The Myth of the Rational Decision

I sometimes encounter people who want to learn a foolproof technique for making the right decision. More often I find people who argue that their choices are based on a rational argument and hence are the only right choices. Take two of these people with opposing choices and put them together and each will think the other is irrational. No discussion.

In both of these cases there’s an assumption that there is such a thing as a perfectly rational decision with no subjectivity at all. Wrong! Yes, there is a whole discipline of decision science and I teach decision techniques myself, but I can’t teach you how to make a perfect, irrefutable, mathematically provable, absolutely rational decision.

Back in the 50’s, when computers were first being used, there was a lot of talk about using these “giant brains” to solve major problems. There were futuristic stories about people asking the computer Big Questions, like the meaning of life, and getting back the one, irrefutable answer. The thought was that if you put enough brainpower behind any question, rationality will inevitably lead you to the answer. Now that we have more brainpower in our phones than they had in those big computers, we see that this is not the case.

The fact is that any decision worth more than a few minutes of your time involves subjectivity. Accept it. The people who disagree with you are not (necessarily) idiots. So don’t argue over reasoning — examine assumptions and priorities. If you’re trying to make a particularly slippery decision, don’t get discouraged by the vagueness of it all. Accept subjectivity as a key part of making the best decision, for you, that you can.

There are several ways that subjectivity comes into any complex decision. First, there are priorities. Any decision worth your time affects multiple goals, which are usually in conflict. Cost/benefit. Risk/reward. In buying a house, is an extra bedroom worth a longer commute? Closet space vs. yard space? Only you and your family can weigh the various criteria to make the best choice for you. This gets even stickier when there are multiple stakeholders, all those people who have an interest in the outcome. I once had a Washington, DC cabbie tell me that Baltimore was the best local airport. The reason turned out to be that it got him the largest fares. What’s important to me may not be important to you. It’s all subjective.

There will always be holes in the available information. The way we fill them in is based on our experience, and hence subjective. To make a good decision you need to visualize the future consequences of each of your alternatives. This builds on your imagination and experience. Again, subjective.

There is your level of risk aversion. Most of us are risk averse to some extent. We would rather have a sure thing than a 50-50 chance at twice as much. Some people are risk seeking. If you don’t believe me, go to Las Vegas. Your level of risk aversion—how much more than twice as much you would need to be offered to take that 50-50 chance—drives many of your decisions. Again, subjective.

The most important and most subjective part of decision-making is choosing the decision to be made, identifying the problem to be solved. This is what separates the leaders from the doers. The great decisions are not presented to you—they come from your mind, your observations and your experience. Subjective.

Don’t let the subjectivity throw you. Understanding and accommodating the constraints and preferences of everyone involved is a key part of the art of being an effective decision maker. At the same time, be aware of the biases that skew our decisions. (But that’s a topic for another post.)

How does subjectivity enter your decision-making?

The One-Minute Decision

One minuteWe’re all barraged with decisions every day. We don’t have time for complex decision analysis. What we need is a way to make a one-minute decision. Here are some ideas:

List the pros

I found a great one-minute decision technique on the blog, “101 Questions That Will Change Your Life” http://101questionsblog.wordpress.com/2012/07/08/39-about-choices-decisions-and-fear/ by Jacqueline Garwood. Check it out for other decision-making insights.

This technique comes from Susan Jeffers’s book, ‘Feel the Fear and Do It Anyway.’ It’s based on that old standard of list-the-pros-and-cons. Here’s the twist—list only the pros. First open your mind to all the possible alternatives. For each one, list all the good things about that option. Then count the number of items in each list. The option with the most points wins. Go with it. That’s all there is to it.

I like this technique because first of all, it’s fast, and, more importantly, it focuses on the positive changes you are considering. This gets over the fear of loss that keeps us from moving forward. It keeps us focused on the positive changes that we can make.

Best and worst

You don’t even have to write anything down for this one. This is good for those decisions in which you’re trying to decide whether or not to do something. It’s just three questions:

  • What’s the best that could happen?
  • What’s the worst that could happen?
  • Is the chance of the best worth the risk of the worst?

I like this because it acknowledges that we can’t completely control the outcome and that there is a chance that it could turn out either good or bad. This is the basis for more sophisticated techniques, such as decision trees, used here for a super-quick decision.

Is it really me?

Steve Pavlina’s blog http://www.stevepavlina.com/blog/2007/07/how-to-make-smart-decisions-in-less-than-60-seconds/ gives this technique. Rather than coming up with a list of criteria for what you’re looking for, make a list of words that describe yourself. Then choose the option that best fits that description. He gives an example of buying a desk. He saw himself as light, tough, not ornate and a little bit weird, so he was drawn to a desk with those same qualities. He’s been happy with it ever since.

Flip a coin

Yes, yes, I know. That’s a random choice and not a real decision. Here’s the twist. Pay attention to your reaction to the outcome. Are you pleased or disappointed? Were you subtly hoping for one outcome or the other? Then listen to your gut and go with it.

Prep yourself for quick decisions

In a previous post I talked about how taking the time to define your values and priorities prepares you to make quick, tough decisions. So, before you get barraged with decisions to make, ask yourself:

  • What are my (my organization’s) core values?
  • What are the resources I (we) have available for alternative solutions to the problems we expect to face?

The one-minute pre-decision

Most importantly, before you make any decision, even a one-minute one, spend a minute to be sure you’re asking the right questions. Daniel Tenner in his blog http://swombat.com/2012/1/6/one-minute-entrepreneur suggests the following questions before making a decision:

  • Do I actually know what the problem is?
  • Do I know the extent and impact of the problem?
  • Who is the best person to fix this problem?
  • Does this problem actually need to be fixed?

