Decisive: How to Make Better Choices in Life and Work

by Chip Heath

Kahneman says that we are quick to jump to conclusions because we give too much weight to the information that’s right in front of us, while failing to consider the information that’s just offstage. He called this tendency “what you see is all there is.

we’ll refer to this tendency as a “spotlight” effect.

One study of corporate mergers and acquisitions—some of the highest-stakes decisions executives make—showed that 83% failed to create any value for shareholders.

Beyond the analysis, Lovallo and Sibony also asked the teams about their decision process—the softer, less analytical side of the decisions. Had the team explicitly discussed what was still uncertain about the decision? Did they include perspectives that contradicted the senior executive’s point of view? Did they elicit participation from a range of people who had different views of the decision?

“process mattered more than analysis—by a factor of six.” Often a good process led to better analysis—for instance, by ferreting out faulty logic.

But the reverse was not true: “Superb analysis is useless unless the decision process gives it a fair hearing.

discipline exhibited by good corporate decision makers—exploring alternative points of view, recognizing uncertainty, searching for evidence that contradicts their beliefs

The only decision-making process in wide circulation is the pros-and-cons list.

“Any time in life you’re tempted to think, ‘Should I do this OR that?’ instead, ask yourself, ‘Is there a way I can do this AND that?’ It’s surprisingly frequent that it’s feasible to do both things.

the first villain of decision making, narrow framing, which is the tendency to define our choices too narrowly, to see them in binary terms.

Our normal habit in life is to develop a quick belief about a situation and then seek out information that bolsters our belief. And that problematic habit, called the “confirmation bias,” is the second villain of decision making.

“Confirmation bias is probably the single biggest problem in business, because even the most sophisticated people get it wrong. People go out and they’re collecting the data, and they don’t realize they’re cooking the books.

This brings us to the third villain of decision making: short-term emotion.

fourth villain of decision making is overconfidence. People think they know more than they do about how the future will unfold.

We can’t deactivate our biases, but these people show us that we can counteract them with the right discipline. The nature of each villain suggests a strategy for defeating it:

You encounter a choice. But narrow framing makes you miss options. So … → Widen Your Options

You analyze your options. But the confirmation bias leads you to gather self-serving info. So … → Reality-Test Your Assumptions

You make a choice. But short-term emotion will often tempt you to make the wrong one. So … → Attain Distance Before Deciding

Then you live with it. But you’ll often be overconfident about

how the future will unfold. So … → Prepare to Be Wrong

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

“whether or not” decisions failed 52% of the time over the long term, versus only 32% of the decisions with two or more alternatives.

Nutt argues that when a manager pursues a single option, she spends most of her time asking: “How can I make this work? How can I get my colleagues behind me?” Meanwhile, other vital questions get neglected: “Is there a better way? What else could we do?

Focusing is great for analyzing alternatives but terrible for spotting them.

What if we started every decision by asking some simple questions: What are we giving up by making this choice? What else could we do with the same time and money?

Vanishing Options Test, which you can adapt to your situation: You cannot choose any of the current options you’re considering. What else could you do?

“multitracking”—considering several options simultaneously.

Multitracking keeps egos in check. If your boss has three pet projects in play, chances are she’ll be open to unvarnished feedback about them, but if there’s only one pet project, it

will be harder for her to hear the truth. Her ego will be perfectly conflated with the project.

First, comparing alternatives helps executives to understand the “landscape”: what’s possible and what’s not, what variables are involved. That understanding provides the confidence needed to make a quick decision. Second, considering multiple alternatives seems to undercut politics. With more options, people get less invested in any one of them, freeing them up to change positions as they learn.

Third, when leaders weigh multiple options, they’ve given themselves a built-in fallback plan.

One rule of thumb is to keep searching for options until you fall in love at least twice. If you’ve only identified one good candidate for a job, for instance, you’ll have the strong urge to talk yourself into hiring her, which is a recipe for the confirmation bias.

Psychologists have identified two contrasting mindsets that affect our motivation and our receptiveness to new opportunities: a “prevention focus,” which orients us toward avoiding negative outcomes, and a “promotion focus,” which orients us

toward pursuing positive outcomes.

the wisest decisions may combine the caution of the prevention mindset with the enthusiasm of the promotion mindset.

prevention-focused companies, with their focus on cost cutting, tended to adopt a “siege mentality.” Inside these companies, they write, “pessimism permeates the organization. Centralization, strict controls, and the constant threat of more cuts build a feeling of disempowerment. The focus becomes survival—both personal and organizational.

The promotion-focused companies, on the other hand, tended to be naive and slow to react. The researchers said these companies developed “a culture of optimism that leads them to deny the gravity of a crisis for a long time.

The most successful companies acted more like multitrackers, combining the best elements o...

what if, instead, we could cut 8%, so that we could free up some money to invest in our most exciting opportunities? What’s our best chance to make a great leap forward?

one of the most basic ways to generate new options is to find someone else who’s solved your problem

If all hospitals could match Kaiser Permanente’s 28% reduction, it would be the annual equivalent, in lives saved, of saving every single man who dies from prostate cancer and every single woman who dies from breast cancer.

If you take the time to study and understand your bright spots—how exactly did you manage to get yourself to the gym on those four days?—then you can often discover unexpected solutions.

But there’s a lot to be gained by taking the results of your search and recording them for future use—to turn a reactive search into a proactive set of guidelines.

playlist of questions

What kind of iconography within the brand is useful and what could we build around it?

Is there a key color for the brand? • What is the enemy of this product? • What would the brand be like if it was the market share leader? • What if it was an upstart? • Can you personify the product?

Is it possible the budget can be cut by delaying planned expenditures rather than by paring existing expenditures? I can delay a few IT hires. That will help a little but not a lot. • Have you exhausted other potential sources of income that might relieve the need for cutting? Not much promise here—we certainly can’t raise taxes in this climate. We can try to attract corporate sponsors, but those efforts wouldn’t pay off until next year. • Resist the urge to cut everything by a fixed amount. Think about ways to be more strategic with cuts. It might be wise to be strategic about the hours we restrict. For instance, with the library near the college, we could leave the evening hours intact but move the opening time later. In the neighborhood that’s full of retirees, we could open at the same time but close earlier. • Could you cut deeper than you need to in order to free up funds to invest in exciting new opportunities? This might make a lot of sense. If we closed our least utilized branch and cut back hours, that would free up $2 million that we could invest in our online tools, which would allow everyone in the community

one of the reliable but unrecognized pillars of scientific thinking is the analogy.

And the key to using analogies successfully, he said, was the ability to extract the “crucial features of the current problem.

This required the scientist to think of the problem from a more abstract, general perspective, and then “search for other problems that have been solved.