Deep Dive Study Guide On Decision Making: Decisive (Making Tough Decisions And Overcoming Bias and Emotion)
Last Updated August 14, 2021
Here's what's on this page:
The Book & Official Resources (link to buy the book, podcasts by the authors, and supplementary PDF materials)
Free Video Course (short videos explaining the main concepts in the book)
4 Villains of Decision Making - detailed look at the main forms of cognitive bias that affect our decision making process
WRAP Framework - detailed look at the framework developed by the authors to make better decisions
Start Here
⇨ The Book & Official Resources ⇦
📗Get the Book: Decisive by Chip and Dan Heath
🎙 Podcast: How To Be More Decisive by Heath Brothers
🎙 Podcast: Decisive for Job Decisions by Dan Heath
📺 Video: Being Decisive by Chip Heath
12 Decision Situations (from the book)
6 Questions That Yield Better Decisions
Overview
We celebrate the athlete that can perform under pressure. The one who wants the ball with the clock ticking down and the game on the line. Make the shot, and you're a hero. Miss, and be forgotten. Most of us will never experience that thrill first hand. We do, however, make decisions on a daily basis. The decisions we make have varying consequences.
Do I take this job, or stay at my current one? Hire this employee? Which restaurant to eat lunch at? Go back to grad school? What kind of car to buy? Purchase a certain software for my business?
Some decisions are more difficult than others. They carry large levels of risk and reward. Getting a decision right can make or break an organization. Are you Netflix, or are you Blockbuster? The decision made at the top affects the entire trajectory of a company. Thinking of it that way, it starts to seem a lot more difficult than hitting a game-winner. You have to nail multiple decisions on a daily basis.
Of course it's risky and painful. That's why it's a rare and valuable skill. - Seth Godin
The good news is that decision making is a skill. That means it is something that can be worked on. It can improve. You can get better at it. It requires intentional effort.
Occam, Hobson and Wheeler were all scholars of something humans are fabulously bad at: deciding among multiple options. Getting good at this is a skill, something we can do better if we choose to. That might be the first decision. - Seth Godin
It requires understanding the factors that prevent you from making a good decision, and knowing the steps you need to take to systematically make better ones.
In a recent McKinsey Quarterly survey of 2,207 executives, only 28 percent said that the quality of strategic decisions in their companies was generally good, 60 percent thought that bad decisions were about as frequent as good ones, and the remaining 12 percent thought good decisions were altogether infrequent. -Farnam Street, What Matters More in Decisions: Analysis or Process?
The good news is you're not alone. Decision making is something everyone struggles with, even the best executives. In fact, this is precisely why stories about Steve Jobs wearing the same clothes every day became so famous. They were reducing the amount of decisions they made so they could focus on the decisions that really matter. The higher up you go, the more valuable this skill becomes. In fact, it becomes your job description.
This resource page (best used in conjunction with the book) will help provide the tools you need to get consistently better at making decisions for your business or organization.
4 Villains of Decision Making
There are all kinds of biases that affect our decision making. The Heath brothers have outlined 4 of the main ones, and then given a step to counteract each of these (those 4 steps form the 'WRAP' framework).
Let's start with a story about banana bread.
📊Infographic: 20 Cognitive Biases That Screw Up Your Decisions
Narrow Framing
Ramit Sethi always gives this great example of narrow framing: A student applying to a college asks, "Should I take the honors class and make a B, or a regular class and make an A?" And they are told, "Actually, most of our students take the more challenging class and make an A."
Narrow framing is another way of saying we often paint ourselves in a corner when we don't need to. Should I focus on getting good grades, or freelancing? Do both.
Should I buy a new car or not? That one does sound like there are only 2 options. Sometimes the question itself needs to be rethought - What is the best way to spend this money to help my family? It forces you to consider options that otherwise would not enter the equation.
Should I break up with my partner or not? This is better reframed as 'What are the ways I could make this relationship better?'
