DECISIVE: HOW TO MAKE BETTER CHOICES IN LIFE AND WORK by Chip Heath, Dan Heath

• “The normal state of your mind is that you have intuitive feelings and opinions about almost everything that comes your way.
• What’s in the spotlight will rarely be everything we need to make a good decision, but we won’t always remember to shift the light. Sometimes, in fact, we’ll forget there’s a spotlight at all, dwelling so long in the tiny circle of light that we forget there’s a broader landscape beyond it.
• When it comes to making decisions, it’s clear that our brains are flawed instruments.
• Sometimes we are given the advice to trust our guts when we make important decisions. Unfortunately, our guts are full of questionable advice.
• Building a good decision-making process is largely ensuring that these flaws don’t happen.
• The discipline exhibited by good corporate decision makers—exploring alternative points of view, recognizing uncertainty, searching for evidence that contradicts their beliefs—can help us in our families and friendships as well. A solid process isn’t just good for business; it’s good for our lives.
• The only decision-making process in wide circulation is the pros-and-cons list.
• Cole is fighting the first villain of decision making, narrow framing, which is the tendency to define our choices too narrowly, to see them in binary terms.
• Our normal habit in life is to develop a quick belief about a situation and then seek out information that bolsters our belief. And that problematic habit, called the “confirmation bias,” is the second villain of decision making.
• The tricky thing about the confirmation bias is that it can look very scientific. After all, we’re collecting data.
• At work and in life, we often pretend that we want truth when we’re really seeking reassurance:
• If you review the research literature on decisions, you’ll find that many decision-making models are basically glorified spreadsheets.
• This brings us to the third villain of decision making: short-term emotion. When we’ve got a difficult decision to make, our feelings churn.
• the fourth villain of decision making is overconfidence. People think they know more than they do about how the future will unfold.
• We have too much confidence in our own predictions.
• The future has an uncanny ability to surprise.
• You encounter a choice. But narrow framing makes you miss options.
• You analyze your options. But the confirmation 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 often be overconfident about how the future will unfold.
• You encounter a choice. But narrow framing makes you miss options. So...Widen Your Options.
• You analyze your options. But the confirmation bias leads you to gather self-serving info. So...Reality-Test Your Assumptions.
• You make a choice. But short-term emotion will often tempt you to make the wrong one. So...Attain Distance Before Deciding.
• Then you live with it. But you’ll often be overconfident about how the future will unfold. So...Prepare to Be Wrong.
• To train intuition requires a predictable environment where you get lots of repetition and quick feedback on your choices.
• Sometimes the hardest part of making a good decision is knowing there’s one to be made.
• In life, we spend most of our days on autopilot, going through our usual routines. We may make only a handful of conscious, considered choices every day. But while these decisions don’t occupy much of our time, they have a disproportionate influence on our lives.
• To make better decisions, use the WRAP process:
• Widen Your Options.
• Reality-Test Your Assumptions.
• Attain Distance Before Deciding.
• Prepare to Be Wrong.
• Organizations, like teenagers, are blind to their choices.
• Parents are often shocked, too, to hear that, once you control for aptitude, a person’s lifetime earnings don’t vary based on what college they attended.
• “Opportunity cost” is a term from economics that refers to what we give up when we make a decision.
• Below, we give you a generic form of the Vanishing Options Test, which you can adapt to your situation: You cannot choose any of the current options you’re considering. What else could you do?
• When people imagine that they cannot have an option, they are forced to move their mental spotlight elsewhere—really move it—often for the first time in a long while.
• Until we are forced to dig up a new option, we’re likely to stay fixated on the ones we already have.
• Often our options are far more plentiful than we think.
• This is a critical point: Multitracking keeps egos in check.
• Many executives are worried that exploring multiple options will take too long. It’s a reasonable fear, but the researcher Kathleen Eisenhardt has found that the opposite is true. In a study of top leadership teams in Silicon Valley, an environment that tends to place a premium on speed, she found that executives who weigh more options actually make faster decisions.
• With some decisions, finding more options is easy—you can just expand your search.
• One rule of thumb is to keep searching for options until you fall in love at least twice.
• Not all choices are created equal.
• To get the benefits of multitracking, we need to produce options that are meaningfully distinct.
