Bad Decisions: 5 Rules to Help You Avoid Terrible Choices

Cognitive Biases
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9 Minute
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Isn’t a bad decision another name for a bad outcome?

Does our decision-making get bad press because we can’t grasp the impact of luck on our choices? I believe it does. Let’s face it, we’re all control freaks at heart and our brains can’t process the impact of entropy in our lives. Most of us don’t want to cede control to the pitfalls of uncertainty, randomness and luck.

The reality is the forces of entropy influence our lives far more than we dare to admit.

But, it shouldn’t excuse us from making some terrible choices.

Yes, even without the swirling forces of luck waiting to strike, we are more than capable of making a stream of poor decisions. We react without hesitation. Impulse urging us forward without any consideration of even the most important decisions.

Our cognitive biases offer their inherited view pushing us first one way and then the other.

Oh yes, making decisions is hard.

That's why we make so many poor decisions.

I’m here to offer some perspective—a new way—in the form of rules to help you avoid making bad decisions.  Before we get into those preventive measures, we need to clarify one central question…

What is a bad decision?

It’s a question which many people can’t answer easily.

Dick Vitale captures the essence of this confusion here: “Life is simple. Make good decisions and good things happen. Make bad decisions and bad things happen.”

Dick firmly states the quality of an outcome is directly relational to the quality of the decision. Arthur Eddington would argue fervently against this statement. The Second Law of Thermodynamics is quite clear in the role of uncertainty, randomness and luck play in our lives.

Betting in the Grand National shows us this.

Five horses have won the race with odds of 100/1. Betting like this—on a horse with such long odds—defines a poor decision. 5 horses in 183 races have won, which suggests it's a lucky event—and unlucky for those with lower odds.

Yes, probability weighs heavy on the 100/1 horse not winning, but entropy plays its hand and—well who knows.

It means Dick Vitale was wrong.

Never confuse a bad decision for a outcome you didn’t want or expect.

For me, a bad decision is a moment when the process of selection is incorrectly followed. It is a failure to follow a sequence of considerations to ascertain your preferred outcome. This truth lies at the heart of every poorly made decision. What we should never do is confuse a bad decision for an outcome we didn’t want or expect.

Grasping this is the first step to help you avoid making bad decisions.

Why do we make terrible choices?

Terrible choices fall from the turbulence in our minds.

Knowing what fuels this turbulence can help us to make important decisions in the right way and lead us away from a potentially dire choice. This whirlwind of thoughts comes via a complex system of inherited behaviours. We have mental models and cognitive biases, all constructed from moments in our past—and our relatives past.

These learnings teach us survival instincts—so we intuitively know whether we should fight, take flight, or freeze in moments of danger. Mental models enable us to identify patterns and give us tools to improve our decision-making.

But what really sets the sparks flying in our minds is our environment.

The circumstances of our physical condition matter, as it impacts the state of our minds. In turn, what this does to our emotions, along with the influence of other peoples feelings. Then we must add in the fear or desire which accompanies risk and opportunity.

These are elements from our environment, and they are like dry straw to a naked flame in our heads.

If managing the environment wasn’t hard enough, we have other areas of complexity, bringing yet more confusion. Good judgements rely on a good decision-making process. Those without such a process find their heads full of gunpowder waiting for a spark.

Some rules can help us avoid making bad decisions, easing the pressure of an explosion of error.

5 rules to avoid terrible choices.

  1. Don’t make important decisions when you’re emotional, tired, hungry, distracted, or in a hurry.
  2. Don’t let anyone define the problem for you.
  3. Get your information as near to the source as you can.
  4. Always ask ‘what do I know to be true?’ Filter out incomplete information.
  5. Reflect on your decision to learn what worked and what didn’t.

Now we need to understand these rules in more detail.

1. Don’t make important decisions when you’re emotional, tired, hungry, distracted, or in a hurry.

Our minds are at their weakest when they are trying to manage some deficiency.

It doesn’t matter whether it's hunger, tiredness, feeling emotional, or being in a hurry, the impact is always the same. The urgency to satisfy one of these negative feelings leads us to act impulsively. We don’t consider information correctly,  as our attention is elsewhere.

Rule: Don’t make important decisions when you’re emotional, tired, hungry, distracted, or in a hurry.

2. Don’t let anyone define the problem for you.

Problem-solving drives a lot of poor decisions.

The simple truth is we attempt to solve the wrong problem. It happens when we let others explain the problem to us, rather than diagnosing the issue ourselves. To solve any problem, you need to understand the fundamentals. Without this, the root cause will never reveal itself—and you’ll risk solving the wrong problem.

Understanding the problem means defining it so you can explain it to yourself.

Rule: Don’t let anyone define the problem for you.

3. Get your information as near to the source as you can.

Chinese whispers lead us astray in much the same way the butterfly effect works.

Information from the source, or as near as you can get to it, reduces the impact of the butterfly effect.

Rule: Get your information from as near to the source as you can.

4. Always ask ‘what do I know to be true?’ Filter out incomplete information.

Questions are our fluff filter.

Great questions catch the impurities of incomplete information. They also enable us to check any assumptions we might have previously made.

What do I know to be true? Asking this simple, but in-depth question forces us to question everything before us. Are our assumptions correct? Do we understand the fundamental truths of the decision we face? What isn’t true?

We can answer all these questions by asking this one question.

Rule: Always ask what do I know to be true? Filter out incomplete information.

5. Reflect on your decision to learn what worked and what didn’t.

Reflection is the most powerful component there is to help us learn, although it is sadly underused.

When you take time to review your previous judgements, you open the door to your past—but also your future. History explains the past and shapes the future. Our challenge is not to let the biases of outcome or hindsight teach us myth’s about what we decided to do or not do.

A decision journal can help you overcome this problem.

Until we begin recording our decisions, none of us knows whether we are good at making decisions or not. Writing them down opens the door to following a good decision-making process as well.

So, there is much to gain from structured reflection via a journal.

Rule: Reflect on your decision to learn what worked and what didn’t.

Concluding Thoughts

We all make bad decisions.

It doesn’t matter who you are; the slip into impulsive, biased driven actions which go against rational and logical thoughts affects us all. No one is perfect, which is why—even with the tips from this article—you will still make bad decisions.

But you can minimise their frequency. You can set yourself these five decision-making principles.

Rules give you a chance of avoiding the downside of a bad decision.

Principles can do that for you.

The upside to avoiding terrible choices isn’t going to bring you better outcomes, but it is going to improve the one thing you control—your decision.

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