See Also:
Opinions and Organizational Theory (Farnam Street) - "If we really wanted to do the work necessary to hold an opinion we'd have to: read the document from start to finish; talk to anyone you can find about the proposal; listen to arguments from others for and against it; verify the facts; consider our assumptions; talk to someone who has been through something similar before; verify the framing of the problem is not too narrow or wide; make sure the solution solves the problem; etc. So we don’t do the work. Yet we need an opinion for the meeting, or, perhaps more accurately, a sound-byte. So we skim the document again looking for something we can support; something that shows we’ve thought about it, despite the fact we haven’t."
Confirmation Bias
We tend to collect and select information that reinforces our preexisting attitudes, beliefs, and actions. This is a tough one because most of us know it is there, yet it is still hard to overcome.
Think about every time you've ever wanted to buy something and justified it to yourself instead of looking for ways to postpone a purchase (hint: new iPhone).
See Also:
The Hidden Biases in Big Data (Kate Crawford, Harvard Business Review) - "Data and data sets are not objective; they are creations of human design. We give numbers their voice, draw inferences from them, and define their meaning through our interpretations. Hidden biases in both the collection and analysis stages present considerable risks, and are as important to the big-data equation as the numbers themselves."
Identifying the Biases Behind Your Bad Decisions (John Beshears and Francesca Gino, HBR) - "[E]ven though we know a lot about how biases like overconfidence, confirmation bais, and loss aversion affect our decisions, people still struggle to counter them in a systematic fashion so they don’t cause us to make ineffective, or poor, decisions. As a result, even when executives think they are taking appropriate steps to correct or overcome employee bias, their actions often don’t work."
How Warren Buffet Avoids Getting Trapped by Confirmation Bias (Roger Dooley, Forbes) - "To avoid confirmation bias, Buffett acknowledges that even his decisions could be swayed by this brain bug - an important first step - and then gives voice to opinions that contradict his own. At the recent Berkshire Hathaway annual meeting in Omaha, Buffett invited hedge fund trader Doug Kass to participate. Kass is a critic of Buffett and his investment style, and is actually betting against Berkshire Hathaway stock by shorting it."
Confirmation Bias (PersonalMBA) - "Paying attention to disconfirming evidence is very difficult — it’s looking for reasons you might be wrong, and we usually hate to be wrong. Seeking disconfirming evidence will either show you the error of your ways or provide additional evidence for why your position is actually correct—as long as you suspend judgment long enough to learn from the experience. Actively looking for disconfirming information is uncomfortable, but it’s useful, whatever you ultimately decide."
Mental Model: Confirmation Bias (Farnam Street) - "Gilbert wrote, “when our bathroom scale delivers bad news, we hop off and then on again, just to make sure we didn't misread the display or put too much pressure on one foot. When our scale delivers good news, we smile and head for the shower. By uncritically accepting evidence when it pleases us, and insisting on more when it doesn't, we subtly tip the scales in our favor.""
Short-term Emotion
We can have all the information in the world, but it doesn't make a decision any less agonizing.
Think about the process of buying a home. There is a mathematical side to it - how much it costs, how much you can afford, anticipated expenses, location, school district, square footage, and so on. But then there is how the house feels when you walk in, and justifying buying the house that "feels like the one."
See Also:
How Anger Derails Team Decision Making And 5 Ways To Fix It - Anger sows discord in teams who might otherwise be trusting and productive because it causes us to dismiss or attack other people’s opinions and narrow our view of the world. As a result, if the leader of the team is angry, then the rest of the team 1) may not listen, 2) probably won’t share opposing views and 3) is unlikely to be heard if they do.Anger damages team decision making even when everyone is angry together.
Mental Model: Bias from Liking/Loving (Farnam Street) - "The decisions that we make are rarely impartial. Most of us already know that we prefer to take advice from people that we like. We also tend to more easily agree with opinions formed by people we like. This tendency to judge in favor of people and symbols we like is called the bias from liking or loving. We are more likely to ignore faults and comply with wishes of our friends or lovers rather than random strangers. We favor people, products, and actions associated with our favorite celebrities. Sometimes we even distort facts to facilitate love. The influence that our friends, parents, lovers and idols exert on us can be enormous."
