lesson 34: How to Make Good Decisions

If the pandemic taught us anything, it’s that excellent leadership requires clear thinking and, consequently, good decision-making. When faced with uncertain challenges, inaction is not an option. However, the right kind of action makes all the difference.

In his book, Clear Thinking: Turning Ordinary Moments into Extraordinary Results, Shane Parrish writes that before you can think clearly, you need to deal with the enemies of clear thinking. These include letting our biases and emotions influence your thinking, as well as letting group norms influence us, even when we have our doubts.

I’ve found the most effective way to deal with my enemies of clear thinking is to pause, take a deep breath and ask, what is going on in me that gets in the way. This is where the curiosity muscle that I covered in the last video is so important.

A critical principle in good decision making is to focus on the process, not the outcome. In Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts, Annie Duke compares decision making to the difference between poker and chess.

“Life is more like poker. You could make the smartest, most careful decision…and still have it blow up in your face. You could run a red light and get through the intersection safely – or follow all the traffic rules and signals and end up in an accident. You could teach someone the rules of poker in five minutes, put them at a table with a world champion player, deal a hand (or several), and the novice could beat the champion. That could never happen in chess.”

A good decision can have a bad outcome and vice versa. Focus on your decision-making process, not the outcome.
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There are two things you can do to improve your decision making process.

First, do a pre-mortem. This is when you and your team imagine that a course of action has failed, then work backwards to assess what can potentially lead to failure.

This leads to the second thing you can do, which is eliminate downside risk. By choosing decisions that may not have as big an upside, but minimize the downside risk, you can feel confident that no matter what happens, you can learn something and get better from whatever results.

One thing is clear. As a leader, you can’t afford to do nothing. So, instead, improve your process for doing something.