Despite the fact that we are the most intellectually advanced species on the planet, making decisions does not come easily or naturally. Our caveman forbearers certainly could think and innovate, but their technique and our technique generally is that of trial and error - just give it a try and if it doesn’t work we’ll try something else. Human brains have evolved more to solve problems by experimentation than by logic. We have the cognitive ability to think logically and make decisions, it just doesn’t come naturally.
We are not taught how to make decisions. There are no courses or instruction below the college level that teach the fundamentals of decision making. There are very few undergraduate and graduate level courses and these tend to be focused on business applications. We learn this important life skill solely by observation and trial and error. A high school senior may be skilled in calculus but be unable to effectively decide which college to attend. A college graduate may be unable to clearly analyze the risks and rewards of various career options.
Our brains are physically unable to analyze large quantities of data. Psychologists tell us that we are capable of holding and comparing about seven pieces of data at any one time, yet people often make major decisions involving dozens of factors in their head, without writing anything down or using simple decision making tools.
It’s hard when it’s personal. When we are making a decision that affects us personally it is very hard to remain objective and think clearly through to the best solution. The more important the decision the more likely “outcome apprehension” will inhibit clear thinking and good decision-making.
Types of Decisions
There are 3 basic types of decisions:
- Decisions Whether - These will generally be decisions in which the answer is either Yes or No or Do it or Don't do it. Example: Should I look for another job?
- Decisions Which - These decisions require you to choose from a group of options. Example: Which job offer should I accept?
- Contingent Decisions - These are decisions already made but on hold. Example: I will take the job if they offer me more money.
Decision Making vs. Problem Solving
Decision making and problem solving are similar in that they both seek resolution to an issue. In general, problem solving takes a larger view and usually involves implementing a strategy. That strategy usually includes making one or more decisions. There is an overlap. However, it is generally deemed that decision making is a subset of problem solving.
An Important Distinction: Decisions vs. Outcomes
A good decision does not necessarily result in a good outcome. Conversely, a bad decision does not necessarily result in a bad outcome. A decision and it's outcome are separate. Here are some examples:
Sam Phillips owned a small recording company in Memphis. In 1955 he sold to RCA Records, for the sum of $35,000, the exclusive contract he had with a young man named Elvis Presley, thereby forfeiting royalties on more than a billion records.
In 1938 Joe Shuster and Jerry Siegel sold all rights to the comic-strip character Superman to their publishers for $130, a tidy $65 each.
In 1889 the editor of the San Francisco Examiner published one article by Rudyard Kipling but declined to accept any more. "I'm sorry, Mr. Kipling," he said, "but you just don't know how to use the English language."
In 1898 young Albert Einstein applied for admission to the Munich Technical Institute, but was turned down on the grounds that he "showed no promise" as a student.
Were these bad decisions? While the outcomes appear to us at this later time to be bad, we don't know the circumstances, the thinking and the goals of the decision maker. We can't jump to the conclusion that these were bad decisions based on the apparently bad outcome. These may have been very good decisions to that person at the time.
Now, consider this scenario: In 1981, an investor throws a dart at the stock page he has tacked to his office wall. The dart lands on a new company named "Microsoft". The investor invests $10,000. Thirty years later the stock is worth $20,000,000. Was this a bad decision? Yes, picking a stock by pure chance is not generally considered to be a wise method of selection. Was there a good outcome? Obviously.
What about this situation: The President is facing an grave international situation. He consults with the best experts, brings in the best minds to tackle the problem and, after long and careful consideration, makes a decision. The result is disastrous. Did the President make a bad decision. No. If he did the best he could, employed all resources available and was diligent and earnest in his efforts, he made a good decision. Was the outcome bad. Unfortunately, yes.
The important point to understand is that a decision and it's outcome are separate and distinct. Your goal should be to make the best decision possible under the circumstances, then release from the outcome. Don't blame yourself if the outcome isn't what you wanted or expected - you don't have control. You can always make another decision to correct the situation.
It is interesting to observe that despite the clear distinction between decisions and outcomes, the person, party or organization, who made the decision is generally credited or blamed for the outcome. Unfortunate.
dan@wisedecisions.com
(707) 570-2227
