What Is a Decision and Why It Should Matter to You

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6 Minute
Last updated
April 15, 2024

What is a decision?

It is a question you've probably not thought about, but you should have.

You make thousands of decisions every day. Most of the time, you won't even realise you're making a decision. That's how little you think about them.

It is this lack of awareness that leads you to make bad decisions. And it is this position of finding yourself with an outcome you didn't want that brings you here.

In this article, I'm going to answer what a decision is and explain why it should matter to you. I'll explain the three sides of a decision—information, outcome and action. You'll see how you can influence these to improve your decision quality. With the right decision, the outcomes you want will become more likely.

So, let's dig in.

This article covers:

What is a Decision?

A decision is your view of current information added to potential actions to achieve a desired outcome.

It seems too simple, but a decision is simply a combination of three parts.

  • Information
  • Outcome
  • Action

Let's examine this in more detail.

A basic example is the need for you to eat.

What compels you to eat is hunger. The feelings your mind experiences are points of information. Your body needs fuel and the hunger pains are data points to alert you. Of course, the outcome is to not feel hungry and to replenish those energy levels back to a level you can live with.

Action describes the food you're going to eat.

Unsurprisingly, the action takes consideration. We have to think about the availability of food. It's cost, time, and whether it will give us enough fuel before we get to the moment of choosing.

Our mind is well practised with this type of because it's one we've made before.

It is, what Daniel Kahneman refers to as 'type 1' thinking. This concept comes from his book, Thinking Fast and Slow. We tend to think of them as intuitive decisions and as they are subconscious choices, we don’t give them any conscious thought.

Conscious decision-making is type 2 thinking.

These contain the same three parts as described earlier. The difference is the outcome is one we aren't familiar with, so our mind wants to think more deeply about it.

Why Does Decision-Making Matter?

You are your decisions.

Every choice you make creates your future. Regardless of how or what you decide, you will have to live with the consequences.

And some of those choices can have a profound impact. It only takes a second to cross a busy road without looking. It only takes another second for the driver to take more notice of the car behind than you. It only takes a second for the car to hit you, causing serious injury.

Often, the decision impact isn't so sudden, but more drawn out. Take the continuous late nights, combined with early starts and the impact it has on you. Your energy levels are low. Your concentration levels are short and lack quality.

It could result in missing out on a promotion or worse.

These simple decisions aren't thought about, but they can make a big difference in your life. Quite simply, they can change the direction of your life in a moment.

This all sounds rather negative, and it shouldn't, because there are big upsides too. As much as a decision can go against you, it can go for you.

In truth, you'll get more decisions right than you'll get wrong. Most of them you won't even know about. But some will impact your life—and that of others more than you could ever grasp.

Life will give you choices. Being ready to make those decisions when they arrive is the key to getting ahead.

The Force Spoiling Your Perfect Decision

Once you can see the importance of your decisions, the more you want them to be better.

There is a big challenge to your perceived quality of decisions and that is the outcome you end up with. You will judge decision quality by the quality of the outcome.

A good outcome must have meant a good decision and the opposite for a bad outcome. This isn't true.

Entropy is a law of nature which brings randomness, luck and uncertainty into our world. It's why, despite cutting your lawn quickly, the grass will grow back at different lengths. It's why we can't predict the future.

Entropy increases the longer you leave it. Yes, the longer you take between cuts, the messier your lawn will look. Once you are aware of this law, the more you'll see it at work.

Chris Williamson's Twitter bio isn't wrong when he says, " Locally reversing entropy." We all are.

The point of becoming aware of entropy is this. No matter how good your decision-making process is, outcomes will not always be the ones you want.

This can work for you and against you. Hence when I said a good outcome doesn't always mean you made a good decision.

Randomness and luck can still fall on your side.

Armed with this knowledge, we need to factor this into our decision-making.

How to Make Better Decisions

With type 1 thinking, the time between choice and outcome is often smaller, so the outcome is more likely. But with type 2 thinking, where the outcome is more unknown, and without reference, we need to be more cautious.

It is here, we also need to focus on making better decisions.

In the beginning, when I tackled the question, what is a decision, I highlighted the 3 elements of a decision.

  • Information
  • Outcome
  • Action

You have control over each of these.

Remember this.

The information you have explains your starting position. The outcome tells you where you're going. The action describes how you'll get there.

Once you've made your choice, it's down to you to act on the actions you considered. Only then will know if you were right or not.

A step to making better decisions is to take ownership of each step. You need to challenge each element by asking:

  • What does the information tell me?
  • What outcome is most likely?
  • What actions can help?

When the outcome is uncertain, especially with big decisions, we need to get these right.

It is here, we find another risk to our decision-making.

Overcoming Indecision

The downside of considering information, outcomes and action is you appear to dither.

Indecision is still a decision. It is your choice not to decide. In an environment where the outcome isn't perfect, neither does your decision need to be.

You can get so caught up in what you decide, you forget how to decide. The process matters more than the outcome.

So, what can you do to beat this insidious trap?

The first step revolves around the position of reversibility. Some decisions are like two-way doors. You can walk through, try the outcome that's there and if you don't like it, you can go back.

Of course, you can stay if you like what you see. But not all decisions are reversible.

Some come with a degree of permanency.

This means you have to be confident you're going to like the outcome on offer. The downside is uncertainty breeds indecision.

So breaking this step means playing with probabilities.

In a court of law, the pressure is on the prosecutor to prove guilt beyond a reasonable doubt. Using the same bar can help you escape the need for perfect information.

At Amazon, Jeff Bezos perfected the 70% rule. Instead of looking for perfect information, accept a lower threshold of data. Let's face it when you're at 70%, what difference will the extra 30% make?

Conclusion

Making decisions is something we take for granted.

It happens—all the time. Most will not even trouble us as we go about our lives.

But, you can't escape the fact our decisions define us. They are moments in time when we have absolute control over what we want to do next. And before reading this, you may not have given it much thought.

The purpose of this article was to give you a detailed understanding of what a decision is. The reason for this comes from a lesson I took from McDonald's. In building the business, the McDonald brothers focused on this mantra;

"Make every detail perfect and limit the number of details to perfect."

When you ask what a decision is, I've broken it down into three detailed parts. I've explained how these three parts form the foundation of your choice. All you need to do is make the processing of each one perfect.

It's simple, but not easy.

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