• Managers need to push for legitimate alternatives, not sham options.
• To diagnose whether your colleagues have created real or sham options, poll them for their preferences. If there’s disagreement, that’s a great sign that you have real options. An easy consensus may be a red flag.
• How you react to the position, in short, depends a great deal on your mindset at the time it’s offered.
• Psychologists have identified two contrasting mindsets that affect our motivation and our receptiveness to new opportunities: a “prevention focus,” which orients us toward avoiding negative outcomes, and a “promotion focus,” which orients us toward pursuing positive outcomes.
• This blending of mindsets is as vital for our personal decisions as it is for organizational decisions, but we don’t always manage to do it on our own.
• When life offers us a “this or that” choice, we should have the gall to ask whether the right answer might be “both.”
• Multi-tracking improves our understanding of the situations we’re facing. It lets us cobble together the best features of our options. It helps us keep our egos in check.
• Multitracking = considering more than one option simultaneously.
• Push for “this AND that” rather than “this OR that.”
• Throughout Walton’s career, he kept his eyes out for good ideas. He once said that “most everything I’ve done I’ve copied from someone else.”
• Again and again in his career, Walton found clever solutions by asking himself, “Who else is struggling with a similar problem, and what can I learn from them?”
• To break out of a narrow frame, we need options, and one of the most basic ways to generate new options is to find someone else who’s solved your problem.
• Good ideas are often adopted quickly.
• practices that work for one organization may be incompatible with another,
• If you take the time to study and understand your bright spots—how exactly did you manage to get yourself to the gym on those four days?—then you can often discover unexpected solutions.
• The wonderful thing about bright spots is that they can’t suffer from the rejected-transplant problem, because they’re native to your situation. It’s your own success you’re seeking to reproduce.
• A checklist is useful for situations where you need to replicate the same behaviors every time. It’s prescriptive; it stops people from making an error. On the other hand, a playlist is useful for situations where you need a stimulus, a way of producing new ideas. It’s generative; it stops people from overlooking an option. (Don’t forget to shine your spotlight over here …)
• one of the reliable but unrecognized pillars of scientific thinking is the analogy.
• When you use analogies—when you find someone who has solved your problem—you can take your pick from the world’s buffet of solutions. But when you don’t bother to look, you’ve got to cook up the answer yourself. Every time. That may be possible, but it’s not wise, and it certainly ain’t speedy.
• When you need more options but feel stuck, look for someone who’s solved your problem.
• Look outside: competitive analysis, benchmarking, best practices.
• Look inside. Find your bright spots.
• Note: To be proactive, encode your greatest hits in a decision “playlist.”
• A checklist stops people from making an error; a playlist stimulates new ideas.
• A third place to look for ideas: in the distance. Ladder up via analogies.
• Ladder up: Lower rungs show close analogies (low risk and low novelty), while higher rungs reveal more distant solutions (higher risk and higher novelty).
• Why generate your own ideas when you can sample the world’s buffet of options?
• It is an unwritten law of the stock market that corporations must keep growing, year after year, and for the executives of a company straining to meet these growth expectations, buying another company can look like an awfully attractive shortcut. But it’s an expensive shortcut.
• Hubris is exaggerated pride or self-confidence that often results in a comeuppance.
• The confirmation bias leads us to hunt for information that flatters our existing beliefs.
• In our individual decisions, how many of us have ever consciously sought out people we knew would disagree with us? Certainly not every decision needs a devil’s advocate—“I strenuously object to your purchasing those slacks!”—but for high-stakes decisions, we owe ourselves a dose of skepticism.
• The most important lesson to learn about devil’s advocacy isn’t the need for a formal contrarian position; it’s the need to interpret criticism as a noble function.
• Sometimes we think we’re gathering information when we’re actually fishing for support.
• This practice of asking probing questions is useful when you are trying to pry information from people who have an incentive to spin you:
• When we want something to be true, we gather information that supports our desire.
• Confirmation bias = hunting for information that confirms our initial assumptions (which are often self-serving).
• We need to spark constructive disagreement within our organizations.
• To gather more trustworthy information, we can ask disconfirming questions.
• Caution: Probing questions can backfire in situations with a power dynamic.
• Extreme disconfirmation: Can we force ourselves to consider the opposite of our instincts?
