The Decision Checklist: A Practical Guide to Avoiding Problems

by Sam Kyle

First, our minds tend to rationalize the outcome of our decisions, because it’s hard to admit when we are wrong.

Second, it’s hard to draw cause-and-effect relationships we can learn from, because of the time between the results of our decisions and the decision itself. Rarely do we see that the problems we’re facing today were caused by decisions we made months or years ago.

When I first started to use a decision journal, it was clear to me that I had optimism bias. This means I was focusing on the possible positive outcomes while not anticipating and preparing for potential negative ones.

It’s counterintuitive, but if you want to make better decisions and increase your productivity, you need to take the time to think about your decisions.

“Whenever you’re making a consequential decision . . . just take a moment to think, write down what you expect to happen, why you expect it to happen and then actually, and this is optional, but probably a great idea, is write down how you feel about the situation, both physically and even emotionally. Just, how do you feel?” Keeping a decision journal prevents something called hindsight bias, which is when we tend to look back on our decision-making process, and we skew it in a way that makes us look more favorable.

The situation or context. The variables that govern the situation. The complications or complexity as you see it. Alternatives that were seriously considered, and why they were not chosen. A paragraph explaining the range of outcomes you deem possible, with probabilities. A paragraph explaining what you expect to happen, and the reasoning. (The degree of confidence matters, a lot.) The time of day you’re making the decision, and how you feel physically and mentally. (If you’re tired, for example, write it down.)

Charles Frankel, who was an American philosopher and founding director of the National Humanities Center, once wrote, “A system is responsible in proportion to the degree that the people who make the decisions bear the consequences.”

We look for information that fits our thoughts, and ignore information that doesn’t.

A latticework of mental models is just like it sounds: a weaving together of many different mental models in order to deepen your wisdom, and therefore your decision-making skills.

The central principle of the mental-models approach is that the mental models must be fundamentally lasting ideas, and you must have a large number of them.

The great investor and teacher Benjamin Graham explained it best: A good idea taken to the extreme becomes a bad idea.

When one model tells you one thing, and another model tells you another, that means you’re getting somewhere.

Charlie Munger says, “It’s not a competency if you don’t know the edge of it.”

If you’re not in your circle of competence, find someone with more knowledge than you on the subject. Don’t ask them what to do; instead, ask them what variables matter, and why. Seek to understand how the variables interact. You’ll start developing your circle, and will make a better decision than you would have alone.