As a reader of lots of books, I sometimes find it difficult to remember everything that I want to remember from a book. I am like most people in that I highlight or circle certain parts of text when I am reading an actual hard copy of a book. Something I have done for years, is take those notes and put them in my journal. Well, now instead of putting them in my journal for only me to see, I have put them here so you get the benefit of them.
This book summary is not really a summary. It give you the gist of the book. But this summary is really my highlights and my notes that I pulled from the book. The information I thought was cool and important. I hope you find it to be useful as well.
Decisive (How to make better choices in life and work); by Chip Heath and Dan Heath. Click here to purchase the book from Amazon.
This book is one that I have looked at many times over the last two years, but I always thought to myself. I make good decisions, what could I possibly learn about decision-making? So I never bought the book, until now. I have to say, this book has taught me a lot, and my hope is that you read my notes and decide to buy the book.
Four Villains of Decision Making:
- Should I do this or that? Instead ask yourself, is there a way I can do this AND that?
- Be aware of the conformation bias and do whatever you can to fight it off. Confirmation bias is when we think or know we believe a certain way, our minds immediately look for information to confirm what we already feel or believe. It happens to us all more frequently than we would like to admit.
- Short term emotion: When we make decisions based on emotions only and don't seek out a different perspective.
- Overconfidence: People think they know more than they actually do about how the future will unfold.
- You encounter a choice. But narrow framing makes you miss options.
- You analyze your options. But the conformation Bias leads you to gather self-serving information
- You make a choice. But short-term emotion will often tempt you to make the wrong one.
- Then you live with it. But you'll be overconfident about how the future will unfold.
- Then I personally would add a fifth: You become too attached to the decision from an ego perspective that you won't change the decision. (not in the book)
Sometimes the hardest part of making a decision is knowing that there's one to be made.
In the book the authors recommend this process:
W Widen your options
R Reality Test your assumptions
A Attain distance before deciding
P Prepare to be wrong
Opportunity Cost with decisions: Everything comes down to opportunity cost. What am I giving up when I make this decision.
EX: If I chose to spend my money to go on a vacation for four days. The cost is the money for sure. So what else could I have done with that money instead of taking the vacation. You could have paid off debt, you could have saved for retirement, you could have purchased something that you really needed.
We make opportunity cost decisions all of the time. Some are not too costly, because you never actually feel them, but what if your budget truly is limited. Your time is truly limited. Then weighing in opportunity cost is critical.
A study in the book shows that when presented with the actual opportunity cost of something, people make better decisions.
Example from the book:
Imagine that you have saved your money to purchase a video. The video is $14.99. It has your favorite actresses and actors in it. You have always wanted to see the movie and you have actually been thinking of purchasing it for quite a while.
The researchers asked people to check A or B.
A) Buy this entertaining video
B) Not by this video
Given the choice, 75% bought the video and only 25% passed on buying it.
Later the researchers asked a different group of people the same questions with the same scenario. Except they asked it this way.
A) Buy this entertaining video
B) Not buy this video. KEEP THE $14.99 FOR OTHER PURCHASES.
Do we really need to be reminded that if we don't purchase we can do something else with the $14.99? Apparently so, because the results were different. 45% decided not to buy the video. Simple reminder helped twice as many people not buy the video.
How would these reminders impact your decision-making?
When making a decision force yourself to find other options, because it is very clear that we can find different options when we are forced to do so, and we make better decisions.
Ask yourself this question: If all of the options I am currently looking at disappeared what would I do instead?
When pursuing a project a manager can ask for three different options. Multi-tracking as it is called in the book. This does several different things for the employee when you multitrack.
1st. If you only have one option that you have put all of your eggs in to. It makes it harder to get over your ego when you get feedback on that one option. Its harder to hear the truth.
2nd: It does a way with politics. Because if you have several people working on a project pursuing different options, it helps keep egos open-minded.
Prevention mindset versus promotion mindset. In a study of 4,700 public companies decisions during recessions in 1980, 1982, 1990, 1991, 2000 to 2002. A group of researchers studied the decisions the leaders made at these companies during these tough times. They found that the leaders who did a fair amount of prevention such as cut backs, layoffs, cutting expenses as needed coupled with investing in talent, training, new products, etc. fared better than the companies that just did one or the other.
Most companies focus on too much of either prevention or promotion. Both can be detrimental to decision-making and success. You have to combine both.
When faced with a problem another way to apply a decision-making process to making better decisions, is asking who else has faced this problem before? Ask others. Secondly, researchers and scientists looked at analogies to find the answers to a lot of issues. Analogies have a way to make the problem more clear and it proposes certain ways to address the problem or decision that needs to be made.
