3 notes on decisions for the week

3 notes on decisions for the week –

1) Being afraid of making decisions is as useless as being afraid of being judged. Both are happening – whether we like it or not. So, we’re better off accepting that fact and dancing with it.

2) Once we commit to rising above the fear and making decisions, it is a certainty that we’ll get a few of them wrong. The only useful habit when faced with these mistakes is a focus on a creative, constructive, and corrective response. Fix issues and avoid repeat mistakes.

3) Nearly every decision we’re worried about right now won’t matter a jot in the long run. The stakes are generally far lower than we think. Worry less, smile more – this will pass.

Doing the thoughtful thing

The trouble with aiming to always do the right thing is that it doesn’t apply to a majority of situations we encounter everyday.

Every once a while, we may encounter a situation where we know exactly what the right thing is. But, more often than not, it is unclear what we ought to optimize for and for what time frame.

A better approach, then, is to aim to do the thoughtful thing. It is a great approach to minimize regret and maximize peace as it means we’ve done the best with what we know. When we know better, we will do better.

And, besides, it turns out that the right thing is just the cumulative result of one thoughtful decision after another.

In data we (don’t) trust

There’s a growing legion of companies and product teams that aspire to call themselves “data driven.” When they make decisions, they tell tales of how Google tested 40 shades of blue and eliminated the need for intuition and gut-based decision making.

But, as data might suggest, extreme beliefs in any approach are problematic and a belief in data driven decisions is no exception.

For the data to point the way, we need suitable problems, the right inputs and tracking based on good questions and thoughtful hypotheses, reliable data pipelines, good analytical judgment in overlooking outliers and picking a robust methodology, and versatility in the tools to analyze and interpret the outputs. Every once a while, all of these align and it all just works.

But, for the most part, we’re better off marrying a desire for data with a healthy skepticism for what it is telling us. It is that skepticism that will ensure we keep pushing for the right questions and iterate our way into insights that get us closer to the truth.

Better to be data informed than data driven.

Optimal Stopping

We were trying to sell an old car recently and had placed it in a used car parking lot. These lots charge a monthly rent. So, you are incentivized to sell your vehicle within the first month. The question for us, then, – when is the optimal time to sell? For example, do we hold out till the end of the month and wait for the best offer?

Luckily, mathematics has a solution for us. The optimal time to stop is at 37%. If you have a 100 candidates for your next role, the most optimal way to make a decision on the best candidate is to reject the first 37 and then pick the first of the next few that is better than the first 37. Essentially, the algorithm suggests we use the first 37 to calibrate.

Optimal stopping can be extended to time as well. In this case, we had 30 days to sell and 37% of 30 days is 11.1 days. By that logic, we would hold out for the first 11 days and then sell – assuming a half decent offer comes along. Our first offer came after 14 days and we sold for a price that was eventually slightly lesser than we’d planned for. But, we had no regrets because math told us that we’d made the optimal decision.

Algorithms like optimal stopping are likely the future of psychology and behavioral economics. Optimal stopping can be applied to choosing a restaurant, a spouse, and while buying a house. As we learn about our fallibility in making decisions, we can use algorithms like this one to get better at making decisions.

(H/T: Algorithms to Live By – Brian Christian and Tom Griffiths)

Lessons from buying jeans

A decade or so ago, I bought two pairs of jeans and loved them. I wore those pairs until a year ago when they couldn’t handle my bulging abs (okay, okay, I just put on some weight).

Over the past couple of years, I’ve been wearing jeans more frequently thanks to graduate school and a workplace where wearing jeans is the norm. So, I reflected on my jeans purchase record recently. Since my 100% hit rate a decade ago, I’ve purchased 6 pairs of jeans in the last 3 years and my hit rate is around 50%. I gave away 2 pairs and still use 4 pairs but, really, use only 3.

So, why the low hit rate? Each time I went to buy jeans, I went in attempting to solve a particular frustration. It was either trying to get a more comfortable pair or trying to find a certain color or, more recently, trying to find a more comfortable waist size. So, I always over indexed on that and ended up forgetting other my key priorities.

I abhor waste. My wife and I moved continents two years ago with just 6 suitcases that contained all of our belongings. And, we try hard to keep things simple and make the most of what we buy. So, thinking about this jeans hit rate does annoy me.

However, as writing here as taught me, mis-steps are simply learning opportunities. And, in that spirit, here are 3 simple steps to better buying decisions. One note before we get to the list – this is from a satisficer’s point of view. So, I view over-analyzing small decisions as waste as well. :-)

3 steps to better buying decisions –

  1. Envision success. What does success look like?
  2. Stack rank priorities. Make sure you have a list of 3-4 things that really matter to you.
  3. Keep this list of priorities with you when shopping.

The best part about this process is that it takes all of five minutes. However, the five minutes are well spent as they’ll save money and eliminate any unhappiness from unnecessary or uncomfortable purchases. And, given we spend a significant portion of what we earn buying things, it is worth the investment to do this right.

It is likely you do some version of this for your “big” purchases. However, I think it is worth doing for the small things as well – they add up.

Minimalism and efficiency are a beautiful thing. And, besides, excellence is not an act, but a habit.

Default setting

There’s plenty of great research that shows that our actions are heavily biased by the default option. Given how important defaults are to our decision making, every once a while, it is helpful to ask ourselves – what is our default setting?

For instance, we can choose to:

– Trust or to doubt.

– Take responsibility or make excuses.

– Read a non-fiction book or scroll further down our Facebook feed.

– Ask the hard question or stay silent.

– Acknowledge mistakes and learn from them or pretend they didn’t happen.

– Observe or judge.

– Save or spend.

– Respond with fantastic attitude or be defensive and prickly.

– Love or hate.

– Exercise or watch TV.

– Care or be ambivalent.

Whatever the decision, our actions are likely to follow our default setting.

It is on us to choose wisely.

Five career priorities

There are five career priorities –

1. Location
2. Industry
3. Company
4. Role
5. Team/people

Every career choice we make comes back to how we solve for these. We can make career decisions easier for ourselves by keeping four things in mind.

First, we ought to know that it gets harder to change multiple priorities. If you are trying to change just a role or team within your company, that is likely among the easier things to do. It is harder to change companies, industries, locations. And, of course, it is harder to change two or three things at a time. That doesn’t mean it can’t be done. It is just very hard. Location can be particularly hard for those who weren’t born with American or European passports. And, for most people, graduate school tends to a way to enable such change.

Second, every time you make a move, it helps to create a stack rank of these priorities. What are you trying to achieve? And, at what cost? It is rare you are going to end up with the perfect combination. You have to know what you are willing to trade off. Also, I’ve noticed that when most folks make career decisions, they focus on points 1-4. That is natural. There is just one problem – the people we surround ourselves with have a massive impact on our daily well-being. So, beware ignoring the team/people priority.

Third, the first two priorities are the hardest to solve for. So, if we can find a way to resolve this or simply eliminate them, it’ll ease any transition. For example, if you are focused on one industry, you can now focus on four priorities instead of five.

Finally, the best way to think about career moves is to layer a longer term / directional perspective. Instead of attempting to change multiple priorities today, look to work on changing one or two at a time. For example, you can make a move across industries within the same role as a starting point. Then, attempt to change role and so on.

As a bonus point, it is easy to second guess your past career decisions when you try to make changes. It is easy to look around and feel “behind.” But, it is worth reminding ourselves that we’ve gotten here by doing the best we could with what we knew.

Now that we know better, we will do better.