10 Ways To Make Better Decisions
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Many of the decisions we make every day are subject to uncertainty. Should I accept the job offer? Should I start that business? Should I marry my partner?
But what process should you use? This article breaks down 10 tips for making better decisions under uncertainty; from when to rely on the wisdom of the crowds to why simple formulas can sometimes make for optimal decisions. You will also discover why taking the ‘outside view’ and practicing second level thinking can give you the edge on your competition. Each tip includes at least one action that you can introduce into your everyday life.
Tip number 1: Embrace uncertainty
On 29th April 2011 former US President Barack Obama made one of his most difficult decisions. He had to decide whether to launch an attack on a compound in Pakistan that intelligence agents suspected to be the home of Osama bin Laden.
First, he was uncertain that bin Laden was actually residing in the compound. “As outstanding a job as our intelligence teams did,” said the President, “At the end of the day, this was still a 55/45 situation. I mean, we could not say definitively that bin Laden was there.”
Second, regardless of whether bin Laden was residing in the compound, it was uncertain that the operation would succeed. “You’re making your best call, your best shot, and something goes wrong — because these are tough, complicated operations.”
There are two forms of uncertainty: hidden information and randomness. Obama had to grapple with both of these on that night in 2011.
First was the uncertainty of hidden information. For example, was bin Laden in the compound? Second was the random uncertainty of all the possible ways the mission could unfold. For example, the possibility of mechanical failure.
Many of the decisions we make every day are also subject to the same types of uncertainty. Do I accept the job offer from the successful start-up company?
How embracing uncertainty can make you a better decision maker
- You know the limits of what you know: There are very few things that we can be 100% sure of. By embracing uncertainty you are better able to assess the likelihood of chance events happening.