Ask yourself "What would have to be true" for this to work. This question framed up this way allows people to dissent without sounding disagreeable. When providing feedback just ask "What would have to be true for this option to be the very best choice?"
When we assess our choices we automatically take the inside track. We have to condition ourselves to look at it differently.
We are really bad at predicting the future. All of the so-called experts get it wrong most of the time. Stop trying to predict the future an instead use other tools where possible.
The one they recommend is ooch when possible. Meaning if you can ease into the situation without going all in, do so. For examples: all studies show that leaders are really bad at interviewing and a so-called "great interview" with a candidate usually ends up being a bad hire. A better predictor is actual work or grades from school, more so than an interview. Instead of hiring someone can you offer them a short-term contract and see how they do? This is called ooching before making the full decision, test it out.
Researchers have discovered over and over that people act as though losses are from two to four times more painful than gains are pleasurable.
In one study researchers gave half a class on a college campus a coffee mug with the university's log on it. The students who weren't given a mug were asked, "How much would you pay for the one of those mugs?" On average they said $2.87.
The surprise came from the students who'd received the mugs. Asked what price they'd sell the mugs for, they reported they couldn't part with them for less than $7.12.
Five minutes earlier, all the students in the class would have presumably valued the mugs at $2.87. Yet the students who received the mugs grew attached to them in the span of a few minutes. The perceived pain of giving up their new gift made it unthinkable to sell at $2.87.
Loss Aversion is a real thing. Think about it. As the research suggests a simple coffee mug causes people to want to charge two an a half times the price of what they would have said it was worth. This makes the point that when it comes to decision-making that we all are more worried about what we lose versus what we could gain. This causes us to not make a decision usually and stick with the status quo. We have to find a way to fight this.
Researchers have confirmed over and over again that when we give advice to others that we think about the bigger picture pretty easily, but when we think of our own decisions we get stuck in the weeds. That is why it is so important to get an outsiders perspective.
The authors suggest that when you have a decision to make ask yourself this question "What would I tell a friend in this same situation to do?"
When it comes to decision-making we all must make our priorities list. By doing this it allows you to make decision better and quicker. If you don't know what your priorities are or values then when put in a situation you wont have any guard rails that can help guide your decisions.
Our calendars are great scoreboards for our priorities. Jim Collins the author of "Good To Great" says this. When it comes to prioritization and managing your time, everyone needs a stop doing list. What do you need to stop doing.
We can't control the future, but with some forethought, we can shape it.
Prospective Hindsight: Is a term that the authors used when thinking about a decision. Here is their example:
How likely is it that an Asian American will be elected president of the United States in November 2020? Jot dow some reasons why this might happen.
Prospective Hindsight spin on this.
It is November 2020 and something historic just happened: The United States just elected its first Asian America president. Think about some reasons why this might have happened.
The second way it is asked gets you to think differently about the scenario. It asks you in a way to make you feel different about it. The authors suggest that you approach situations like this. Work backwards from the decision, this allows you to think about it more clearly.
Use trip wires to help you make a decision. A trip wire is simple. It is built-in system that tells you when to act. Example: A lot of people have heard the story about Divas in the music industry or in certain professions. That they require certain items in their dressing rooms, certain food, etc.
One famous incident of this is Van Halen. Van Halen was one of the biggest bands of all time. When they were touring back in the early 1980's their concerts were unbelievable. Their elaborate stage designs, pyrotechnics, and everything else that went with their performances made them legendary. Traveling around the country setting these elaborate performances up required them to contract with various companies in a local market where they were playing a show to help them achieve this. The contracts they had with all of the specifications of what was required to set these stages up, were like books. But to ensure that it was done correctly every single time. Van Halen set a trip wire into the contract. There was no way for the band to actually check to ensure everything was done like it was supposed to be done. So this trip wire helped them do this.
In all of the contracts Van Halen required a bowl of M&Ms's on the stage with all of the browns M&M's taken out of the bowl. This was the trip wire. Instead of checking every single thing with the stage and all of its production. They could just walk over to the bowl of M&M's, if the company actually read the contract. No M&M's, they really didn't read the contract. M&M's and brown ones included, means they didn't read the contract either.
This trip wire that Van Halen used allowed them know when they needed to check closer or not. This is what a trip wire can do for you. It lets you know when you need to do something immediately.
Boundaries are necessary because of people's tendency to escalate their commitment to their choices.
I highly recommend this book for people to read. All of us our making major decisions on a daily basis in our work or in our personal lives. How much thinking are we actually putting into those decisions? The chances are not enough. This book has equipped me with a few other things to do and be aware of when I am making decisions. Most importantly conformation bias.
I hope you found this book summary to be helpful. If so please share with someone you know.