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What is your decision making process?

S.Y.

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"the quality of our lives is the sum of our decisions plus luck" - Annie Duke

I have many tools to make decisions. It really depends on the context. There are few I use often.

10-10-10
I ask myself three questions:
- how would I feel in 10 mins for now?
- what about in 10 months?
- what about in 10 years?

Consequential/reversible decision matrix
A modify Eisenhower decision matrix with if a decision is consequential on the x axis and if it is reversible on the y axis. Consequential and irreversible decision warrants further thinking. Reversible ones, less so.

Occam Razor
Simpler explanations are more likely to be true than complex one. And so I err for the most part towards simplicity when debating two decisions.

Inversion
A tricky one, kinda a premortem. If I want to achieve x, say losing 5 pounds. Instead of asking "what should I do to lose 5 pounds?", I would ask what are the things that I can do to gain 5 pounds. And then not do them

Uncle point framework (from Skin in The Game)
So for this one is a way to Hedge your downside risk. Say you are making a business decision with an expected net value of 100000$. If one of the scenario can bankrupt your company, even with a positive NPV, it is a bad bet

Second order thinking
Going beyond the immediate results of the decision. Some decisions have a negative payout in the short term but a large positive payout in the long run. Pair well with the previous framework

Bayes thinking
I am forcing myself to think in probability. Instead of a black or white default way of thinking. Struggling with this one a bit

Voila!
 

Valhalla

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Coming from a pilot background where decision making forms a large portion of the job, I've found I carry over a lot of the tools I used in that job. Tried and true models such as the OODA (Observe, Orient, Decide, Act) Loop work well but definitely can't cover you for everything, and is less useful with longer term business decisions.

So much of building a company product etc is based around decision making and yet I hear very little about how they're made. Ray Dalio writes about an idea meritocracy and weighted believability which I found really interesting.

What do you do to increase your odds of making "good" decisions?
 
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Tossek

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I would add these:

Estimated opportunity costs (for equivalent choices)
Which of the options would give lower opportunity costs?

Back-Up Last choice
Can the decision be reverted into the other option if failing occurs? If yes, take this one. Also, this helps to get experience and maybe advancing the decision matrix and fine tune it later again with other options.
 

Valhalla

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Mar 6, 2019
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"the quality of our lives is the sum of our decisions plus luck" - Annie Duke

I have many tools to make decisions. It really depends on the context. There are few I use often.

10-10-10
I ask myself three questions:
- how would I feel in 10 mins for now?
- what about in 10 months?
- what about in 10 years?

Consequential/reversible decision matrix
A modify Eisenhower decision matrix with if a decision is consequential on the x axis and if it is reversible on the y axis. Consequential and irreversible decision warrants further thinking. Reversible ones, less so.

Occam Razor
Simpler explanations are more likely to be true than complex one. And so I err for the most part towards simplicity when debating two decisions.

Inversion
A tricky one, kinda a premortem. If I want to achieve x, say losing 5 pounds. Instead of asking "what should I do to lose 5 pounds?", I would ask what are the things that I can do to gain 5 pounds. And then not do them

Uncle point framework (from Skin in The Game)
So for this one is a way to Hedge your downside risk. Say you are making a business decision with an expected net value of 100000$. If one of the scenario can bankrupt your company, even with a positive NPV, it is a bad bet

Second order thinking
Going beyond the immediate results of the decision. Some decisions have a negative payout in the short term but a large positive payout in the long run. Pair well with the previous framework

Bayes thinking
I am forcing myself to think in probability. Instead of a black or white default way of thinking. Struggling with this one a bit

Voila!

I always find the occams razor model tricky with multiple options when you then have to make another decision about what is the most simple option.

It's a great thought process you have, very systemized and quantitative. Thanks a ton
 
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