Why is it so hard to make sound decisions? We fall victim to simplified mental routines that prevent us from coping with the complex realities inherent in important judgment calls. Yet these cognitive errors are preventable. In Think Twice: Harnessing the Power of Counterintuition
, Michael Mauboussin shows you how to recognize-and avoid-common mental missteps
When to think twice?
You needn’t think twice before every decision. We all make a lot of decisions every day, and the stakes are very generally low. Even when they are not low, the best course is often obvious enough.
Think Twice’s value comes in situations where the stakes are sufficiently high and where your natural decision-making process leads you to a suboptimal choice. So you must learn about the potential mistakes (prepare), identify them in context (recognize), and sharpen your ultimate decisions when the time comes (apply).
Put yourself in the shoes of others
Considering the point of view or experience of other people is one of the most powerful ways to facilitate better decisions. This mind-set is vital on a number of levels.
- The first is embracing the outside view.
- Thinking about the power of the situation is also essential.
- Considering what motivates the decisions of others, especially when those decisions affect you, is also essential.
- Developing empathy.
Recognize the role of skill and luck
The outcomes we see in realms like business, investings, and sports are the combination of skill and luck. But most people don’t do a good job of considering the relative contribution of the two.
When luck is prominent in shaping outcomes, you should anticipate that reversion to the mean will make it likely that extreme outcomes are followed by more average outcomes. The bigger the part that luck plays, the more data you’ll need to properly disentangle the components of skill and luck.
Get Feedback
One of the best ways to improve decision making is through timely, accurate, and clear feedback. This type of feedback is central to deliberate practice, the essential ingredient in developing expertise.
If you are serious about improving your decisions and are open to feedback, there is a simple, inexpensive technique of great value–a decision-making journal. Whenever you make an important decision, take a moment to write down what you decided, how you came to that decision, and what you expect to happen. A well-kept journal offers a pair of benefits:
- The journal allows you to audit your decisions.
- Another benefit is the potential to find patterns.
Create a checklist
When you face a tough decision, you want to be able to think clearly about what you might inadvertently overlook. That’s where a decision checklist can be beneficial.