• We can even test our assumptions with a deliberate mistake.
• Because we naturally seek self-confirming information, we need discipline to consider the opposite.
• A tripwire specifies the circumstances when the team would reconsider a decision. So if you’re skeptical of a decision but lack the power to change it, encourage your colleagues to set a tripwire.
• The inside view draws from information that is in our spotlight as we consider a decision—our own impressions and assessments of the situation we’re in. The outside view, by contrast, ignores the particulars and instead analyzes the larger class it’s part of.
• The outside view is more accurate—it’s a summary of real-world experiences, rather than a single person’s impressions—yet we’ll be drawn to the inside view.
• The outside view ignores everything that is special about our situation. All entrepreneurs have reason to believe, at the beginning, that they will succeed.
• Sometimes people can have access to the perfect set of data—and still manage to ignore it.
• Perhaps the simplest and most intuitive advice we can offer in this chapter is that when you’re trying to gather good information and reality-test your ideas, go talk to an expert.
• An expert doesn’t have to be a heavily credentialed authority, though. The bar is actually far lower than that: An expert is simply someone who has more experience than you.
• experts are pretty bad at predictions. But they are great at assessing base rates.
• The point is that the predictions of even a world-class expert need to be discounted in a way that their knowledge of base rates does not. In short, when you need trustworthy information, go find an expert—someone more experienced than you. Just keep them talking about the past and the present, not the future.
• What we’ve seen so far is a very simple rule for analyzing your options: Take the outside view. You should distrust the inside view—those glossy pictures in your head—and instead get out of your head and consult the base rates.
• When we assess our choices, we’ll take the inside view by default. We’ll consider the information in the spotlight and use it to form quick impressions.
• Zooming out and zooming in gives us a more realistic perspective on our choices.
• Often we trust “the averages” over our instincts—but not as much as we should.
• The inside view = our evaluation of our specific situation. The outside view = how things generally unfold in situations like ours. The outside view is more accurate, but most people gravitate toward the inside view.
• If you can’t find the “base rates” for your decision, ask an expert.
• Warning: Experts are good at estimating base rates but lousy at making predictions.
• A “close-up” can add texture that’s missing from the outside view.
• To gather the best information, we should zoom out and zoom in. (Outside view + close-up.)
• Whenever possible, we should get out of the business of prediction altogether.
• By making decisions through experimentation, the best idea can prove itself.
• Ooching is best for situations where we genuinely need more information. It’s not intended to enable emotional tiptoeing, in which we ease timidly into decisions that we know are right but might cause us a little pain.
• Ooching, in short, should be used as a way to speed up the collection of trustworthy information, not as a way to slow down a decision that deserves our full commitment.
• Research has found that interviews are less predictive of job performance than work samples, job-knowledge tests, and peer ratings of past job performance. Even a simple intelligence test is substantially more predictive than an interview.
• With so little proof that interviews work, why do we rely on them so much? Because we all think we’re good at interviewing.
• The basic problem we face, in analyzing our options, is this: We will usually have an inkling of the one that we want to be the winner, and even the faintest inkling will propel us to gather supportive information—and sometimes nothing but supportive information.
• To avoid that trap, we’ve got to Reality-Test Our Assumptions. We’ve seen three strategies for doing that. First, we’ve got to be diligent about the way we collect information, asking disconfirming questions and considering the opposite. Second, we’ve got to go looking for the right kinds of information: zooming out to find base rates, which summarize the experiences of others, and zooming in to get a more nuanced impression of reality. And finally, the ultimate reality-testing is to ooch: to take our options for a spin before we commit.
• Ooching = running small experiments to test our theories. Rather than jumping in headfirst, we dip a toe in.
• Ooching is particularly useful because we’re terrible at predicting the future.
• Entrepreneurs ooch naturally. Rather than create business forecasts, they go out and try things.
• Intuit’s Scott Cook believes in “leadership by experiment,” not by “politics, persuasion, and PowerPoint.”
• Caveat: Ooching is counterproductive for situations that require commitment.
• Common hiring error: We try to predict success via interviews. We should ooch instead.
• Studies show that interviews are less diagnostic than work samples, peer ratings, etc. Can you nix the interview and offer a short-term consulting contract?
