Decisive: How to Make Better Choices in Life and Work

by Chip Heath

4. Caution: Probing questions can backfire in situations with a power dynamic. • Doctors are wiser to use open-ended questions. “What do you mean by ‘dizzy’?”

5. Extreme disconfirmation: Can we force ourselves to consider the opposite of our instincts? • A marriage diary helps a frustrated spouse see that his/her partner isn’t always selfish. • “Assuming positive intent” spurs us to interpret someone’s actions/words in a more positive light.

6. We can even test our assumptions with a deliberate mistake. • Schoemaker’s firm won $1 million in business by experimenting with the RFP process. • One woman actually married her “mistake.”

7. Because we naturally seek self-confirming information, we need discipline to consider the opposite.

Many people have come to take this kind of review shopping for granted. We hunt routinely for the rating of a book on Amazon or a restaurant on Yelp or a digital camera on CNET. It’s an obvious thing to do, right? But this “obvious” behavior shows wisdom. Because when we make decisions based on reviews, we are acknowledging two things: (1) Our ability to glean the truth about a product is limited and subject to distortion by the company that makes it; and (2) For that reason, we are smarter to trust the averages over our own impressions.

imagine a restauranteur, Jack, who is deciding whether to take out a loan to start a Thai restaurant in downtown Austin. What’s in the spotlight, for him, will be all the factors going for him: I’m a wonderful Thai cook. The location on 4th Street would be perfect. The foot traffic in that area is huge. There’s no other Thai restaurant close by. From the inside view, the opportunity looks pretty good. By contrast, the outside view does not treat Jack’s situation as unique. It looks for the averages: Are there other people who’ve faced a similar situation, and if so, how did they fare? This involves looking for, in statistics terminology, some “base rates” on the situation—data showing the record of other people in similar circumstances. Jack might learn, for instance, that 60% of restaurants fail in their first three years. From the outside view, the restaurant looks pretty risky.

LIKE JACK THE RESTAURANTEUR, Kahneman and his colleagues were optimistic when they took the inside view. The puzzle here is the dean’s behavior.

Perhaps the simplest and most intuitive advice we can offer in this chapter is that when you’re trying to gather good information and reality-test your ideas, go talk to an expert. If you’re considering filing an intellectual-property lawsuit against a competitor, talk to a top IP lawyer.

The point is that the predictions of even a world-class expert need to be discounted in a way that their knowledge of base rates does not. In short, when you need trustworthy information, go find an expert—someone more experienced than you. Just keep them talking about the past and the present, not the future.

What we’ve seen so far is a very simple rule for analyzing your options: Take the outside view. You should distrust the inside view—those glossy pictures in your head—and instead get out of your head and consult the base rates. Sometimes those numbers are readily available, as on TripAdvisor or Yelp. Sometimes you might have to cobble them together yourself. If neither of those options is possible, try consulting an expert for their estimates of the base rates.

A lot of people like us—people full of passion for their opportunities—spent their time trying something very similar to what we’re contemplating. To ignore their experience isn’t brave and romantic—“I’m not going to let some analysis stand in the way of doing what I believe.” Rather, it’s egotistical. It’s saying, We set ourselves apart from everyone else. We’re different. We’re better.

“What can I reasonably expect to happen if I make this choice?” Once we accept the answer—and trust it to make our decision—then we can turn our attention to fighting the odds.

These insights didn’t arise from asking doctors about base rates. Nor did they come from a flawed “inside view” approach—he was not simply trusting his own impressions; he was diligently gathering evidence. What, exactly, was his strategy? Brian wanted more textured information, more color. He wanted to see, with his own eyes, what life was like for these patients. And that’s what we’ll see next: In assessing our options, the best complement to the big picture is often a close-up.

He was also aggressive about developing sources of “ground truth,” cultivating a network of sources outside the federal government, such as businessmen, academics, friends, and relatives. They served as his eyes and ears outside of the bureaucracy. “Go and see what’s happening,” he told one. “See the end product of what we are doing. Talk to people; get the wind in your nose.”

