The 3 dynamics of decision-making to consider when making any decision.
We make decisions all day, every day and often without thought. We think of decisions as a binary choice; of yes or no - and then, we make them quickly.
Sometimes, we pause to consider the consequences. Other times, we jump straight in. To hell with the outcome. Regret and hindsight all kick in when things go wrong. But we rarely pause to try and learn from our mistakes. Blame often falls on the other party, like it’s God’s fault when it rains.
It’s always someone else’s fault.
No longer consumed with hunting to survive, improving occupies our minds. No matter the subject, we want to know more, learn more and be better than before.
When it comes to our decisions, we must open our minds to the process of reflection. Before we can improve our decisions, we must understand the factors within one. I've labelled these factors as dynamics because they're not consistent. They change and evolve, complicating every decision we ever make.
What are the dynamics involved in making decisions?
As I said, dynamics are the variable factors that influence every decision we make. And although we nit-pick at the shifting sands of the choices we make, they come down to three factors.
• Information - before we can decide, we need to be aware of the information we have. Where most of us fail is that we don't question the validity of the information.
"What do we know to be true?"— Ray Dalio
Ray Dalio features this question a lot in his work and life principles. Applying this question to your information forces you to recognize where it is incomplete - a fact we ignore most of the time.
• Emotion - whether we like it or not, emotion influences our decisions all the time. How we feel changes, often within the blink of an eye.
Being aware of your emotional state is an essential skill in decision-making. Once you have awareness - you have the insight into its impact.
• Chance - Maria Konnikova's excellent book, The Biggest Bluff: How I Learned to Pay Attention, Master Myself, and Win highlights an ugly truth.
"Even with the best hand, you can still lose."
Accepting what you can control, and what you can't control is crucial in decision-making. The impact of chance is everything that's beyond our control. It plays a huge part in the outcome of our decisions. And yet, we blame it when we fail, and we ignore it when it goes for us - claiming the success ourselves.
The Awareness of Choice
Being aware of the three dynamics of decision-making gives a glimpse to the depth behind every choice we ever make. Awareness brings visibility - providing you're open to it. If you are, well, you'll start to see how ignorant we are of these factors.
We consider information, but we rarely question the validity of it. We certainly don't ask ourselves what we know to be true, as Ray suggests. Consider the inverse of this question; what information can’t we be certain of?
Incomplete information is where our assumptions reign supreme.
How many of us assess the weather by looking outside? We decide what to wear for the day, based on a glimpse of the sky. By not checking the weather forecast we are accepting incomplete information. Think back to the last time you cursed the rain falling from the sky. Did you check the weather forecast?
Of course, emotion plays its part in every decision, and often it's the emotion of someone else who's affecting your feelings. Looking back, we have the chance to reflect on our emotions.
Put yourself in the helicopter pilots’ seat as you replay the decision; what can you see?
We can't forget chance, the bringer of luck and the factors we have no control over. Understanding that chance affects our decisions, and their outcome is hard. Managing risk is something good decisions encapsulate.
Limiting risk is reducing the impact of chance.
As Tim Ferriss says; the chance of being in a road traffic accident is low, but we still wear seatbelts.
We live with the three dynamics of decision-making all the time, but we are rarely aware of them. Only through awareness of the three dynamics can you reflect on your decisions.
Reflection is the door to learning.
It offers a way for us to assess our decisions. To consider how we react with information – both complete and incomplete. To see our emotions and understand how the emotions of others influence our choices. Luck, chance, call it what you like, it swings with us and against all the time.
By reflecting on these dynamics, we can learn to make the right choices to manage their impact. We mustn’t confuse decisions with outcomes. A good decision won’t always result in a good outcome, but you can minimise the downside.
It is easy to forget these variables, especially when the outcome sucks.
But denial won’t help us. It won’t improve our decisions and it certainly won’t help improve the outcomes we want.
Don't ignore the dynamics of decision-making.