Thinking Power Times Four

“Heart,” “Mind,” “Yes,” and “No.” If you can get your head into each of these modes, you can multiply your decision-making power by four in the new year. Let’s look at them one by one.

Funny hippie man holding a love heart and pointingHeart. Get into this mode by listening to your heart and your gut. Use your intuition. Bring out your feelings. What’s your immediate reaction? What’s your first impression? How do you feel about each option? Don’t try to explain or justify anything. Some people find this hard to do, thinking it’s irrational and flaky. For a long time, I prided myself in being totally rational and ignoring intuition. Lately, though, I’ve started to trust my gut. It’s even helped me be a better mathematician, if you can believe that. It turns out that all those instant gut reactions are not just random thoughts with no substance—they’re the expression of all your years of experience that you’ve internalized. Listen to them. For more on this, see Blink! by Malcolm Gladwell. This viewpoint also helps you prepare for the emotional responses of others. Have you ever had really good plans scuttled by someone else’s seemingly irrational reaction?

Businessman holding a laptopMind. Get into this mode by looking for factual data. Question everything. What do we know? How do we know it? What can we infer from that? What else do we need to find out to make a rational decision? Are we being swayed by irrational biases? How can we justify our decision? The “head” people will find this tedious and time-consuming, but it’s often the only way to sort out the complexities and do the trade-offs of a major decision. Humans are prone to a great many thinking errors, such as the sunk cost fallacy that I talked about a few blogs back. We also find it difficult to focus on more than a few things at a time, so a gathering of all the facts and an analysis of them is just about the only way to pull it all together. As a bonus, you get a rational justification for your decision that you can use to make your case.

Beautiful African American woman happy thumbs up isolated on whiYes. Get into this mode by looking for the positives. Start with a big smile and a thumbs-up. Look for opportunities and new ways of using what you have. Give yourself or your team a pep talk. What’s the best that can happen? What do we have available to us? What can we learn from our mistakes? How can we use this? How can we meet this need? You might think this is just empty cheerleading or the genial nodding of an unthinking yes-man, but this is an essential mindset for moving ahead, working through difficulties, comparing options, and seizing opportunities.

Young men expressing disgustNo. Get into this mode by looking for negatives and problems. Start with a scowl and a thumbs-down. Give the optimist a kick of reality. Get some grim realism into the discussion. What can go wrong? What are the problems? Why won’t it work? What’s the worst thing that could happen? You may be wondering why you would want this downer of a guy in your work group or in your head, talking smack and shooting down your ideas. Well, for one thing, he may be right. Better to anticipate the problems while you can still fix them. Better to know what might go wrong so you can have a work-around plan if it does. Much of decision-making is balancing what can go right against what can go wrong, so you need to understand the worst as well as the best. Finally, the “no” person acts as a devil’s advocate, asking the “yes” people to justify themselves.

You may find some of these modes more comfortable than others. Try them all on the next time you have a tough decision and see whether they help. If you’re working in a group, make sure all modes are represented. Value their contributions. That annoying guy who is shooting down every idea is giving a valuable “no” perspective. The nerd with the boring charts is giving you the “head” view. The hippie with no justification for various feelings is all “heart.” The cloyingly bubbly cheerleader is giving you the “yes” view. You need them all.

Have you ever tried taking on all these modes when making a decision, either alone or in a group? Was it hard? How did it affect the outcome?

Gift books for your favorite decision maker

smart choices bookHappy holidays! Are you still shopping? I am. So I thought I’d pass on some suggestions for books for the decision makers (or would-be decision makers) in your life.

Smart Choices:
A Practical Guide to Making Better Life Decisions
John S. Hammond, Ralph L. Keeney and Howard Raiffa
Broadway Books
242 pages
Smart Choices is a very helpful, easy-to-read, and non-technical guide to the decision process. It includes many examples that help you think through your decisions before you analyze them. There is emphasis on the subjective aspects of decision-making, including psychological traps and risk tolerance. The Even Swap method (used in Chapter 10 and Case Study 8 in my book) was developed by the authors and is described in their book. I highly recommend it for its guidance on defining the problem, objectives, alternatives, and consequences.