• Why would we ever predict when we can know?
• Often in the course of exploring our options, we find that one of them is so obviously right that we don’t deliberate much about it.
• Also, you can usually break the logjam on a tough decision by unearthing some new options or some new information.
• Find someone who has solved your problem.
• To use 10/10/10, we think about our decisions on three different time frames: How will we feel about it 10 minutes from now? How about 10 months from now? How about 10 years from now?
• A preference for familiar things is necessarily a preference for the status quo.
• Compounding this preference for the status quo is another bias called loss aversion, which says that we find losses more painful than gains are pleasant.
• Research suggests that we set ourselves up for loss aversion almost instantly.
• The advice we give others, then, has two big advantages: It naturally prioritizes the most important factors in the decision, and it downplays short-term emotions. That’s why, in helping us to break a decision logjam, the single most effective question may be: What would I tell my best friend to do in this situation?
• Fleeting emotions tempt us to make decisions that are bad in the long term.
• To overcome distracting short-term emotions, we need to attain some distance.
• 10/10/10 provides distance by forcing us to consider future emotions as much as present ones.
• Our decisions are often altered by two subtle short-term emotions: (1) mere exposure: we like what’s familiar to us; and (2) loss aversion: losses are more painful than gains are pleasant.
• Loss aversion + mere exposure = status-quo bias.
• We can attain distance by looking at our situation from an observer’s perspective.
• Perhaps the most powerful question for resolving personal decisions is “What would I tell my best friend to do in this situation?”
• That’s why it’s so important to enshrine core priorities, not just cheerlead for generic values.
• This is one of the classic tensions of management: You want to encourage people to use their judgment, but you also need your team members’ judgments to be correct and consistent.
• Maybe this advice sounds too commonsensical: Define and enshrine your core priorities.
• People rarely establish their priorities until they’re forced to.
• establishing priorities is not the same thing as binding yourself to them.
• Our calendars are the ultimate scoreboard for our priorities.
• It’s tempting but naive to pretend that we can make time for everything by multitasking or by working more efficiently. But face it, there’s not that much slack in your schedule. An hour spent on one thing is an hour not spent on another.
• Set a timer that goes off once every hour, and when it beeps, we should ask ourselves, “Am I doing what I most need to be doing right now?”
• We can’t control the future, but with some forethought, we can shape it.
• Quieting short-term emotion won’t always make a decision easy.
• Agonizing decisions are often a sign of a conflict among your core priorities.
• The goal is not to eliminate emotion. It’s to honor the emotions that count.
• By identifying and enshrining your core priorities, you make it easier to resolve present and future dilemmas.
• Establishing your core priorities is, unfortunately, not the same as binding yourself to them.
• To carve out space to pursue our core priorities, we must go on the offense against lesser priorities.
• When we think about the extremes, we stretch our sense of what’s possible, and that expanded range better reflects reality.
• Even if we have a pretty good guess about the future, the research on overconfidence suggests that we’ll be wrong more often than we think.
• A postmortem analysis begins after a death and asks, “What caused it?” A premortem, by contrast, imagines the future “death” of a project and asks, “What killed it?”
• The premortem is, in essence, a way of charting out the lower bookend of future possibilities and plotting ways to avoid ending up there.
• The effort it takes to explore the full spectrum of possibilities and to prepare for the worst possible scenarios acts powerfully to counteract overconfidence.
• Our judgment can be wrong in multiple ways. We might err by failing to consider the problems we could encounter, and that’s why we need premortems. However, we might also err by failing to prepare for unexpectedly good outcomes. When we bookend the future, it’s important to consider the upside as well as the downside.
• A preparade asks us to consider success.
• Just assume that you’re being overconfident and give yourself a healthy margin of error.
• The future is not a “point”—a single scenario that we must predict. It is a range. We should bookend the future, considering a range of outcomes from very bad to very good.
• To prepare for the lower bookend, we need a premortem. “It’s a year from now. Our decision has failed utterly. Why?”
• To be ready for the upper bookend, we need a preparade. “It’s a year from now. We’re heroes. Will we be ready for success?”
• To prepare for what can’t be foreseen, we can use a “safety factor.”
• Anticipating problems helps us cope with them.