Overconfidence
Overconfidence comes when we don't know what we don't know ('unknown unknowns'). We take the information that is close at hand, and draw conclusions based on that. Take the story of Blockbuster and Netflix. Instead of deciding to change their business model to compete with Netflix, Blockbuster assumed that based on their past success, they would be able to stamp out their competition. In fact, in almost any industry or company that has been 'disrupted', there has been an element of overconfidence at play.
Overconfidence can also happen in entrepreneurial ventures. We often celebrate and laud people who go all in, max out their credit cards, empty out their savings, and put it all into something they believe in. Sometimes it works. We often don't hear about the times where it doesn't work though (those stories aren't as fun to tell). That is a result of overconfidence. And to get a bit meta, it also highlights a certain type of confirmation bias as well in regards to the stories we want to share and believe.
See Also:
Fooled by Experience (Emre Soyer and Robin Hogarth, Harvard Business Review) - The problem is that we view the past through numerous filters that distort our perceptions. As a result, our interpretations of experience are biased, and the judgments and decisions we base on those interpretations can be misguided. Even so, we persist in believing that we have gleaned the correct insights from our own experience and from the accounts of other people.
WRAP Framework
The goal of decision making is not to eliminate the biases. That goes against human nature. Rather, the model proffered below provides a framework for counteracting them.
At its core, the WRAP model urges you to switch from "auto spotlight" to manual spotlight. Rather than make choices based on what naturally comes to your attention - visceral emotions, self-serving information, overconfident predictions, and so on - you deliberately illuminate more strategic spots. You sweep your light over a broader landscape and point it into hidden corners. - Decisive
W - Widen Your Options
Widening your options counteracts narrow framing.
This is easy to understand when we look at teenagers. They might ask a question like, "Should I go to this party or not?" When this is the singular focus, there are only two options. Everything else gets ignored. If the spotlight is shined elsewhere, the question may become something more like, "Should I go to this party all night? Or go to the movies with friends? Or attend the basketball game and then drop by the party for a few minutes?" With narrow framing, they view only a small number of the options available to them.
Chip and Dan Heath say most organizations end up doing the same thing with their decision making. In short, we get stuck figuring out 'whether or not' to do something as opposed to seeing 'is there a better way' or 'what else' can be done.
One way to widen your options is with the Vanishing Options Test. In general it is to say: You cannot choose any of the current options you're considering. What else could you do?
In the book the Heath brothers mention an effective strategy that Sam Walton used. He would ask himself, "Who else is struggling with a similar problem, and what can I learn from them?"
See Also:
Diverse Teams Produce Better Decisions (Stanford Business) - "Recent research by Deborah Gruenfeld of Stanford's Graduate School of Business suggests that teams encompassing at least two separate points of view on a particular question make better decisions because the pressure of the minority forces the majority to think more complexly and consider diverse evidence."
Outsmart Your Own Biases (Harvard Business Review)- "We’re cognitive misers—we don’t like to spend our mental energy entertaining uncertainties. It’s easier to seek closure, so we do. This hems in our thinking, leading us to focus on one possible future (in this case, an office that performs as projected), one objective (hiring someone who can manage it under those circumstances), and one option in isolation (the candidate in front of us). When this narrow thinking weaves a compelling story, System 1 kicks in: Intuition tells us, prematurely, that we’re ready to decide, and we venture forth with great, unfounded confidence. To “debias” our decisions, it’s essential to broaden our perspective."
R - Reality Test Your Assumptions
When we invest time in something, we seek out confirming information. Think about being excited about a new restaurant opening. When we are excited and want to try it, we will go online and read the 4 and 5 star reviews. We won't seek out the negative reviews because we don't want them to ruin our excitement.
