Decisive – how to make better choices in life and
work
by Chip Heath and Dan Heath
Introduction
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We have intuitive feelings and opinions about
almost everything that comes your way
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Quick to jump to conclusions because we give too
much weight on the evidence in front of us and failing to consider the offstage
evidence
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Spotlight effect
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Why do we have problems with making good
decisions? The biases. The irrationality. The gut feeling. Careful
analysis.
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The process of making good decisions matters
more than analysis. Is it fair? Did you consider all possibilities?
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The pitfalls of the “pros-and-cons” list
1. The
Four Villains of Decision Making
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1) Narrow
Framing. The tendency to define our
choices too narrowly, to see them in binary terms. Ex. Should I buy a new car OR not? Ex. Cole hired 5 agencies to do a small
project to combine the best ideas forward.
This
spotlight on the alternative (i.e. OR) at the expense of all the others.
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2) Confirmation
bias. Our normal habit in life is to
develop a quick belief about a situation and then seek out information that
bolsters our belief.
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3) Short-term
Emotion. Ex. Intel decision to
discontinue memory products and only continue with microprocessors. Often decision models are listing key factors
and weighing the importance of each factor and then do the math. But often our feelings churn, agonizing
circumstances. What we need most is
Perspectives – to see the bigger picture.
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4) Overconfidence.
People think they know more than they do about how the future will unfold. We focus and shine spotlight on what we know
now, the information close at hand, but we don’t really know what we don’t know
they exist.
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The 4 steps when you encounter a decision
process
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You encounter a choice. But narrow framing makes
you miss options.
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You analyze your options. But the confirmation
bias leads you to gather self-serving information.
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You make a choice. But short term emotion will
often tempt you to make the wrong one.
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Then you live with it. But you’ll often be
overconfident about how the future will unfold.
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The process should now be: WRAP
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Widen
your options – think of new and better options. “AND not OR”
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Reality-test
your assumptions. Instead of stewing his own data, go out and seek out new
data. Ask craftier questions.
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Attain
distance before deciding. determining what were the really important
factors
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Prepare
to be wrong. Asked for insurance instead of a I’ll be perfect for the job
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Ex. Steve Cole’s horse race (5 companies working
on one project). Ex. Andy Grove’s question what would our successor do?. Ex.
Van Halen no brown M&Ms in contract with list of instructions (tripwires to
break the auto-pilot routine)
Widen your options
2. Avoid
a Narrow Frame
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Teenagers and organizations are prone to narrow
frame. With a lack of options. A statement of resolve or a whether or not
question. Blind to their choices
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Often think “how can I make this work” “how can
I get my colleagues to behind me” instead of the better, more options questions
- “Is there a better way” “What else could we do”
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Widen
your options - often our options are far more plentiful than we think
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think deeper, what do you want in life, and what
school best fits me into
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Why is it so hard for us to see the bigger
picture?
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Economics –
OPPORTUNITY COST – what we give up when we make a decision. Ex. $40 Mexican
+ $20 movie or $60 sushi + TV. Ex.
Stereo + music or stereo. Given a slight
reminder you can buy other things without the immediate purchase – people
choose not to buy things.
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Being exposed to a slightly weak alternative is
enough
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What are
we giving up by making this choice? What else could we do with the same time
and money?
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Vanishing
Options Test – you CANNOT choose any of the lists of options. What else would you do? When people imagine
that they cannot have an option, they are forced to move their mental spotlight
elsewhere – and really move it – to generate another option.
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Multi-track
– considering several options simultaneously
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Ex. Lexicon naming projects often forms three
teams of twos with each group pursuing a different angle.
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Work in parallel and endure inefficiency and
wasted time for the most creative work – you learn the SHAPE of the problem
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Sometimes reluctance is still instructive. The
choice pitch may know the right option, sometimes you don’t. but act of surfacing another option still
help us make better choices
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Exploring multiple options simultaneously may
generate DECISION PARALYSIS. But we
are asking to push one or two more options.
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Cobble together the best features of our options
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Helps us keep
our egos in check – one project per person feel criticism against the person,
whereas several project per person feel criticism against the projects. Your ego is tied up to your only one option.
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Combine the mindset of PREVENTION and PROMOTION… seek out options that minimize harm and
maximize opportunity – uncover a full spectrum of choice
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Prevention focus = avoid negative outcomes
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Promotion focus = pursue positive outcomes
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Ex. reducing stress and increasing happiness
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Beware of SHAM
OPTIONS – ex. three options with two bad ones surrounding one good one to
narrow frame the decision
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Push for “this AND that” rather than “this OR
that”
4.
