“Decision-making is everything. In fact, someone who makes decisions right 80% of the time instead of 70% of the time will be valued and compensated in the market hundreds of times more. “

If there are hundreds of alternatives and if you cannot decide, the answer is no.
Split between two even paths: take the path that is more difficult and more painful in the short-term. 
Take the choice that will leave you calmer in the long term.

What type of decision is it?

  1. Is it irreversible and inconsequential? Delegate or decide quickly
  2. Is it reversible and inconsequential? Delegate or decide quickly
  3. Is it reversible and consequential? Gather evidence, try experiments
  4. Is it irreversible and consequential? Spend time deciding. Protect from downside risk. Try to use Coinbase framework?

8 step Smart Choices

  1. Work on the right problem.
  2. Identify all criteria.
  3. Create imaginative alternatives.
  4. Understand the consequences.
  5. Grapple with your tradeoffs.
  6. Clarify your uncertainties.
  7. Think hard about your risk tolerance.
  8. Consider linked decisions.

Keep in Mind

  1. The Map is not the Territory
  2. Circle of Competence
  3. First Principles Thinking
  4. Thought Experiment
  5. Second-Order Thinking
  6. Probabilistic Thinking
  7. Inversion
  8. Occam’s Razor
  9. Hanlon’s Razor

Preliminary Questions: Ask yourself

1. Check for Self-interested Biases

Is there any reason to suspect the team making the recommendation of errors motivated by self-interest?
Review the proposal with extra care, especially for overoptimism.

2. Check for the Affect Heuristic

Has the team fallen in love with its proposal?
Rigorously apply all the quality controls on the checklist.

3. Check for Groupthink

Were there dissenting opinions within the team? Were they explored adequately? Solicit dissenting views, discreetly if necessary. Challenge Questions: Ask the recommenders

4. Check for Saliency Bias

Could the diagnosis be overly influenced by an analogy to a memorable success?
Ask for more analogies, and rigorously analyze their similarity to the current situation.

5. Check for Confirmation Bias

Are credible alternatives included along with the recommendation?
Request additional options.

6. Check for Availability Bias

If you had to make this decision again in a year’s time, what information would you want, and can you get more of it now?
Use checklists of the data needed for each kind of decision.

7. Check for Anchoring Bias

Do you know where the numbers came from? Can there be …unsubstantiated numbers? …extrapolation from history? …a motivation to use a certain anchor?
Reanchor with figures generated by other models or benchmarks, and request new analysis.

8. Check for Halo Effect

Is the team assuming that a person, organization, or approach that is successful in one area will be just as successful in another?
Eliminate false inferences, and ask the team to seek additional comparable examples.

9. Check for Sunk-Cost Fallacy, Endowment Effect

Are the recommenders overly attached to a history of past decisions?
Consider the issue as if you were a new CEO.
Evaluation Questions: Ask about the proposal

10. Check for Overconfidence, Planning Fallacy, Optimistic Biases, Competitor Neglect

Is the base case overly optimistic?
Have the team build a case taking an outside view; use war games.

11. Check for Disaster Neglect

Is the worst case bad enough?
Have the team conduct a premortem: Imagine that the worst has happened, and develop a story about the causes.

12. Check for Loss Aversion

Is the recommending team overly cautious?
Realign incentives to share responsibility for the risk or to remove risk.