When making any decision it is important to seek out opposing information. This is especially crucial in organization and team environments because oftentimes a culture has not been established that lets people freely air their concerns (see: Deep Dive on Five Dysfunctions of A Team). One way of implementing this is to adopt a slightly different strategy when assessing options. Instead of debating which one is better, a more nuanced question to ask is, "What would have to be true for this option to be the right answer?" This enables people to disagree without the negativity of being disagreeable.
Assumptions often happen in the workplace when people bring feedback that goes against what we want. We project negative assumptions on people. We say someone is just trying to show off, or impress their boss. To break this bias, use this strategy: Assume Positive Intent. In other words, imagine that the behavior or words of a colleague are motivated by good intentions even if they initially seem objectionable (see: 3 Things I Learned from Charisma Myth by Olivia Fox). This takes you from being defensive to being able to see things you may not otherwise have considered.
Part of reality testing is constructing small experiments to test one's hypothesis, a process referred to in the book as ooch. It's learning to dip your toe in the pool before jumping in headfirst. Think about how many people become lawyers without ever having spent a day in an actual law office. The key is using ooching as a way of speeding up the collection of trustworthy information. Little experiments that start to point us down a certain path, not a way of slowing down a decision that deserves our full commitment. Ooching is a way of testing instead of predicting.
See Also:
Tony Robbins says he always does the same thing after making a big decision - "Whenever I come up with a decision or goal — whenever I make a decision that matters — I immediately take some kind of action that commits me to follow through.".... So even if you're not 100% ready or informed, you build a prototype and test it out. If something goes wrong, you learn from your mistakes and build another. As Robbins explained, "You can always change your approach, but if you do nothing [and] you're waiting, you learn nothing."
Why You Should Not Go To Law School (Tucker Max, Huffington Post) - "There is NO lawyer/law procedural that even remotely shows what it’s like to be a lawyer. You know why? Because being a lawyer is not only soul-crushing, it’s REALLY BORING, and that doesn’t make for good TV. If you want to know what it’s like to be a lawyer, go work in a law office for a summer. Or shadow a lawyer for a day or two. There’s nothing like a day with a lawyer to disabuse you of the notion that anything in the legal profession is like TV."
A - Attain Distance Before Deciding
The book references a classic web series on Edmunds.com called Confessions of a Car Salesman. In talking about the car buying experience, the author noted the large role emotion played. People would be fearful of coming to a dealership because they were afraid they'd buy a car. So sales people did various things like trying to get them to feel good about the car by taking a test drive, or creating a false sense of urgency while running back and forth to the finance manager.
Counteracting this emotion means getting distance from that environment. One strategy for this comes from Suzy Welch and is called the 10/10/10 Framework. How will you feel about a decision 10 minutes from now? 10 months from now? 10 years from now?
Assessing a decision in those terms helps level the emotional playing field. Our present emotions are always sharp and have the spotlight on them. By focusing on the future, which is a bit fuzzier, we shift the spotlight to something we aren't considering. The idea here is not to ignore your emotions, but to put them in perspective. Think about having a difficult conversation with a coworker. In 10 minutes you will probably have anxiety. But after 10 months, there will be a huge sense of relief. The 10/10/10 tool doesn't mean that the long term analysis is always right. It is there to make sure short-term emotion isn't the only thing with the spotlight on it.
When asked for advice, we are quick to tell others to ignore short term emotion. This is another strategy recommended in the book - pretend you are giving a close friend advice. When it comes to assessing our own situation, we often see lots of nuance and complexity. When pretending the situation applies to someone else, it is much easier to simplify issues down to exactly what needs to be done.
See Also:
To Navigate a Challenge, Pretend You’re Giving Advice to a Friend - "When she’s in these situations, Rusch creates space between her thoughts and feelings by pretending she’s giving advice to a friend. “Pretending I’m thinking about a friend rather than myself,” she told me, “almost always provides more clarity and insight about what to do in a tricky spot.” When she assesses a challenge from the outside looking in, everything changes. She goes from ruminating to problem-solving, from being overly self-critical and negative to being encouraging and cautiously optimistic. In the case of the Italian Alps bike race, she told her “friend” to stop pushing and seek immediate shelter so she could sleep, eat, and continue in daylight. That’s exactly what Rusch did, and she ended up finishing the race in a way that exceeded her wildest expectations."
