The Art of Making DecisionsAUTHOR: Francisco Sáez
In this article I am not going to explain how you should make your decisions (who the hell am I?). Simply, I will present you a set of facts and theories about the decision making process. The idea is that if you know the process by which you make your own decisions, you will be able to make them more effectively. Also, let it be said, knowing how the human’s mind works in this type of processing also gives you the ability to influence others’ decisions (if you work in advertising, marketing or sales, this should be of your interest.)
Making decisions is certainly the most important activity that you are able to do each day. You make some decisions everyday; some do not seem very far-reaching, such as deciding what clothes you are going to wear or what you are going to eat, and others, like deciding what to do and what not to do, will determine your immediate future and pave the way for more important decisions that will set the direction of your life.
Even doing nothing regarding a particular issue is also a decision. If you have seen the movie Sliding Doors, starring Gwyneth Paltrow, you know that even a small decision can change your life (in the film, the protagonist was torn between picking up a doll dropped by a little girl and miss the train, and catching the train without helping the child; each decision generates a very different sequence of events.)
According to Philip Tetlock, professor of psychology at the University of Pennsylvania, there are 3 basic ways to approach decisions:
- In a rational manner. You make a rational analysis in order to obtain the best possible outcome. You give a value to each alternative and finally choose the option with the highest value. It is often used in economic and financial matters and although you may think that is the approach you use most, it is not. Today there is considerable evidence that, as individuals, we do not usually make decisions this way.
- In a psychological manner. More intuitive. Here you use logic and statistics to draw conclusions about the world and the behavior of people. You have developed a set of cognitive mechanisms that allows you to deal with harsh environments, for which you only have a few resources. So you use, often unconsciously, heuristic strategies based on your experience, which greatly reduce the complexity of the decision to more simple rules. For example, associating a brand to quality drives you to choose its products without much thought (“if it is X, it must be good”).
- In a social manner. Unlike the previous approaches, here you do not base your judgment on the limited information you have. You live in a world where society sets your perception of facts (from what clothes are fashionable until the importance of marriage), and this strongly influences your decisions. You are very concerned with how others understand your decisions. At the end of the day, your survival in a society, or any organization, depends on your integration. These decisions may be quite unconscious, since they are practically predetermined by your social environment (laws, rules, imitation of others, etc.)
From any perspective, your decisions are influenced by your perception of risks. But depending on how you define the problem, you will perceive the risks differently. For example, if you define it as an opportunity to gain something, you will be more sensitive to risks and will tend to avoid them, but if you define it as a loss, you will take more risks to avoid it or to compensate loses. The words you use in the definition of the problem introduce a bias that, believe it or not, will make you go more to one solution than another.
How do you make a judgement about the information presented to you? Well, quite contrary to what you may think, in a totally biased manner:
- Obviously, you pay much more attention to the information you have available than the one you don’t know, although the first is 10% of the total.
- Emotions play a very important role. The information you can easily remember is more relevant to you, since it made an impact on you.
- You are very selective when evaluating information. You pay more attention to the information that serves your purposes than the one that distances you from them.
- Also, you pay more attention to the information that confirms your opinions and viewpoints. Unconsciously, you will not seek advice from anyone who think different than you.
- Your rationality is limited: The same data can lead to very different conclusions, depending on the assumptions you have taken as correct.
Today, more than ever, it is essential to know how to filter and sort the information that reaches you. You are oversaturated with information, and unfortunately, much of it is not high quality, nor objective, or proved. But it is so easy to get to it. Also, keep in mind that some of the information you actually need is already filtered and removed externally, before you even start your analysis.
A common problem when you have already made up your mind is not to question it again. Although you receive new data that indicates you made a wrong decision, you will be very reluctant to recant. We tend to avoid what threatens our self-esteem, and we lose great opportunities to learn and correct mistakes. And it ruins careers, companies and entire lives.
All this leads to the conclusion that decision making is not easy. It is an art. If you are aware of how the various internal and external forces affect your decisions, and the constraints faced by your analysis, you will be able to see a little further and get more chance to do it right.
Other fun facts that affect your decisions: 8 Things You Don’t Know Are Affecting Our Choices Every Day: The Science of Decision Making