The resounding yes

One of the benefits of learning to tune out the noise to pay more attention to our gut is that it becomes significantly easier to make decisions.

The gut, it turns out, doesn’t generally mess about with 50-50 decisions. Instead, it lets us know when it is a resounding yes (a “hell yeah”).

The key is paying attention to that sign while recognizing that the absence of that resounding yes is a no.

No further deliberation required.

Benefits of good decisions compound over time

When Liverpool Football Club appointed Jurgen Klopp as their manager in 2015, I remember telling a good friend I was sad he wasn’t a Manchester United manager. Klopp had spent 7 years with Borussia Dortmund and transformed them into a German powerhouse club. He was exactly the kind of long term thinker we needed.

He was appointed in the early part of the season and while Liverpool had shown some signs of improvement by the end, there was plenty left to be desired. They finished 8th in the league.

The next season was his first full season and there were visible signs of improvement. Liverpool were now 4th in the league and qualified for the European Champions League.

In his third season, Liverpool were beginning to do well and look consistently dangerous. They finished 4th again and had an impressive run to the finals of the Champions League. Thanks to a bit of misfortune, they missed out.

Klopp invested in areas they were weak over the summer and Liverpool came out all guns blazing this season. It looks like they’ll narrowly miss winning the league – thanks to an exceptional season by their direct competitor to the title. But, against all odds, they overturned a 3-0 deficit against Barcelona yesterday to win 4-0 and make their way to the finals of the Champions League again. This time, only a fool would bet against them.

All this context underscores the central point – the benefits of good decisions compound over time. Liverpool have been making positive strides every season and have been looking consistently better than their previous versions. That sort of improvement isn’t made overnight. But, viewed over a period of time, it is easy to realize the power of building strong foundations and making small improvements that compound over time.

Seeing the progress he’s made in the past 4 years is a good reminder to make long term decisions. As long as you have the conviction, stay the course and do it with a great attitude (as he does).

It may not seem to pay off for a while.

Until it does.

Decision making speed > accuracy

Most decisions – say 90% – we make in our lives are reversible.

As a general principle for these reversible decisions, I’ve found it helpful to prioritize speed of decision making over accuracy.

This sounds crazy at first – why wouldn’t we try to get decisions right?

It turns out there’s a huge cost in waiting for all the information to appear. So, if we prioritize making the decision quickly instead, we can also go back and change the decision if we see data that tells us otherwise.

Over the long run, two things happen. First, quick experimentation beats deliberation.

And, second, with more repetition, we begin to develop a better gut and nose for the right direction. At that point, decision making speed morphs into decision making velocity (velocity = speed + direction – in this case, a direction that is in the ball park).

Decision making velocity, in turn,  leads us to good judgement.

Unhealthy but comfortable – first and second order consequences

First and second order consequences are regularly in opposition. Unhealthy food, for example, has a good first order consequence (tasty) but a bad second order consequence. The effects of exercise or self reflection, on the other hand, are the opposite.

Most good things suck at first thanks to the inertia involved. This is why it is hard to keep adapting and evolving and why most people and organizations find it easier to be stuck in their old ways.

The big question, a question that we inadvertently ask ourselves when we make decisions, is – will we choose a painful but healthy route to progress or an unhealthy but comfortable delusion?

(H/T: Principles by Ray Dalio)

Reflections from replacing a screen protector

I received a replacement screen protector recently (warranty). As detail oriented tasks are not my strong suit, I went to an AT&T store to request help with putting it on my phone screen.

A minute into the procedure (for the lack of a better word), the sales associate who kindly helped out was getting visibly frustrated. He had aligned it nicely but was unable to remove four remnant air bubbles. So, I gave it a try and got the number down to two – both of which were below the screen.

As he was steeling himself to try again, I thanked him for his time and explained that I’d be happy to live with this.

I admittedly came home and tinkered with it for another minute – but, I stopped.

For every such decision, I can think of multiple – big and small – where I’ve wasted a lot of time attempting to get to better and then to perfect. No good has come out of that wasted time.

The list of things worth maximizing in this life are very short. The sooner we realize that, the easier and happier our days are.

And, in case you are wondering about screen protector – I haven’t noticed it yet. When I do, I plan to do what I generally do when dealing with damaged objectives – I remind myself that the bubbles exist to remind me that life isn’t perfect.

It isn’t – thanks heavens for that.

3 notes on decisions for the week

3 notes on decisions for the week –

1) Being afraid of making decisions is as useless as being afraid of being judged. Both are happening – whether we like it or not. So, we’re better off accepting that fact and dancing with it.

2) Once we commit to rising above the fear and making decisions, it is a certainty that we’ll get a few of them wrong. The only useful habit when faced with these mistakes is a focus on a creative, constructive, and corrective response. Fix issues and avoid repeat mistakes.