The Long-Term Effects of Short Term Emotion (Dan Ariely, HBR) - "When we confront a situation, our mind looks for a precedent among past actions without regard to whether a decision was made in emotional or unemotional circumstances. Which means we end up repeating our mistakes, even after we’ve cooled off."
P - Prepare to Be Wrong
You can do everything right, but... stuff happens. How do you prepare for it?
One strategy is a premortem. This is imagining the future death of a project and asking what went wrong. This is more that a sophisticated way of imagining a worst-case scenario. It forces analysis about what would have to happen to achieve that outcome. This helps to correct for overconfidence in the decision making process.
Zappos is famously known for giving new hires a special offer. If they ever decided the company was not a good fit, they could take $1,000 to quit. This is setting a trip-wire. It keeps people from going through the motions daily on auto-pilot. Instead it crystallizes a moment of decision - is this the right place for me or not?
The Heath brothers mention that Kodak produced an internal report in 1981 that said digital technology would not be a threat. They said that electronic images would not be an acceptable replacement for print images. They concluded that consumer desire to handle, display, and distribute prints could not be replaced by electronic devices. And lastly, they said that electronic devices would never be low enough in price to have mass appeal.
It's easy to see how things turned out. At the time though, this all made sense. They had an abundance of information, experience, and history to believe these findings would absolutely hold up. A simple trip wire, though, could have alerted them when things were going wrong. An example trip wire the Heath brothers mention would have been to take action when more than 10% of the public expresses satisfaction with digital images. Or to take action when some type of electronic viewing device is acquired by more than 5% of the public.
Day to day changes can be imperceptible. A tripwire sounds the alarm and tells you that you've crossed the threshold of acceptability and something needs to change. The trip wire lets you commit to a course of action, but gives you a safeguard against overconfidence.
Perhaps the most famous example of a trip wire is the rider for Van Halen in which they requested a bowl of M&M's in their dressing room - with the brown M&M's removed. This sounds like a typical diva move by a rock band, but there was a method to the madness.
See Also:
The Truth About Van Halen and the Brown M&M's (NPR) - "The story's been told before (and you can see an actual copy of the rider here), but the release of a new Van Halen album with David Lee Roth behind the microphone seems to have been enough reason to get Diamond Dave to go in front of a camera for an official history of the outrageous demand. Though as he explains it, the clause was less an example of "simple rock star misdemeanor excess" than an ingenious, curiously skewed (and sadly still relevant) safety measure. I won't spoil the band's reason — just watch. Even if it's familiar to you, it's definitely worth hearing again, if only to spend five-and-a-half minutes with Roth at his most impish and charming."
To Reach Your Goals, Imagine You Already Tried and Failed - "A premortem, which is beneficial for just about every endeavor, from running a marathon to starting a business, simply asks you to envision that you failed and to ask yourself: What went wrong? Or, in the words of Kahneman, “Imagine that you are [X amount of time] into the future. You implemented your plan as it now exists. The outcome was a disaster. Take five to ten minutes to write a brief history of that disaster.” Going through this exercise not only helps to ensure that your optimism is at least somewhat grounded in reality, but it also helps you to uncover potential pitfalls on the path to your goal that might otherwise be overlooked. This way, you can prepare for them in advance."
Performing a Project Premortem (Gary Klein, HBR) - "Indeed, the premortem doesn’t just help teams to identify potential problems early on. It also reduces the kind of damn-the-torpedoes attitude often assumed by people who are overinvested in a project. Moreover, in describing weaknesses that no one else has mentioned, team members feel valued for their intelligence and experience, and others learn from them. The exercise also sensitizes the team to pick up early signs of trouble once the project gets under way. In the end, a premortem may be the best way to circumvent any need for a painful postmortem."