One of the White House staffers reflected on Roosevelt’s mastery of the flow of information: “He would call you in and he’d ask you to get the story on some complicated business, and you’d come back after a couple of days of hard labor and present the juicy morsel you’d uncovered under a stone somewhere, only to find out he knew all about it, along with something else you didn’t know.… After he had done this to you once or twice, you got damn careful about your information.”

Much more than prior presidents, Roosevelt used the mail as a strategic source of information. In his fireside chats, he encouraged Americans to send him their views, and they responded: The White House averaged 5,000 to 8,000 pieces of mail per day. If the volume of mail dipped, he groused to his advisers about it. Roosevelt insisted that the mail be analyzed scientifically; he had it sorted by category and by stance, and these statistical breakdowns were delivered to him as “mail briefs.” These briefs provided ready-made base rates on the public’s point of view.

Imagine that you’re craving Mexican food for dinner, so you look on Yelp for a restaurant, and you find a nearby spot that garnered a 3.5-star rating, which is good but not great. Ordinarily you’d hold out for 4 stars, but in this case you decide to read a sample of the reviews, and what you find is that most people rave about the food but there’s a subset of people who are irritated about the high prices. Well, now you’re untroubled, because you’re a high roller! A Mexican-food connoisseur! You have no problem paying a high price for a truly tasty plate of enchiladas. The base rates obscured the texture of the reviews, but the close-up view revealed it.

Practitioners of Total Quality Management encourage leaders to “go to the genba” to understand problems. If a problem occurs on a factory floor, for example, engineers should go see it firsthand, assessing the situation and talking directly to the people involved. The best ideas, it’s believed, come from this kind of close-up sensory investigation of the situation; how can you improve something you don’t fully understand? So engineers diagnosing problems in a factory find it useful to have a close-up view of the relevant process, and Mulcahy found it useful to give her leadership teams a close-up view of how Xerox was treating its customers. A consumer research director at Procter & Gamble (P&G) named Paul Smith used a similar technique to give his colleagues a close-up view of their competitors.

WHEN WE ASSESS OUR choices, we’ll take the inside view by default. We’ll consider the information in the spotlight and use it to form quick impressions. The Polynesian Resort looks great. My Thai restaurant is a sure thing. What we’ve seen, though, is that we can correct this bias by doing two things: zooming out and zooming in.† When we zoom out, we take the outside view, learning from the experiences of others who have made choices like the one we’re facing. When we zoom in, we take a close-up of the situation, looking for “color” that could inform our decision. Either strategy is helpful, and either one will add insight in a way that conference-room pontificating rarely will. When possible, we should do both.

Zooming out and zooming in gives us a more realistic perspective on our choices. We downplay the overly optimistic pictures we tend to paint inside our minds and instead redirect our attention to the outside world, viewing it in wide-angle and then in close-up.

To ooch is to construct small experiments to test one’s hypothesis.

In trying to meet the biologists’ needs, Hanks’s team didn’t bother building an elegant product. Elegance is expensive and time-consuming. Instead, they cobbled together a prototype using what they had on hand. Hanks compared the result to a “brick in a bucket.”

Rather than choose “all” or “nothing,” they chose “a little something.” That strategy—finding a way to ooch before we leap—is another way we can reality-test our assumptions. When we ooch, we bring real-world experience into our decision.

Ooching is a diagnostic, then, a way to reality-test your perceptions. If you think the wireless-sensor market is promising, try it first. If you think you want to be a pharmacist, try it first. The strategy is useful even for more subtle situations.

It was inconceivable to Peggy that she could proof a document only once and be satisfied with her work. The stakes seemed too high. So, in conjunction with her therapists, she created a list of ooches—small, incremental steps that would allow her to reality-test her fears—to see whether the sky would really fall if she eased up on her proofing regimen. If she survived one ooch, she’d move on to the next.

