain. It might not be enough to go to the doctor, but you might ask friends at the gym or look for some information online. The first step, in this case, is to inform yourself better. Not to follow your intuition, not to consider pros and cons, and not to compare to whatever past experience easily comes to mind.

Again, you probably do not think about problems like these as decisions. So, what is the difference? At which point do you consider a problem to be a decision that you can make by yourself? Consider now the really important decisions in your life, like choosing a career, a partner, or a new house. Are those problems more or less important than fixing a coffee maker? Is deciding whether to leave your current job and pursue a more fulfilling activity more or less important than finding out whether you have a cold or the flu? If you do not dare decide how to fix your car on your own, why do you agonize over your career choice instead of seeking help?

Decision-Making Essential Reads

Navigating the Landscape of Unintended Consequences

Who Is Rational—and How Irrational Are We?

Start by asking the right questions

The first step in approaching an important decision is to ask yourself, “Am I qualified to make this decision?” and “Do I have enough information to make it?” Too often, we brood over important decisions forever when we should actually be gathering new information or looking for help. Decision-making is serious business, and thousands of professionals in psychology, statistics, management, and economics have worked hard to find out how we can improve our decisions, and what are the most serious mistakes that we typically make. This post is intended to be the first of a series examining that body of knowledge from a practical point of view: How can we learn to make better decisions for ourselves and others?

The first lesson is to be more conscious, and also more cautious, about what a decision is. The boundary between “problems” and “decisions” is a subjective one. Very often, a problem is just a decision that we are not qualified to make and need to either delegate or reconsider after gathering more information. The other side of the coin is that we can easily be overconfident and fail to recognize that we are not yet ready to make a particular decision. If you are facing an important decision and are having doubts, it might be time to stop, get more information, and consider whether you can get help.

And we should probably hold others to these standards too, in particular the decision-makers that we choose to trust. When considering, say, candidates for public offices, the questions we should be asking are not how we feel about their elegant words or whether they resonate with our emotion-based identities. Rather, we should ask, “Is this person qualified to make the decisions that will be required of the position?” and “Does this person consistently act on the basis of all relevant information?” If either answer is no, why should we believe that person to be a good decision-maker?