Once I started thinking about decision making in the context of creating new ideas I found a few reasons to dig deeper. For one, decision making is an essential part of the method that we use internally to iterate a fleeting thought into an idea that solves an important problem or an old problem in a better way. Two, this process is often overlooked even in important business decisions. Lastly, according to this blogger’s testimony we make as many as 35,000 decisions each day, which is reason enough in itself.
With all these decisions happening I wondered, what constitutes a good decision maker from a bad one. I quickly found that this subject is way beyond the scope of a blog post, but I did find some useful information that puts a framework on a process we often perform in the background of our minds. I broke the process down into four steps.
Step 1: realize the opportunity cost of decision making
The New York Times reported on an MIT study about decision making. The test subjects (ultimately this could have been anyone on the web in 2008) were to choose between shapes and determine which was bigger. The more correct answers you got the better. Catch was that the size difference from question to question could be anywhere from was 2 – 25 %. The study found that poor performance was related to wasting time trying to differentiate shapes with only a 2% difference instead of just guessing and moving onto an easier comparison. Crunching the numbers shows that participants spent, “64 percent of their time deciding between similar shapes, and only 36 percent of their time choosing between dissimilar shapes, Dr. Ariely reports.” Almost everyone would have done better if they had weighted in the opportunity cost (the amount of time wasted on tough decisions vs. moving onto easier decisions).
The point is when it comes to decisions of equal importance, there is no benefit to spending more time on the difficult ones. What color to paint the kitchen, yoga or spinning class, where to eat, how long to stay at our current job or get a new one? They mean different things to different people, but are overall not worth a great deal of effort to solve. So that puts an important stipulation on decision making in that you stand to lose out by not making it at the opportune time, or in missing out on other things while waffling. This might be called dithering or decision paralysis, and I often hear it associated with the term fear of failure.
To get over decision paralysis sometimes simply picking a route and trying it out is best according to the “life’s an experiment approach.” The knowledge gained, for better or worse, makes the next decision in that space more informed.
Step 2: weight your options & when stuck, experiment by choosing one of the options
Got it, but still how do I make better decisions? There are about 357,107 amazon search results for the term ‘decision making’ leaving the finer details of this to an expert. However I’ve been through this process recently and I found the tool we used to be very attractive (when time permits), which was a matrix. We were stratifying the market opportunities for a medical device and had about eight medical problems the device could realistically attempt to solve. The matrix consisted of the potential applications across the top and the methods of evaluating the application in the left column, such as cost of clinical trial, overcoming competitors, market size, fit with company IP, etc… We could score and weight certain criteria by application and determine an overall ‘fit’ for the device in each market opportunity. There are web resources available to follow this method and the graphical representation of the outcomes (e.g. a bubble chart) are often easy to interpret and make a stunning slide for a venture capital pitch.
In short, this step consists of deciding the options are, framing them in the context of your hierarchy, and applying the potential risk/benefits. Be sure to check emotional and gut reactions, such as overemphasizing an option connected to a positive experience regardless of its impact on the project. One of my favorite quotes from Einstein encompasses this, “a man should look for what is, and not for what he thinks should be.”
Aside from emotions, decision fatigue can also be a negative contributor to the process.
Step 3: quantify or record the outcome
Next we record our results. There seems to be a theme of scientific method in the last couple blog posts being that it applies to decision making as well. Here we are using ourselves as the subject and choosing our own “treatment group.” I think we’ve heard this time and again that sticking to the decision is critical here. They say that will-power is strengthened, like a muscle, rather than inherent.
Quantifying a decision’s outcome objectively may not be possible, but attempting to do so could be a great benefit and exercise. However, simply recording the experience in some way may suffice such as a picture or a blurb in a journal.
Step 4: when faced with future decisions, utilize past knowledge
When faced with the same or similar decision later, we are expected to get a more favorable outcome when past experience is considered. Since we’ve recorded our single subject experiment there is a previous outcome to review and use to guide future decisions. This is where objective, rather than subjective measurements are useful.
Step 5: fail as quickly and often as possible.
I can’t understate the importance of this. I first heard this in grad school in a number of ways from a number of people, and accepting this advice was difficult, but one of the best things that helped me in becoming a better researcher. As far as start-up companies go I’ll point you to some of the many results on why and how to fail fast…
500 Start-ups: http://500.co/2011/02/23/fail-fast-often-by-design/
Washington Post: http://www.washingtonpost.com/blogs/innovations/post/the-new-fail-fail-fast-fail-early-and-fail-often/2012/05/30/gJQAKA891U_blog.html