3) Nearly every decision we’re worried about right now won’t matter a jot in the long run. The stakes are generally far lower than we think. Worry less, smile more – this will pass.

Doing the thoughtful thing

The trouble with aiming to always do the right thing is that it doesn’t apply to a majority of situations we encounter everyday.

Every once a while, we may encounter a situation where we know exactly what the right thing is. But, more often than not, it is unclear what we ought to optimize for and for what time frame.

A better approach, then, is to aim to do the thoughtful thing. It is a great approach to minimize regret and maximize peace as it means we’ve done the best with what we know. When we know better, we will do better.

And, besides, it turns out that the right thing is just the cumulative result of one thoughtful decision after another.

In data we (don’t) trust

There’s a growing legion of companies and product teams that aspire to call themselves “data driven.” When they make decisions, they tell tales of how Google tested 40 shades of blue and eliminated the need for intuition and gut-based decision making.

But, as data might suggest, extreme beliefs in any approach are problematic and a belief in data driven decisions is no exception.

For the data to point the way, we need suitable problems, the right inputs and tracking based on good questions and thoughtful hypotheses, reliable data pipelines, good analytical judgment in overlooking outliers and picking a robust methodology, and versatility in the tools to analyze and interpret the outputs. Every once a while, all of these align and it all just works.

But, for the most part, we’re better off marrying a desire for data with a healthy skepticism for what it is telling us. It is that skepticism that will ensure we keep pushing for the right questions and iterate our way into insights that get us closer to the truth.

Better to be data informed than data driven.

Optimal Stopping

We were trying to sell an old car recently and had placed it in a used car parking lot. These lots charge a monthly rent. So, you are incentivized to sell your vehicle within the first month. The question for us, then, – when is the optimal time to sell? For example, do we hold out till the end of the month and wait for the best offer?

Luckily, mathematics has a solution for us. The optimal time to stop is at 37%. If you have a 100 candidates for your next role, the most optimal way to make a decision on the best candidate is to reject the first 37 and then pick the first of the next few that is better than the first 37. Essentially, the algorithm suggests we use the first 37 to calibrate.

Optimal stopping can be extended to time as well. In this case, we had 30 days to sell and 37% of 30 days is 11.1 days. By that logic, we would hold out for the first 11 days and then sell – assuming a half decent offer comes along. Our first offer came after 14 days and we sold for a price that was eventually slightly lesser than we’d planned for. But, we had no regrets because math told us that we’d made the optimal decision.

Algorithms like optimal stopping are likely the future of psychology and behavioral economics. Optimal stopping can be applied to choosing a restaurant, a spouse, and while buying a house. As we learn about our fallibility in making decisions, we can use algorithms like this one to get better at making decisions.

(H/T: Algorithms to Live By – Brian Christian and Tom Griffiths)

Lessons from buying jeans

A decade or so ago, I bought two pairs of jeans and loved them. I wore those pairs until a year ago when they couldn’t handle my bulging abs (okay, okay, I just put on some weight).

Over the past couple of years, I’ve been wearing jeans more frequently thanks to graduate school and a workplace where wearing jeans is the norm. So, I reflected on my jeans purchase record recently. Since my 100% hit rate a decade ago, I’ve purchased 6 pairs of jeans in the last 3 years and my hit rate is around 50%. I gave away 2 pairs and still use 4 pairs but, really, use only 3.

So, why the low hit rate? Each time I went to buy jeans, I went in attempting to solve a particular frustration. It was either trying to get a more comfortable pair or trying to find a certain color or, more recently, trying to find a more comfortable waist size. So, I always over indexed on that and ended up forgetting other my key priorities.

I abhor waste. My wife and I moved continents two years ago with just 6 suitcases that contained all of our belongings. And, we try hard to keep things simple and make the most of what we buy. So, thinking about this jeans hit rate does annoy me.

However, as writing here as taught me, mis-steps are simply learning opportunities. And, in that spirit, here are 3 simple steps to better buying decisions. One note before we get to the list – this is from a satisficer’s point of view. So, I view over-analyzing small decisions as waste as well. :-)

3 steps to better buying decisions –

  1. Envision success. What does success look like?
  2. Stack rank priorities. Make sure you have a list of 3-4 things that really matter to you.
  3. Keep this list of priorities with you when shopping.

The best part about this process is that it takes all of five minutes. However, the five minutes are well spent as they’ll save money and eliminate any unhappiness from unnecessary or uncomfortable purchases. And, given we spend a significant portion of what we earn buying things, it is worth the investment to do this right.

It is likely you do some version of this for your “big” purchases. However, I think it is worth doing for the small things as well – they add up.

Minimalism and efficiency are a beautiful thing. And, besides, excellence is not an act, but a habit.