Making decisions the hard way!

Making decisions is part of life. How much I hate the effort or pain of taking decisions at times, I understood the implications of not taking decision much later in my life.

Not taking a decision is a very costly affair. It allows others take decision for you, and most of the time when that happened I didn’t like the outcome.

Hence, I am compiling my approach to decision making over here (look at my references for details).

Is that decision your to make?

This is the biggest decision to make. Before I lay a framework to evaluate it, I will write down some decisions that you need to take no matter what happens:

1. Whom to marry (50% of your life; a big deal!)
2. What to work on (33% of your life; should be really something you love)
3. Where to live (cities affect aspiration; NYC -> wealth; LA -> fame etc)
4. Where to work (with whom i.e. managers & for whom i.e. customers)
5. Your highest value investments. Both money & time invested. (Note: Bad investments made more people poor than over expenditure)

Outsourcing any of the above decision or leaving them to sheer luck is disastrous. If you haven’t thought about them, do it now.

Now, coming to the frameworks. There are two approaches:

1. Heuristic based: For intangible or subjective (but v. important) decisions
2. First Principles based: For relatively tangible decisions

1. Heuristic framework (credits: Naval Ravikant)

1. “When faced with a difficult choice, if you can’t decide the answer is no!”

Specially important for irreversible or long-lived decisions (like marriage, investment, career choice). Say ‘yes’ only when you’re certain. You’re never gonna be absolutely certain, but you can be “very positive”.

If you find yourself with a spreadsheet of pro’s and cons, forget it!

2. “If you have 2 choices to make, & they’re relatively equally difficulty (50–50), take the path that is more difficult & more painful in the short term.”

What the brain does through conflict avoidance is trying to push out the short term pain. If the two decision are even & one has short term pain, it means it has long term gain. Most of the gains in life come suffering in the short term, so you can get gain in the long term. (Ex. working out, confused while reading a book).

Hard choices, easy life. Easy choices, hard life.

3. “Make the choice that will leave you more equanimous (calmer and peaceful) in the long term.”

Peace of mind is the precursor to happiness. If you’re chasing happiness directly, what you’re actually chasing is pleasure and pleasure comes with a withdrawal symptom. Pleasure is a high and then you crash down. Actual happiness and content, comes from peace.

First Principles (credits: Donald Rumsfeld)

Three things are important in making decisions based on first principles:

1. Understand what you understand (what you know & don’t know)
2. Find biases, risks & regret (of yours & those who inform you)
3. Find “stupidly true” things & their connections
4. Weight the best & worst case scenarios and take a call

Understand what you understand

I remember the day my anxious level peaked highest in last decade. I was worrying about a work related challenge that was not in my control. One of my mentors then, introduced me to a framework to think about things which I found particularly helpful. It is to look at the “knowns & unknows” and list them down.

The important part over here is to make the list of all K-K, K-U & U-K. Note that this process requires us to think hard about what we precisely know. Hence helping us in understanding what is our current level of understanding.

An approach to make such a list, is to use the framework mentioned below:

After the listing is complete. Move to section two.

Find biases, risks & regret

Note that the first part is subject to a lot of bias. On your part & also with people who help you in your decision making. For example, in case of taking a job from campus placements, a big bias is how the placement committee is ordering the companies in the daily interview schedule.

You too may have many biases. Its better for your decision making to objectively lay down your biases and then evaluate. For ex: you might want to take that job offer which gives you more money rather than one which gives you less. These biases may not be harmful at all times. But when they do sting, it hurts bad.

The second part is to check out for risk vs reward, which is also related to regrets. Regret happens when don’t do something with a low risk high reward, assuming it to be a high risk low reward situation. Or do something with a high risk low reward, assuming it to be the other way.

For ex: Not going on a trip with your close friends assuming your manager will be offended due to taking more leaves. Its a low risk (assuming manager will be offended), high reward (getting close with friends) which was assumed the other way while making the decision.

On the second case, say if you are driving a vehicle fast on a crowded highway, to impress your co-passengers on your driving skills (high risk low reward), you may actually land an accident. Both situations lead to regret.

Always aim to minimize regret (the one which happens in the long run).

Short-run regret might happen. Though better to take them instead of long run regrets.