Find Someone Who’s Solved Your Problem
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To break out of a narrow frame of mind, a basic
way is to find someone else who’s solved your problem
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Ex. Walmart owner Sam Walton – “benchmark”
competitors and absorb industry “best practices”
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Ex. Sepsis. Difficult to detect, and why
intervene early when there’s no sign.
Change -> whenever order a blood culture (physician worries about a
blood borne infection), a lactic acid test is also ordered (indicator of
sepsis). Sepsis alert – “code blue” equivalent to cardiac arrest alert.
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Ideas can stem from externally or internally.
Search for best practices. Look for bright spots within own organization.
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And generate a PLAYLIST – proactive search on how it was done (like a quick
thorough brainstorm of list of items before action, to spark new ideas, and to
remind yourself to shine your spotlight everywhere, spurs us to multitrack)
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What if there are no best practices to consult
or no bright spots to study from?
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Ex. how scientists think by ANALOGY. Looking at similar
experimental design or organisms.
“search for other problems that have been solved”
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Granular problems benefit from local analogy,
and conceptual problems benefit from regional analogies. Like a ladder, the lower rugs offers views
very similar to yours and has a high probability of success, meanwhile higher
up more and more options but requires leaps of imagination thought with a high
probability of failure.
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Ex. speedo designs after watching shark’s skin
and torpedo structure
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Evade a narrow frame,
o
by widening your options (asking different
questions, changing situation)
o
Use the Vanishing Options Test – what if I can’t
do either of them? What would I do? Ask different questions
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Multitracking by “AND not OR” – how to do both?
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Playlist – stimulate new ideas
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Find someone that has solved our problem
internally (bright spots), externally (competitors, benchmarking, best
practices), and into the distance (laddering up)
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How then do we avoid the Confirmation Bias?
Reality-Test your assumptions5. Consider the Opposite
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It is unwritten law that businesses should be
growing every year. Yet there are
countless CEO’s making poor acquisition decisions every year. This seems to be correlated with the praising
press of the CEO’s – increasing their over self-confidence.
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A good CEO need the courage to seek out CONSTRUCTIVE DISAGREEMENT
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CONFIRMATION
BIAS – hunting for information that confirms our initial assumptions (self-serving). It is a tendency to find data that confirms
out bias/wish/thinking (twice more likely to favor confirming information than
disconfirming information) – especially when lots of time and effort has been
invested.
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Ex. Reference check for your favourite candidate
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What’s
the best way to assess the options we generated?
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Consider
the opposite – spark constructive disagreement. Search for disconfirming
information. – built into legal systems and Church’s devil’s advocate for the
canonization of a saint
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How do you plan for disagreement inside
organizations? Build in prescribed both sides for constructive argument –
allows you to see from both sides
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Change your way of thinking from “Here’s why we
picked the decision” to “What data convince us of that? This will back away your beliefs and allow
factual exploration by which they give themselves an opportunity to learn
something new
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Asking tough, disconfirming questions can
improve the quality of information. Ex.
iPods – “What problem does it have?” vs “What can you tell me about it”
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ASK DISCONFIRMING
QUESTIONS to people who have an incentive to spin you. Esp. salesman, recruiters etc.
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Open
ended questions work better for
doctor/patient situation
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To distinguish which question to ask, ask
yourself, “What’s the most likely way I
could fail to get the right information in this situation?”
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For marriages, confirmation bias also affects
your notion of the spouse. If you are
frustrated with your spouse about not appreciating you, you would often notice
the times that he didn’t. For therapy it
is recommended to keep a “marriage diaries” that keep tracks of things that pleases them.
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ASSUME
POSITIVE INTENT principle is a version of consider the opposite
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Test assumption by a deliberate mistake
6.
Zoom Out, Zoom In
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Often in life, we trust our impressions over
averages.
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“Inside view” vs “outside view” of a
situation. Inside view draws information
that is in our spotlight as we consider a situation – our impression and
assessment of the situation we are in.
The outside view ignores the particulars and analyzes the larger part of
it.
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The outside view is often more accurate.
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Yet often we trust our inside view. Ex. Entrepreneurship of opening a Thai
restaurant.
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“base rates” – data showing record of other
people in similar circumstances
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Find an expert.
