Leadership and ManagementDecision Making

1. Narrow Framing

• Point: Narrow framing limits decisions to an either/or scenario, reducing the scope of potential solutions.

  • Example: The book discusses a high school student who is deciding between two universities, failing to consider other potential institutions or alternative paths like a gap year.

• Action: Always generate at least two more options for any major decision. For instance, if contemplating a job change, consider starting your own business or pursuing further education as additional options.

• Confirmation Bias

• Point: Confirmation bias leads individuals to seek out information that supports their existing beliefs and ignore evidence to the contrary.

  • Example: A manager is considering a candidate for a position and finds herself focusing only on the candidate’s strengths while overlooking significant weaknesses highlighted by other team members.

• Action: Conduct a premortem session where you imagine a decision failed and list all reasons that could have led to failure. This creates a space to bring out objections and improve planning.

• Short-term Emotion

• Point: Short-term emotions can unduly influence decisions, leading to choices that may not align with long-term goals.

  • Example: Thinking about buying a car, one might get swayed by the excitement of a sleek design and immediate gratification, neglecting long-term financial implications.

• Action: Implement the 10/10/10 rule. Consider how you will feel about the decision in 10 minutes, 10 months, and 10 years. This method helps to balance short-term desires against long-term wellness.

• Overconfidence

• Point: Overconfidence often leads people to underestimate risks and overestimate their knowledge about future outcomes.

  • Example: An entrepreneur might assume their business model is flawless and fail to prepare for potential market downturns, leading to severe financial strain.

• Action: Use “probabilistic thinking” by evaluating and assigning probabilities to different outcomes. Asking, “What’s the percentage chance this will happen?” can provide a clearer picture of reality.

1. Widening Your Options

2. Multi-Tracking: The Heaths recommend parallel processing multiple alternatives rather than focusing on a single linear path. This approach increases the spectrum of available choices and encourages more adaptive decision-making.

   • Example: Proctor & Gamble introduced a dual detergent project team process, developing two internal teams to compete on designing the best product, which ultimately led to higher quality outcomes.

3. Action: When facing major decisions, list all possible alternatives. Have brainstorming sessions with diverse teams to uncover overlooked options.

4. Reality-Testing Assumptions

5. The “Vanishing Options” Test: This strategy involves imagining that your existing choices are no longer available, forcing you to consider new alternatives that you might otherwise miss.

   • Example: A company innovator imagines that their current production method is banned and explores what new technologies could be adopted to fill the gap.

6. Action: Regularly review and challenge the fundamental assumptions in your business strategy. Facilitate open discussions where team members present contrarian viewpoints.

7. Attaining Distance

8. Personal Advice: Pretend you are giving advice to a friend facing your exact decision. This perspective helps remove your immediate emotional bias and often leads to more rational outcomes.

   • Example: When debating whether to relocate for a job, you may realize that your advice to a friend would be to consider personal well-being aspects like family and community ties which you were initially disregarded in your decision.

9. Action: Write down your decision and pretend you are advising a friend about it. Reflect on any discrepancies between your advice and your current decision.

10. Preparing to be Wrong

11. Tripwire: Design mechanisms that alert you when it’s time to reevaluate your decision. This could be a financial threshold, a timeline, or a specific event.

    • Example: An author may decide to continue working on a manuscript for six more months but set a tripwire to reassess the project if a critical objective, like getting a positive review, is not met within that time.

12. Action: Establish concrete benchmarks and review points for long-term projects to reassess goals and adapt strategies as necessary.

• Spotting Bright Spots: Focus on what works and replicate it rather than obsessing over problems. This method redirects energy towards constructive adaptation.

• Example: In the realm of education, the book cites a case where focusing on successful teachers’ strategies improved overall teaching quality rather than concentrating solely on underperforming ones.

• Ooching: Instead of plunging into a decision, take a small step to test it. This can provide valuable insights and reduce risk.

• Example: Before investing heavily in a new product, a company might release a limited prototype to gather consumer feedback and refine based on real-world responses.

• Considering Opportunity Cost: Remind yourself that choosing one option often means forgoing others. Explicitly acknowledging what you must give up can clarify the true cost of decisions.

• Example: When deciding to fund a new project, leaders must consider the impact on existing projects and determine if reallocating resources aligns with strategic priorities.

Leadership and ManagementDecision Making