How do you make quick decisions? Can you suggest any more techniques?

It Takes a Long Time to Make a Quick Decision

I’m interested in why people hate making decisions, when decision-making is such Overwhelmed with choicesa powerful tool to put you in charge. I’m always eager to hear about stumbling blocks that keep people from making decisions. What are yours? Please add a comment.

I ran across a recent post that gives one person’s answer to this question. Stephanie Jain, in her blog http://secondmarshmallow.com/2012/07/03/what-should-i-wear-the-importance-of-values-in-decision-making/ describes her own decision-making anguish.

In the midst of many major life decisions, I found myself paralyzed again. Should I quit my first stable corporate job and pursue one of a much riskier entrepreneurial nature?  Who or what should I prioritize with schedule conflict – my work, my close friends, my boyfriend, or myself?  Should I just drop everything, start over, and go to graduate school?

As these questions and a handful more swirled through my mind, the internal tension built from the failure to make a decision began to clench, tighter and tighter, until I finally found myself standing in my closet – staring at the array of colors, styles, and cuts of clothing, and broke down. The pressure of facing yet another decision had pushed me over the edge. I could not decide what to wear!

The lesson learned is, I was unable to make a decision because I wanted it all.

Yes, we want it all. Making a decision often means consciously choosing to give up something we want to get something even better. Stephanie has the answer:

Once you discover and define your values, they dictate priorities, which in turn help you make decisions with peace. You’ll make good decisions, and bad decisions. But both can be made with serenity knowing that neither one will ruin your life (assuming they’re legal, moral, etc.). In fact, a series of poor decisions are desirable, because they lead to making good ones in the future, by honing in on your core values.

People often ask me how to make a quick decision. Ironically, it takes a lot of time–time spent exploring, discovering, defining and refining your goals and priorities. Time spent reminding yourself that you can’t have it all. Prepare ahead of time and you’ll be ready to zip through any future barrage of decisions.

What are the stumbling blocks that make it hard for you to make a decision? Have you found a focus that helps you make quick decisions?

Finding the Right Forks on the Right Road

What’s wrong with this picture?Decision at a fork in the road

This is standard Microsoft clip art and I’ve used it in the past in my classes to illustrate decision-making. This is the stereotypical view of what a decision maker does—choosing among options. We talk about being “faced with a decision,” the implication being that it all starts when we have to make a choice.

A while back I read a book called “The 75 Greatest Management Decisions Ever Made” by Stuart Crainer. I wanted to see what the managers did when they were faced with a decision, how they made the choice. Each little article ended with lessons learned, but no real theme emerged. Yet when I tried to analyze what exactly these managers did to make their great choices I realized that in almost all cases they were not faced with a decision—they discovered it themselves. They realized that there was a need or opportunity to make things better, or an important goals that had been neglected. What matters is not what you do at the crossroads, but which crossroads you place yourself at and what the forks are. There is much important work to be done before you get to the position of the person in the picture.

When my daughter was young I tricked her into doing what I wanted by giving her the illusion of choice through limited options. “Do you want to wear your blue pajamas or your red pajamas when you go to bed now?” Notice that the choices do not include, “Do you want to stay up for another hour?” or even, “Do you want to sleep in the nude?” I made the big decision for her (go to bed now) and left the insignificant choice to her.

After a while she figured this out. “I don’t want either the blue pajamas or the red pajamas because I don’t want to go to bed now.” This is a great trick but, alas, it only works for so long. Surprisingly, many adults are still being fooled by this trick by their bosses, their colleagues or even the people working for them. Other people define the decision to be made and the choices and you think you are being a decision maker because you get to make the choice.

An effective decision maker will not blindly follow a road, looking for a signpost left there by someone else. He or she will seek out the great decisions to be made, possibly hidden by bushes or by other signs, or maybe on some other road entirely. You may be on the wrong road. The first question is not which fork to take, but which road. Where should I plant my own signpost? What are the choices?

The Art and Science of Decision Making

ideaAre you a decision maker? Of course you are. If not for a major corporation or start-up, at least for your family or your own life. Do you want to get face-to-face with the big decision maker who can improve your life and business? Look in the mirror.

This blog is dedicated to all those who want to take charge by being a more effective decision maker. I look forward to conversations about techniques and stumbling blocks. What kinds of decisions do you struggle with? What makes them so hard? What techniques have you found to leap over those hurdles?

Being an effective decision maker helps you make the best choices, but more than that, it lets you decide what the choices are and, in fact, what problem is being solved. More than anything else, it puts you in charge of your life and your business. It is probably the most important skill for success.

So why does everybody hate making decisions? You never hear anyone say, “Yay! I have a decision to make!” Decisions are seen as stumbling blocks rather than opportunities. I have some of my own ideas on that, but I’d love to hear from you.

Decision-making is both art and science. There is an entire discipline of decision science. You can get a degree in it. Decision science teaches you how to maximize the expected value of your utility function. What does that mean? How does this apply to real people making real decisions? I hope to cut through the mumbo-jumbo and pull out techniques that you can really use.

Decision science often focuses on making a choice among alternatives, yet being an effective decision maker requires much more than this. This is where the art comes in. What is the most important problem to be solved? What are the alternatives? What does the future hold? What about all these conflicting goals? To do this well requires both courage and imagination. Pep talks help, but specific tools and techniques are better.

My goal in this blog is to hit the sweet spot between the arcane mathematical theories of decision science and the fuzzy motivational techniques of the “reach for the stars” variety–simple but powerful techniques to help real people formulate and make real decisions. I hope to hear from you.