Experts are pretty bad at predictions. But they are great at assessing
base rates.
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Ex. bone marrow transplant patient. Take the outside view and pushing for base
rates from doctors and journal articles.
But also the inside view from individuals who had similar treatments and
start to self-impose an exercise regime.
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Mixture of big picture view and close up
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Ex. Franklin D. Roosevelt, also ask public mail
and get sorted base rate information about the general public opinion, and
double the research team to check information. Read statistical summaries and
read a sample of real letters.
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Ex. Xerox touch base with their customers
combining scientific data and personal experience
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Zooming out and zooming in gives us realistic
perspectives on our choices. We downplay
the overly optimistic pictures we tend to paint.
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To gather the best information, we should zoom
out and zoom in for realistic perspectives and not rely on our rosy painting.
7. Ooch
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Ooching – running small experiments to test our
theories. Rather than jumping in headfirst,
we dip a toe in
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Proof of concept experiments
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Ooching is particularly useful because we are
all terrible at predicting the future
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Entrepreneurs ooch naturally. Rather than create
business forecasts, they go out and try things
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Ex. CarsDirect.com – selling cars directly on
internet
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Ex. Kids wanting to change order of breakfast
and getting change
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Caveat:
Ooching is counterproductive for situations that requires commitment Ex.
mid-20s guy wanting to go back to school but dreads going back.
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Common hiring error – we try to predict success
via interviews.
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Ex. med student’s success rate.
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We should ooch instead through volunteer, probation
periods. Allows for expectations of a
job. Results in greater satisfaction.
Once we have
widened our options and reality-test our assumptions, often the foremost enemy
of a wise decision is you.
Attain Distance before Deciding8. Overcome Short-Term Emotion
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Fleeting emotions tempt us to make decisions
that are bad in the long term. Sometime too
confidence and too quick to act, and sometimes too slow and timid and reluctant
to take action. Feelings bias toward the familiar.
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Ex. car salesman to prey on customer’s short
term emotion to close a deal. Test drives.
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To overcome distracting short-term emotions, we
need to attain some distance. Ex. Avoid
direct contact with car lots
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10/10/10
provides distance by forcing us to consider future emotions as much as present
ones. How will I feel about this in 10 minutes? 10 months from now? 10 years
from now?
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Our decisions are often altered by two subtle
short term emotions: 1) mere exposure (we like things that are familiar to us)
and 2) loss aversion (losses are more painful than gains are pleasant)
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Ex. organizational truth as ideas that they’ve
been repeated a lot
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Ex. mugs exposed to students
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Loss aversion + mere exposure = status quo bias
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Ex. PayPal ditching their PalmPilot product and
pursue their more basic web-based product
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We can attain distance by looking at our
situation from an observer’s perspective
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Ex. What would our successor do? What would my best friend do?
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Adding distance highlights what is most
important, it allows us to see the forest and not the trees
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Perhaps the most powerful question for resolving
personal decisions is “What would I tell my best friend to do in this
situation?”
9.
Honour Your Core Priorities
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Quieting short-term emotion won’t always make a
decision easy
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Ex. job offer vs family values. Even after the initial excitement faded, she
still agonized over the job offer for weeks
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Agonizing decisions are often a conflict among
your core priorities
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Core
Priorities – long term emotional values, goals, aspirations. What kind of person do you want to be? Ex.
job vs family. What kind of organization
do you want to build? Ex. non-profit locally or nationally
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The goal
is not to eliminate emotion. It’s to
honor the emotions that count
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By identifying and enshrining your core
priorities, you make it easier to resolve present and future dilemmas
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Ex.
Interplast, recurring and nagging debates settled when determined that the
patients were the ultimate “customer”.
Often use vague words like integrity to describe their core
principles.
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Ex. Use of rules and guiding principle to make
decisions correctly and consistently
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Establishing
your core priorities is, unfortunately, not the same as binding your to
them
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Ex. parents wanting to spend more time with kids
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To carve out space to pursue our core
priorities, we must go on the offense against lesser priorities
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Ex. USS
Benfold – to actively fought the List B items like repainting so that they have
more time and energy to concentrate on List A items
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“Stop
Doing List”- what will you give up so that you have more time to spend on
your priorities?
