EXPOSE | There is No “Free-way” to Making a Good Decision
“Good decisions come from experience. Experience comes from making bad decisions.” – Mark Twain
EXPLORE | The Art of Instinct
No doubt there is a little pain on the path to good decision making. When we skirt the necessary upfront time it may take to get all the facts, and lean on weak instincts to make haste, we make it unnecessarily painful. Instincts can be very helpful, if they are properly informed. After all, don’t we often say that “your first instinct is usually right” and “intuition doesn’t lie”?
I’m familiar with “going with your gut.” This ‘art’ was something I became aware of early on in my nearly 15 years working in radio. Success in radio is all about increasing listeners and listening. The better the mix of music, the better chance you have of attracting, and keeping, listeners. Doing so meant an increase in ratings, which increased the rate card, which led to increased revenue.
But in order to see that success, you needed to be able to “pick the hits.” You were limited by time (only 60 min in an hour), and far too many songs to pick from. To this day, radio struggles to get accurate and/or complete data on listeners and their preferences. So, what is a music programmer to do when they don’t necessarily have the science? You develop your instincts. You learn to piece together the slices and chards of information to make the best decision possible. Those in the radio industry that did that well, developed the gift of “the golden gut.” They were so connected to their audience and their station, they could “pick the hits” and pull in the listeners and listening to make their stations successful.
Which is to say, “the gut” is not something your born with. It requires the training that only experience can provide.
“The world is a lot more complex than our gut is likely to comprehend, at least without training. Train your gut, get better instincts.” – Seth Godin
I like to think of instinct as being a balance of the art and science of decision making. The art comes with experience, and the science begins with the right decision making process and can be refined to allow you to make the best decision possible, in the least amount of time.
EXECUTE | Decision Analysis and a Good Heuristic
I have been wading through some courses on Coursera recently. If you’re not familiar, Coursera offers courses taught by college professors that you can audit for free. One of my classes focuses on decision making; a vital skill to possess regardless of your level of influence or stage of life.
We don’t always have the time, or the need, for more involved decision analysis, but Seth Godin makes a good point about improving instincts. By having a solid decision making process and reducing subjectivism, we can increase accuracy when making a decision.
Decision Analysis
In his Foundations of Everyday Leadership track, Gregory Northcraft, Professor of Business Administration at the College of Business, University of Illinois at Urbana-Champaign, provides a framework for good decision making. Essentially, there are three components involved in making decisions:
– Action (options) – what are your available options? What are the “if-then” statements that will reveal possible actions to take?
– Uncertainty (probabilities) – what do you know about what you don’t know? Where is your understanding the weakest? Are there people or processes that can help you alleviate uncertainty?
– Outcomes (goals) – what is it you need to achieve? What are acceptable, even desirable, outcomes?
When we care to make a good decision, we’re more concerned about selecting the best available option(s) to accomplish our goal, or desired outcome. However, uncertainty complicates this process. While we may have a good idea about the actions or options we need to consider to accomplish our specific goals, our bias and the subjectivity of uncertainty can delay and even derail us from reaching our destination.
Hone Your Heuristic
Our ‘decision analysis’ needs to properly navigate uncertainty in order to select the best action option(s). To flesh out subjectivity and our bias, we need to take a closer look at our heuristic. Heuristics are those “cognitive “shortcuts” that help us fill in the blanks when there is too little information and limits our search when there is too much”. How are we cheating ourselves out of the facts by assuming or concluding too quickly?
Two common biases are anchoring and framing. “Anchoring means being influenced by a reference number when estimating.” We tend to rely too heavily on the first reference we come across. For instance, if I asked you if Mt. Everest is higher or lower than 20,000 ft. you’d have 20,000 ft. as a reference that will influence your response. While framing is “being influenced by whether the choice is presented in terms of losses or gains.” It has to do with risk. We tend to be risk-averse to protect gains, or risk-seeking to prevent losses.
Developing a more thorough, or valid, heuristic refines your decision making process, and over time, will improve our instincts. Better decision making will become more habitual, and maybe spare us a few of the bumps and bruises on the path to making good decisions.
Further Reading:
Everyday leadership foundation (coursera.org)
