3 Ways To Instantly Make You Better At Decision-Making
~ "Everything should be made as simple as possible, but not simpler"
Flipping a coin.
List of pros and cons.
Asking your friends to decide for you.
There are many ways to make a decision. But none of the above will make you better at it.
But one thing will… Simplicity
Everything should be made as simple as possible, but not simpler
—Einstein
I’m currently reading the book Simple Rules.
It’s about rules… That are simple.
The book has loads of lessons. But the chapter about how to make better decisions stuck out to me.
The author says there are 3 moments you should have rules:
When deciding what to do
When deciding what to focus on
When deciding when to stop
Here are the key ideas you can use to make better decisions.
What should you do?
How do you decide which house to rob?
Researchers asked this question to Canadian burglars. They showed them pictures of houses taken at different times of the day. Then they asked “Would you rob this house?”
Their decision-making wasn’t rocket science. They weren’t interested in:
The type of lock on the doors
The security system in the houses
The landscape and if it could provide cover
It was much simpler. They were interested in one thing:
“Was there a parked car outside?”
If there was, they’d skip it. If not, they’d consider it.
When you have thousands of houses to choose from, this simple Yes/No question made their life easier. And their job safer, faster, and simpler.
“But why a parked car?”
Their golden rule is to never rob a house with people inside. And the most reliable way to check if someone is home is to see if there’s a parked car outside.
You don’t need to complicate your life to narrow down your choices.
If you can’t decide on where to live, what to study, or which restaurants to go to, think like Canadian burglars. Keep things simple by using Yes/No questions. It’s the fastest way forward.
What should you focus on?
In the 1990s, after Brazil had its first elected government, it started to privatize the rail system.
It was a sh*t show:
Bridges falling apart.
Decades without investments
Venomous snakes biting employees at train lots
But this didn’t stop a private equity firm from buying part of the infrastructure. That’s how rail company ALL was born. Then they appointed Alex Behring as CEO.
His job wasn’t a walk in the park.
The company’s income relied heavily on the seasonal crop market. But the rail system was so bad that during peak season they couldn’t keep up with demand. After crop season ended, almost no money flowed in.
On top of that, the company needed $150m in investments. But the CEO had only $15m to invest.
In this situation, how do you decide what to invest in?
Despite graduating from Harvard, he didn’t ask for cash flow models. Instead, he grabbed all managers and asked them to come up with simple rules to decide what to invest in. They came up with 4 rules projects had to meet:
Remove inefficiencies to grow revenue
Provide immediate benefits (instead of benefits decades later)
Have low initial cost
Recycle existing resources
These 4 rules empowered everyone, from upper management to line workers, to make suggestions. This led to solutions like:
Recovering old engines from trains not being used
Buying used trains from African countries
Fixing the railway using material from abandoned stations
Making the fuel tank bigger to reduce downtime (less refueling, faster routes. This was suggested by a front-line manager).
Within 3 years the company became the largest railway operator in Latin America.
This story proves (again) the power of simplicity when making decisions.
Deciding what to focus on can be very business-oriented. But I still use this in my life as well. For example, when I want to decide which books to read, I have 2 simple rules:
The book has to solve an immediate problem I have.
If the book doesn’t solve an immediate problem, I’ll still read it only if I can’t stop thinking about it (like the book Simple Rules. It doesn’t solve a problem, but I’m obsessed with simplicity)
If you’re trying to do too much all the time, create (simple) rules to drive your focus to what matters. If you focus on the right things every day, it will change your life.
When should you stop?
1996 was one of the deadliest days in the Everest.
12 people died. Why? Because when it rains, it pours. Many problems happened at the same time, like:
A combination of heavy snow followed by a blizzard
Bottlenecks at the top because too many people were trying to reach the summit.
Team leaders who wanted to get their clients to the top (and show off to the other)
But one problem stands out above all that. The simple Everest rule ever made:
If the clock hits 2pm and you haven’t reached the summit, it’s time to turn around.In 1996 team leaders ignored this golden rule. They thought they could beat Mother Nature. There was also pressure from their rich clients (who paid $60,000+ to touch the top of Everest). They reached the top almost 2 hours later. Fatal mistake.
But knowing when to stop doesn’t have to be under life or death situations
For example, 6 months ago I started to read a book about storytelling.
A collection of 5 small stories (about 20 pages each). As I read them, the author explains what the original author was thinking, the way they set the scene, the characters, etc.
As I started to the second story, I started to lose interest. Every time I opened my Kindle to read I felt as excited as if I was about to vacuum my entire house.
So I decided to stop. Why?
Simple. I read to learn. And when a book stops adding value, it’s time to quit (it’s OK to stop reading books).
Knowing when to stop is a skill you develop over time. It can save you time (and your life) if you apply it correctly. Start something knowing when to stop. And stick with the rules you created.
Making better decisions won’t keep you from making bad decisions
Making better decisions is a sign you’re getting better at life.
But part of life is also about making mistakes.
Don’t expect all decisions to be perfect. That’s not the goal here. The goal is to have simple rules to guide you through a complex world.
What are your rules to navigate the world?
Love the Canadian burglar example. Cute and so clear.