For ex: Not asking an acquaintance for a favor with money for your education, assuming the other person will think low of you. It has a potential for a ‘short-run regret’. Which will happen if the other person actually feels low of you. A ‘long-run regret’ is actually not taking money & not having that education. It will hurt you more when you look back and think “what if I was educated enough”.

I will come to this later on.

Back to original structure. What to do now?

Linking stupidly simple things

Say you have listed all K-K, K-U & U-K. And all the biases (your and others). And all the risk-reward scenarios. Now you are ready for the most difficult part of decisions making.

• Apply the Ks & Us, framework and list biases, risks, rewards
• Find the “stupidly true” parts which impacts your decision making. Find all of them. Try to link them up.
• Then see what all options you have & find the Best-Worst case scenarios using these “stupidly true” things.

Note, these are “stupidly true” things are fundamentally true. You cannot think of any scenario when they can be untrue.

An example: Climbing K2 in winters

Say you are an mountaineering expert who has climbed Mount Everest in winter season. Now you want to achieve a really historic feat. You got to know that no one has climbed Mount K2 in winter (actually never happened) and want to attempt that. You want to make a decision, whether you want to spend next 3 years in attempting to do that or to lets say, attempt winter climbs in all 8000m+ mountains except Mt K2.

Lets start with the Ks and Us:

K-K:
1. You know how to climb a mountain in winter.
2. You have a sherpa guide willing to assist you.

K-U:
1. What challenges are there to climb K2 in winter. Why it never happened?
2. What resources is required to assist you. Can you get them?

U-K:
1. Other mountaineers might also be trying to attempt it, can you collaborate?
2. What new tech is available to help you (like drones, night vision) that can help you with the climb in winter?

Biases:
1. Your understanding of your ability of climbing Mt K2 might be misplaced. If you haven’t climbed K2 in summer, then climbing in winter is too big an aim to be directly attempting.
2. The sherpa maybe in considering that he thinks you wont make the climb and would be getting back. He still gets his pay.
3. Other mountaineers might be attempting in isolation giving they also intend to make history (though separately). They might have less intent to collaborate.

Risk vs Reward:
1. Risk: What is the safety factor in this. Will you be able to come down if you wish to abort the mission. Will someone rescue you in case if its required. What’s the probable worst that can happen and absolute worst.
2. Reward: Is the feat really that big? Would it be really be that historic to make a winter climb on Mt K2 vs other things that you can do? Are you baised in your assessment of reward or do you have solid consensus that this feat being big is “stupidly true” (as making first climb on Mt Everest was for Hillary and Norgay).

Note: I have not listed all the parameters in Ks and Us. Ideally the list should be painfully comprehensive.

Now list down all the “stupidly true” things and link them up.

1. Making K2 climb requires skill in climbing K2 → That is a must pre-requisite given difficulty of K2 > Everest → Need to do a summer attempt before a winter attempt
2. Winds are too fast in winter all the time → Helicopter cannot land near K2 camps → Rescue mission won’t happen in case of disaster → Only climb in case if skills and weather are much beyond better → Assess what is ‘better’ skill and weather

Make this list until all such stupidly true things are linked up to make sub-decisions… then link those sub-decisions.

Linking of sub-decisions need to be done in a way so that all important aspects which affect the decision are covered. If ‘something’ is not covered. Find the ‘stupidly true’ element which affects that ‘something’ and then work your way up to establish its link.

Weigh the Best & Worst case scenarios to take a final call

At last once you have identified all the sub-decisions, you can lay down what is the best case, worst case and most likely scenario for you. You might land in a situation like below:

After assessing all things, you need to weight the best case scenario & worst case scenario among different options. That ‘different’ option can also be nothing! I.e. you choose to not climb K2 or any other peak in winter with an attempt to make history. You just climb in summers, as an enthusiast. In that case, the default option-2 is what is your minimum expectation of the best case scenario (like getting a guinness world record or something) and worst case scenario (expectation being no death in your expedition).

Your ideal outcome is to go with options have better “best case scenario” and less worse “worst case scenario”. If you can’t find such a scenario, and land in that 50–50 zone we talked earlier; go back to the heuristic decision making framework. Now, take a decision.

Hope this helps in taking better decisions.

Approach inspired by: Donald Rumsfeld & Naval Ravikant

If you wish to seek more brainstorm on any of this topic, or want to give feedback on this approach. Do write to me.