Decision Empowerment:
A Parent’s Guide to Raising Good Decision Makers
Robert N. Charette and Brian W. Hagen
Decision Empowerment Institute
156 pages
This is the only book I know of that focuses on decision making for children, an essential life skill that is not taught in the schools. Written for parents, it provides a simple five-step process to guide children to make good decisions through parent-child dialogs. The techniques are helpful for all ages and address tough issues such as values and uncertainty. The examples address typical decisions that children face and clarify the process with realistic dialogs. This book is available only through the publishers

Simple Spreadsheets for Hard Decisions:
Best personal, financial, and business choices with Microsoft Excel—when you have too many goals and too little information.
Carol Jacoby
City Shore Press
278 pages
My book presents decision techniques supported by spreadsheets. While this addresses only Excel 2007 and earlier, the techniques and example spreadsheets are valid for any Excel version. You can learn the essential Excel skills in some of my earlier posts. The emphasis in the book is on decision making to help you think about the future and compare alternatives. You will learn to customize your spreadsheets to help you address your specific questions. The questions are always changing, so the emphasis is on using Excel interactively to explore your options and potential outcomes.

Microsoft Excel Data Analysis and Business Modeling
Wayne L. Winston
Microsoft Press
2004 – 2014 (multiple editions)
602 pages
Learn about the full range of Excel features and techniques for making decisions, with examples on applying them. You find many of these techniques only here. There are many exercises with practice files on an included CD. The examples are interesting, many related to baseball. The emphasis is on data analysis, so it is most useful if you have collected a lot of data and want to understand what it all means. There are a lot of statistics, but they are all presented in a clear manner with examples. There are multiple editions of this book, corresponding to the versions of Excel.

Strategic Decision Making:
Multiobjective Decision Analysis with Spreadsheets
Craig W. Kirkwood
Duxbury Press
345 pages
Learn more about comparing apples and oranges. This book starts with normalized scores and weighted totals and takes it from there, taking into account uncertainty, constraints, risk aversion, and dependencies, with emphasis on understanding and mathematically describing preferences. It includes many business decision examples and exercises. This is the most technical/mathematical of the recommended books, but well worth the effort.

Black Friday

Black fridaystamp

Last Monday I happened to drive by the local Best Buy and saw tents set up outside, the beginning of the line for Black Friday. I’m sorry I didn’t stop to talk to the people. I’m interested in how people make decisions, of course, and I wondered how they had decided to spend four days camped next to a parking lot to save a few bucks. Did they take off from work? What were they buying and how much were they going to save?

Every decision to do something is a balancing act between what you are giving up (here, possibly vacation days) and what you are gaining (maybe a cheap television). On the surface, at least, this one is overwhelmingly negative. Yet there are people all over the country doing this. There must be more to it than this.

The only thing I’ve ever done like this was to sleep on a Pasadena sidewalk to bag a front row view of the Rose Parade. The added benefit there was an all-night party with all the other people doing the same thing. In fact, I slept through the parade and still thought it was worthwhile.

New Apple products will often bring in lines of people days before the items go on sale. Apple fans are almost religious in their devotion. Even as far back as the 80’s, Apple marketers were called “evangelists.” These events then become a meeting of the faithful. There is definitely a party atmosphere among like-minded people, with the hope that Steve Wozniak or some other Apple deity will show up. I would guess some people show up even if they don’t plan to buy anything.

So, is there a benefit in the very act of camping out and being one of the first through the doors? Or are the advertisers just really good in getting us to act irrationally?

I’d be interested in hearing from you if you camped out in anticipation of Black Friday. What did you give up to be there? What did you gain directly through your purchases? What else did you get out of the experience? Bragging rights? Adventure? Camaraderie?