That real-world interaction sparks insights that lead to the next prototype, and the design improves in an iterative fashion.

for a book-length treatment of the ooching philosophy, see Peter Sims’s book Little Bets.

The “ooching” terminology is our favorite, but we wanted to be clear that these groups are all basically saying the same thing: Dip a toe in before you plunge in headfirst. Given the popularity of this concept, and given the clear payoff involved—little bets that can improve large decisions—you might wonder why ooching isn’t more instinctive.

In the design world, the diva product designer just knows, in his gut, that the product is right. The idea of a “quick and dirty prototype” just makes him roll his eyes. You don’t prototype elegance. That diva-ish, “I just know in my gut” attitude is inside all of us. We won’t want to bother with ooching, because we think we know how things will unfold. And to be fair, if we truly are good at predicting the future, then ooching is indeed a waste of time.

it is impossible to find any domain in which humans clearly outperformed crude extrapolation algorithms.” In other words, if you gave a teenager some base-rate information and a calculator, she could handily outpredict the experts.

Ooching provides an alternative—a way of discovering reality rather than predicting it.

Same idea with creating a minimum viable product.

One similarity among many entrepreneurs, she said, was an aversion to prediction. “If you give entrepreneurs data that has to do with the future, they just dismiss it,” she told Inc. magazine. Entrepreneurs don’t seem to believe that forecasting is worth the bother: One survey found that 60% of Inc. 500 CEOs had not even written business plans before launching their companies.

Rather than continuing to debate, the team ooched and resolved the uncertainty. The ooch led to the founding of CarsDirect.com, which within three years of its founding was the largest auto dealer in the nation.

Sarasvathy, the professor, found that this preference for testing, rather than planning, was one of the most striking differences between entrepreneurs and corporate executives. She said that most corporate executives favor prediction; their belief seems to be, “To the extent that we can predict the future, we can control it.”

Scott Cook, the founder of Intuit, has become so convinced of the virtues of ooching that he now endorses what he calls “leadership by experiment.” Leaders, Cook believes, should stop trying to have all the answers and make all the decisions.

By making decisions through experimentation, the best idea can prove itself.

The idea was that farmers would pay a small subscription fee to receive, via their cell phones, information about the current prices being paid for various crops at different markets. That way, they could take their harvest to the market offering the highest price.

Ooching is best for situations where we genuinely need more information. It’s not intended to enable emotional tiptoeing, in which we ease timidly into decisions that we know are right but might cause us a little pain.

Ooching, in short, should be used as a way to speed up the collection of trustworthy information, not as a way to slow down a decision that deserves our full commitment.

Ooching = running small experiments to test our theories. Rather than jumping in headfirst, we dip a toe in.

Ooching is particularly useful because we’re terrible at predicting the future.

Entrepreneurs ooch naturally. Rather than create business forecasts, they go out and try things.

Caveat: Ooching is counterproductive for situations that require commitment.

Common hiring error: We try to predict success via interviews. We should ooch instead.

Why would we ever predict when we can know?

Widen Your Options Reality-Test Your Assumptions Attain Distance Before Deciding Prepare to Be Wrong

So if you’re facing a dilemma and you feel stuck, our first advice is to loop backward in the WRAP process, using some of the tools we’ve already encountered: Run the Vanishing Options Test. Find someone who has solved your problem. Look for a way to ooch.

When people share the worst decisions they’ve made in life, they are often recalling choices made in the grip of visceral emotion: anger, lust, anxiety, greed.

But we are not slaves to our emotions. Visceral emotion fades. That’s why the folk wisdom advises that when we’ve got an important decision to make, we should sleep on it. It’s sound advice, and we should take it to heart. For many decisions, though, sleep isn’t enough. We need strategy.

One of the pioneers in the field was Robert Zajonc (whose name now feels strangely likable …). When Zajonc exposed people to various stimuli—nonsense words, Chinese-type characters, photographs of faces—he found that the more they saw the stimuli, the more positive they felt about them.