How to Make Better Decisions | Jerome Shore
Last week I had breakfast with a friend who is looking for a new job. He had received an offer which he thought was a low opening bid to which he countered with a more generous deal and a detailed rationale. Based on our combined experience on both sides of job offers we thought he had done exactly the right thing. I actually thought the quality of his reply well justified his counter offer.
But after four days my friend had heard nothing except being asked to wait a little longer. He was agitated because he thought he was a victim of bad luck. His backbone was weakening. He felt no news was most likely bad news. That ‘hypothetical horrible’ was leading him to think that his counter offer was seen as way too aggressive and “pissed off” the potential employer. He was almost ready to make a decision to capitulate and take the original low ball.
What had happened? My friend let the magnitude of the hypothetically horrible outcome unduly influence his evaluation of his situation. Even though his original reply was excellent he was interpreting the non response as a very bad sign. So without knowing the actual feelings on the other side he was letting a low likelihood outcome potentially lead to a bad decision on his part.
You will probably agree that making the best decision every time will reap the best results long term even if from time to time luck yields a bad result.
There are many situations where luck has little to do with the outcome. The game of chess is an example. Your opponent is not a variable unless they are hit by lightning during the game. And the pieces on the chess board are all in view. Nothing unexpected will happen by chance.
Poker is the opposite. Luck has a lot to do with the outcome because at least some of the opponents cards are hidden.
Life is much more like poker than it is like chess. So much of what happens to us results from random occurrences totally out of our control.
And it is for that reason that we must make our decisions with only appropriate regard to the odds of a bad outcome.
Here are ten benchmarks to help you make better decisions about what to do when you’re faced with choices:
- Frame the decision correctly so you’re analyzing the right situation.
- Get your feelings under control. Be determined not to let incorrect pessimism or optimism unduly influence you.
- Make irreversible decisions slowly. Make reversible decision faster.
- Determine the most important information and prioritize it. Don’t let relatively unimportant facts persuade you.
- Consider multiple options if you can including ‘doing nothing [now]’.
- Make your decisions less personal. Try to look at the decision as if you were advising a friend or client.
- Look out for confirmation bias. Some people give too much weight to criteria that match their beliefs and too little credence to information that doesn’t support preconceived notions.
- When necessary ensure that whatever decision you take can lead to an action plan rather than a dead end.
- Do a potential problem analysis. Know in advance what you will do in case something goes wrong.
- Get a more expert perspective if you can. Seek support from people who know more than you do.
Now back to my friend. He’s in a situation where the odds of something bad happening are slight. He’s received an offer signalling that the employer wanted him. He had countered in a wise considered manner to a professional on the other side. It could only be a low percentage unexpected reaction to his counter offer that could produce a bad outcome.
And yet he was allowing that low percentage possibility to dominate his thinking and possibly persuade him to make a bad decision and take the first low ball offer.
Don`t let the emotional power of hypothetical horribles disturb good judgement.
Jerome Shore is an Executive Coach in Toronto, Canada. Clients to look to Jerome for help with Marketing, Leadership and Stress Management. He can be reached at firstname.lastname@example.org or 1-416-787-5555.