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Hourly
Beep – am I doing what I most need to be doing right now? (like a tripwire)
10. Bookend Your Future
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The future is not a “point” – a single scenario
that we must predict. It is a RANGE. We
should bookend the future – consider a range of outcomes from very bad to very
good
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So that we are prepared for the worst, but as well
as prepared when something is going well
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Ex. investors bookend analysis of investing
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Our predictions grow more accurate when we
stretch our bookends outward
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To prepare for the lower bookend, we need a pre-mortem. An analysis of thinking
what would happen that make us fail 2 years from now? “It’s a year from now,
our decision has failed utterly. Why?” What are the biggest risks?
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Ex. 100,000 homes campaign avoided legal threat
by using a pre-mortem style analysis
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To be ready for the upper bookend, we need a pre-parade. “It’s a year from now. We’re heroes. Will we
be ready for success?”
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Ex. Softsoap, hoping for a huge national launch,
locked down the supply of plastic pumps for 2 years
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To prepare for what can’t be foreseen, we can
use a “SAFETY FACTOR”
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Ex. engineers multiply number by a factor. Elevators.
Buffer factor.
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Anticipating problems can help us cope with them
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Ex. realistic job preview
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Ex. rehearse asking for a raise, and how the
boss would react
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By bookending – anticipating and preparing for
both adversity and success – we stack the deck in favour of our decisions
What would make us reassess a choice we’ve
made? What could we learn that would make us retreat from a choice we’ve
made? What would make us redouble our
efforts? What we need is something that
snaps us awake at just the right moment – a tripwire.
11. Set a Tripwire
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In life, we naturally slip into autopilot,
leaving past decisions unquestioned
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A tripwire can snap us awake and make us realize
we have a choice
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Ex. Zappo’s $1000 offer to quit
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Ex. Concert brown M&M’s to signal that he
needed to inspect the production
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Tripwires can be especially useful when change
is gradual
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Ex. digital image killed Kodak. Could have set
tripwires to allow bolder change
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For people stuck on autopilot, consider deadlines or partitions.
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Ex. Set a specific date to review. Annual review. Or Separate money into
different envelopes
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We tend to escalate our investment in poor decisions;
partitions can help rein that in.
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Ex. spends only 50k on this jump start project.
And see what happens in 1 year.
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Tripwires can actually create a safe space for
risk taking
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1) cap risks
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2) quiet your mind until the trigger is hit
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Many powerful tripwires are triggered by PATTERNS rather than
dates/metrics/budgets
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Ex.
children’s hospital told nurses to call rapid response team
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Ex. drug companies to remarket Rogaine as hair
growth or Viagra as male erectile dysfunction treatment
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Tripwires can provide a precious realization: we
have a choice to make
12. Trusting the Process
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Decisions made by groups have an additional
burden: they must be seen as fair
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Bargaining – horse trading until all sides can
live with the choice – makes for good decisions that will be seen as fair
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Bargaining
will take more time upfront but it accelerates implementation
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Procedural
justice is critical in determining how people fell about a decision
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Ex. court cases: losers who perceive procedural
justice are almost as happy as winners who don’t
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We should make sure people are able to PERCEIVE
that process is just
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Ex. the best way to defend a decision is to
point out its flaws
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A trustworthy process can help us navigate even
the thorniest decisions
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Ex. ARTS to combine need to serve local kids and
his aspirations to make a national impact
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PROCESS
isn’t glamorous. But the confidence it can provide is precious. Trusting a
process can permit us to take bigger risks, to make bolder choices. Studies of
the elderly show that people regret not what they did but what they didn’t do.
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Allows us to stop agonizing “What am I missing”
Summary
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WRAP process
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Widen your options – add one or more options to
your consideration sets
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Reality test your assumptions – call an expert
to educate base rates in your situation
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Attain distance before deciding - resolve tough dilemmas by asking options
best fit your core priorities
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Prepared to be wrong – bookend the future for
both what could go wrong and right and then do something to prepare for both
contingencies
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Discover options. Avoid narrow framing. Run the vanishing options tests. Call someone
who has solved your problem. What would
I tell my best friend do? Run a
pre-mortem and pre-parade. Consider bookends,
what would make us fail and what would make us succeed?
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Process gives you confidence in your choice; it
doesn’t make the decision easier though.
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Bolder is often the right direction. Short run emotion often makes us prefer the
status quo. Process will give you
comfort, a safety net to be bolder.
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Our decisions will never be perfect, but they
can be better, bolder and wiser
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The right process can steer us toward the right
choice
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The right choice, at the right moment, can make
all the difference.
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