Learning to Make Better Decisions

When it comes to learning, I think that decision making is a really interesting component within that. If learning was simply the act of knowing a bunch of things then why do supposedly intelligent people act very stupidly sometimes? A lack of critical thinking skills may explain this but I do wonder about the impact that poor decision making would have too.

Over the last couple of years, I’ve looked at a number of resources on decision making and have compiled their findings. Decision making is a skill and can be improved. That’s probably the most important thing to consider. From the literature I’ve reviewed, here are my top three conclusions for helping you improve your decision making:

1. Have subject matter expertise — Ok, knowing a whole bunch of facts about something isn’t the only thing to good decision making but it is hard to make an informed decision about something you know little about.

2. Know your (cognitive) biases — Be aware of what biases you (and others) can have. Heck, just be cognizant that we’re all susceptible to bias. There really is no such thing as objectivity, only the perception that we believe we can be objective. And there’s where some of the potential for bias can exist.

3. Have a decision making framework — For example, step one would be to collect the facts. Next you’d brainstorm a series of potential solutions. Then you’d weigh the pro’s and con’s of each against some standard, possibly something to do with your own beliefs and values. Finally, you’d choose one option and act.

Another variation of the decision making framework would be to apply a mental model. Shane Parish of Farnam Street has covered a great deal on decision making and speaks highly of using mental models. Parish learned about mental models from studying Charlie Munger. This was very influential for him and planted the seed for Farnam Street. Now Parish has spent almost the last decade seeking out mental models, trying them and then curating for the rest of us the ones that he feels will help us become better decision makers and better learners.

Mental models, Parish says, are how we understand the world. Complexity abounds. To go through a process like the decision making framework I mentioned above can be tedious. Just the total number of facts that you may end up collecting in step one of the framework may be enough to turn you into the proverbial deer in the headlights. How will you ever decide? This is where mental models can help. Says Parish:

“We cannot keep all of the details of the world in our brains, so we use models to simplify the complex into understandable and organizable chunks.”

He goes on to say:

“The quality of our thinking is proportional to the models in our head and their usefulness in the situation at hand. The more models you have — the bigger your toolbox — the more likely you are to have the right models to see reality.”

While we all have some form of these types of models, they are usually few in number and stick most closely to what we already know. We are, says Parish, specialists but to make better decisions we must branch out and become aware of other models that help us to see the problem we must solve from all possible angles.

Over the years Parish and his colleagues at Farnam Street have collected the mental models that they feel are most useful. The current list stands at 109. A mental model is supposed to be good at cutting through all the potential information before you to help you pinpoint what is most important to pay attention to. It’s like CliffNotes for decision making. However, even these stripped down versions of how the world works could seem daunting to someone making a decision when there are potentially 109 good ones to keep on the tip of our brain.

Parish notes that building up these mental models so they are readily available is a life-long undertaking. But what if I have to make a really critical decision quickly? What if I don’t have time to go through the steps in a decision making framework and/or consider which mental model is best and I don’t yet know all of them off by heart? While what’s been mentioned here may help us to become better decision makers, it requires that we proceed slowly and take our time. Is there anything I can do to make a quality decision quickly and in the heat of the moment?

More on that next time.