# How To Make Decisions Work

Sep 24, 2019 · 6 min read

Everyone unconsciously has rules and methods to make decisions. This post aims to show rules and methods on decision making that would yield better results.

The classical virtues are all decision-making heuristics to make one optimize for the long term rather than for the short term.

- Naval Ravikant

We will be showing which heuristic to use in a certain context. If the heuristic is applied in the wrong context, it would be natural to expect unwanted outcomes.

Context:
Not making decisions is worse than a bad decision

Heuristics:
Put an artificial deadline to make decisions

When making tough decisions people are inclined to avoid or procrastinate rather than coming to a conclusion. Putting an artificial deadline forces you to finalize your thoughts.

Whenever there is a TODO, put an artificial deadline for its decision. If you can’t make the decision now, the decision should be to decide on a date when you will finalize it.

One example would be, at 6 PM on a Monday, I’ll make the decision. At 5:55 PM usually, I don’t know the answer but in those 5 minutes something clicks. Then by 6 PM the answer is always there.

Occam’s Razor²

Context:
Fast Decision Making

Heuristics:
Among competing hypotheses, the one with the fewest assumptions should be selected.

Occam’s razor² states that the simplest solution is correct. In other words, we should avoid looking for excessively complex solutions to a problem and focus on what works, given the circumstances. Occam’s razor is used in a wide range of situations such as a means of making rapid decisions and establishing truths without empirical evidence. It works best as a mental model for making initial conclusions before adequate information can be obtained.

Create an Excel Sheet

Context:
Discovering and prioritizing options. NOT FOR DECISION MAKING

Heuristics:
Write down every piece of information you can find and give points logarithmically based on the importance of each information.

This would allow you (1) to see information which the intuitive mind is biased towards and (2) prioritize between multiple options.

OkCupid made a business out of matchmaking using this type of heuristic. An OkCupid user selects each question with 3 multipliers:

- “A little” 1 point
- “Somewhat” 10 points
- “Very” 50 points

Whatever the decision is, OKC multiplies the decision logarithmically according to these values allowing the user to prioritize possible matches.

This method is frequently used incorrectly. First, you almost never have all of the information to make a decision based on this. Secondly, you do not know the correct weights for each option. The result is usually semi-correct. Most people who use this method prove that their decision was the correct one and shove it to their co-workers face. Don’t be that person.

Use this tool to discover new options or prioritize their search space. If the decision has an emotional component do not use this method.

Luck Surface Area³

Context:
Non-important decisions*

Heuristics:
Select the option with the most luck.

Watch Netflix or go to an event/meetup. Pick the latter one. You most probably will underestimate the luck of an option unless you have tried it. You can go to a volleyball event and meet someone who knows someone which can help with the exact problem you are looking for.

*This heuristic can be easily overwritten by other heuristics. For non-important decisions, I use this heuristic with confidence. However, most likely another heuristic will overwrite Luck Surface Area.

Gut Feeling

Context:
Long-lived emotional decisions

Heuristics:
When faced with a difficult choice, if you cannot decide, the answer is no

Humans are emotional creatures. Sometimes, your gut feeling can allow you to make a better decision than reason.

Some decisions can be really long-lived. It’s really important to only say yes when you’re pretty certain. You’re never gonna be absolutely certain, but you can be very positive⁴.

Moving to a new city or committing to a partner are examples of this kind of decisions.

Hard choices, easy life. Easy choices, hard life

Context:
If you have 2 choices to make and they have equal weight (50–50),

Heuristics:
Take the path that is more difficult and more painful in the short term.

One of these paths require short term pain and the other one may require pain further out in the future. What the brain is doing through conflict avoidance is trying to push out the short term pain. By definition, if the two are even and one has short term pain, it means it has long term gain. On the other hand, by the law of compound interest, the long term gain is where you want to go to anyway. Your brain is over-valuing the side that has short term happiness and trying to avoid short term pain. Most of the gains in life come suffering in the short term, so you can get the gain in the long term. (E.g. working out, confused while reading a book)⁴.

Peace of Mind

Context:
Interpersonal Conflict

Heuristics:
Make the choice that will leave you more equanimous (calmer and peaceful) in the long term.

“Should I say yes to their invitation?” or “Should I respond to their message?”. These decisions usually don’t have a great impact on one’s life. Make the choice that will leave you more equanimous (calmer and peaceful) in the long term.

Peace of mind is the precursor to happiness. Happiness cannot be chased directly. If you’re doing it directly, what you’re actually chasing is pleasure, and pleasure comes with a withdrawal symptom. Pleasure is a Ferris wheel, you get on it, ride it up and eventually, you ride it back down. If you actually want to be happy and be content, that comes from peace⁴.

Theory of Constraints

Context:
1) Finding a hidden conflict
2) The outcome should effect in the long term (minimum 6 months)

Heuristics:
Use Theory of Constraints

Heuristics mentioned previously might be used to fix the conflict. The goal of this heuristic is finding the hidden conflict. This can be applied in various conflicts like continuing relationship problems or business problems. First, write a Current Reality Tree then a Future Reality Tree. Try to solve the conflicts between both trees until everything unties.

Reading this you most probably did not understand anything which is fine. Applying this method takes ~10 hours as a team. I’d recommend only using this method in big decisions where there is a conflict that you can not figure out.

To learn this method it’s best to read The Goal and It’s Not Luck by Eliyahu M. Goldratt. Shorter sources The Theory of Constraints (TOC) Thinking Process and Steps By Step Building Trees

Decision Timeout

Context:
All decisions

Heuristics:
Don’t let time decide

Not taking a decision would lead to a no feedback environment. Whatever decision there is, do not let time conclude it for you. Always decide on something even if it might be the non-optimal resolution.

Heuristics by definition are tactics which lead to practical methods; not guaranteed to be optimal, perfect, or rational, but instead sufficient for reaching an immediate goal.

Cognitive biases frequently play a role in our decision-making process. Be aware of your biases and make use of the heuristics in the least bad way.

Finally our last heuristic

Skin in the Game

Context:
All decisions

Heuristics:
Never take advice from someone who doesn’t have to live with the consequences.
— Mark Cuban

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