How To Make Better Decisions

Recently I was asked ‘Do you have any resources on how to make better decisions?’

For the person asking the question, big decisions tended to be okay (because if you make a goal then you can make decisions around that goal).

But it was the little decisions that were leaving her hamstrung.

 

 

Little decisions like where to go out for dinner. Because for her, and for many others, if you have a multiple options, trying to whittle them down and figure out what the best option is can sometimes be tricky.

So I asked her tell me a bit more about what happens.

What happens when you’re standing there on the street in the restaurant precinct wondering, Which restaurant do I go to?

The thing is she doesn’t even get that far. They don’t just go out and pick a place. They actually have to have it all organised beforehand.

What it really sounded like to me is that she was trying to not make the wrong decision.

And that’s one of my pet subjects!

We try not to make the wrong decision.

And that implies there’s a right decision and a wrong one.

In terms of choosing a restaurant it suggests there’s one right place to go and 150 wrong ones, which is mathematically impossible.

But nevertheless, we don’t want to make a mistake, we don’t want to get it wrong.

We go into this battle and we even get stuck in what’s called ‘paralysis by analysis’ as we try to work through all of the reasons for and against something.

RELATED: How To Live Life With No Regrets

What we don’t recognise is there’s actually a third decision – and that is no decision.

There’s the right decision, the wrong decision, and no decision.

Take a moment to think about that in your own life.

Of those three – the right decision, the wrong decision and no decision – which one has done you the most damage?

Of course the answer for the person who asked me the question was no decision.

So in effect you’re actually torturing yourself by trying to make the right decision. Because no decision is actually the decision to not decide yet, so it’s an absolute disaster because it throws you into no-man’s land.

If you think about it logically, you actually can’t make the right decision about the restaurant because you haven’t been there yet…

 

 

So if you’re deciding between two restaurants that you have never visited before, then you’ve got 50% chance of getting it right, so you might as well flip a coin.

(I know a guy who used to carry an American silver dollar in his pocket. Was it a good luck thing? I don’t know but he also used it to make decisions.)

I did this with a couple of guys who were splitting up a business that was doing a 20 million a year.

These guys were partners and they knew that one of them had to go and one of them had to stay and they were both kind of ambivalent about it.

They actually didn’t care who should stay and who should go. So it’s a little bit like, you know, Chinese or Lebanese, it’s kind of like which restaurant? It doesn’t really matter.

A bit more at stake, but nevertheless, along the same lines.

So they asked me, “What do we do?”

And this was my answer:

“You have to divide the assets and you have to put a line down the middle of a page and list the assets either side of the middle line in such a way that you will be happy whichever side you end up on – because I’m going to flip a coin.”

 

 

They made a list and guess what? That list was pretty fair because they knew that with a flip of a coin they could end up on either side. So they were both very careful about how they listed the assets to make sure that no matter which way they went, it was a pretty even split.

Because they could end up on the right, or they could end up on the left.

That was about splitting the assets.

So then we focussed on the question… “Who’s going to stay and run the business and who’s going to get a payout and retire? Heads it’s you and tails it’s the other guy.”

And as I flipped the coin the most amazing thing happened. While it was in the air, one guy reached up and grabbed it and caught it and stuck it in his pocket and said, “It wasn’t until the coin was in the air that I realised which side I wanted it to come down on so I’m here to tell you that I actually want to stay.”

His partner said, “That’s amazing. I actually want to go.”

There’s massive value in making a call either way. The funny thing about the right decision and the wrong decision is that it doesn’t take you long to find out if you’ve made the wrong one.

If you made the wrong decision you can just undo it.

Particularly the small stuff.

You know the restaurant thing? You can get through entrée and decide, “You know what, it’s not worth staying here” and move on.

A lot of decisions can be reworked.

But of course, once we’ve made a decision, we insist on making it right. So there’s a lot of impetus on staying at that restaurant because “Well, we’re here now and it’ll take a while to move. It’s a bit embarrassing to tell them we’ve had enough”.

So we make ourselves right rather than admit it was the wrong decision.

Take another example:

You could go to someone that you’ve married and you could say, “You know what, this is the wrong thing. I realise it’s not fair to you or to me for us to stay married. I hope that doesn’t hurt you too much, but it would hurt you more if I stayed and I didn’t tell you the truth so we need to end this because it’s not right for me, therefore it can’t be right for you.”

You can marry the wrong person and still fix it.

Most people don’t. Most people stick with it.

Most people want to make the wrong decision the right one and the way they do that is they stay.

When I stand in front of crowds and I say, “Hands up if you’ve ever had to end a relationship,” and then I say to the people who’ve got their hands up, “How long after you knew it was unrecoverable that you actually made the call?” The average is five years.

That’s five years of agony.

That’s five years where they both could have been getting on with it.

The reason for the delay was maybe you minimise the harm. Maybe I’m wrong about this. Maybe it’s all going to come good… but it’s all maybe, maybe, maybe.

TIP: Get a coin and start flipping the coin!

If you decide between two different restaurants and you flip a coin, the way the coin goes, whether it comes up heads or tails will tell you how you really want to go anyway. Because if it comes up heads, and that means we’re going Lebanese – and you feel disappointed – well then you know that you actually wanted to go Chinese.