• By bookending—anticipating and preparing for both adversity and success—we stack the deck in favor of our decisions.
• When we act on autopilot, our behavior goes unexamined.
• Because day-to-day change is gradual, even imperceptible, it’s hard to know when to jump. Tripwires tell you when to jump.
• With the right tripwire, we can ensure that we don’t throw good money (or time) after bad.
• Tripwires encourage risk taking by letting us carve out a “safe space” for experimentation.
• In short, tripwires allow us the certainty of committing to a course of action, even a risky one, while minimizing the costs of overconfidence.
• Organizational leaders need people to be sensitive to changes in the environment and to be brave enough to speak up.
• In life, we naturally slip into autopilot, leaving past decisions unquestioned.
• A tripwire can snap us awake and make us realize we have a choice.
• Tripwires can be especially useful when change is gradual.
• For people stuck on autopilot, consider deadlines or partitions.
• We tend to escalate our investment in poor decisions; partitions can help rein that in.
• Tripwires can actually create a safe space for risk taking. They: (1) cap risk; and (2) quiet your mind until the trigger is hit.
• Many powerful tripwires are triggered by patterns rather than dates/metrics/budgets.
• Tripwires can provide a precious realization: We have a choice to make.
• The WRAP process, if used routinely, will contribute to that sense of fairness, because it allows people to understand how the decision is being made, and it gives them comfort that decisions will be made in a consistent manner.
• The most direct (and difficult) way to make a fair decision is to involve as many people as possible and get them all to agree.
• The business world thrives on quick decisions, and you can’t build consensus quickly.
• Some decisions will leave a subset of people worse off, as the necessary cost of doing something great for many others or for the organization itself.
• Researchers call this sense of fairness “procedural justice”—i.e., the procedures used to make a decision were just—as distinct from “distributive justice,” which is concerned with whether the spoils of a decision were divvied up fairly. An extensive body of research confirms that procedural justice is critical in explaining how people feel about a decision. It’s not just the outcome that matters; it’s the process.
• The elements of procedural justice are straightforward: Give people a chance to be heard, to present their case. Listen—really listen—to what people say. Use accurate information to make the decision, and give people a chance to challenge the information if it’s incorrect. Apply principles consistently across situations. Avoid bias and self-interest. Explain why the decision was made and be candid about relevant risks or concerns.
• A manager’s self-criticism is comforting, rather than anxiety producing, because it signals that she is making a reality-based decision.
• The procedural-justice research shows that people care deeply about process. We all want to believe that a decision process that affects us is fair, that it is taking into account all the right information. Even if the outcome goes against us, our confidence in the process is critical.
• We can’t know when we make a choice whether it will be successful. Success emerges from the quality of the decisions we make and the quantity of luck we receive. We can’t control luck. But we can control the way we make choices.
• A process, far from being a drag or a constraint, can actually give you the comfort to be bolder.
• Being decisive is itself a choice. Decisiveness is a way of behaving, not an inherited trait. It allows us to make brave and confident choices, not because we know we’ll be right but because it’s better to try and fail than to delay and regret.
• Our decisions will never be perfect, but they can be better. Bolder. Wiser. The right process can steer us toward the right choice.
• Decisions made by groups have an additional burden: They must be seen as fair.
• “Bargaining”—horse-trading until all sides can live with the choice—makes for good decisions that will be seen as fair.
• Procedural justice is critical in determining how people feel about a decision.
• We should make sure people are able to perceive that the process is just.
• A trustworthy process can help us navigate even the thorniest decisions.
• “Process” isn’t glamorous. But the confidence it can provide is precious. Trusting a process can permit us to take bigger risks, to make bolder choices. Studies of the elderly show that people regret not what they did but what they didn’t do.
• Here’s an Express Version of the WRAP process. (1) Widen: Add one more option to your consideration set. (If you can’t think of one easily, look for someone who’s solved your problem, via your network of contacts or a simple Internet search.) (2) Reality-Test: Call one expert who can educate you about the “base rates” in your situation (for example, odds of success or typical timelines). (3) Attain Distance: Resolve tough dilemmas by asking which option best fits your core priorities. (4) Prepare: Bookend the future—spend an hour thinking about what could go wrong and what could go right, and then do something to prepare for both contingencies.