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Edition #208 – December 14th, 2023
​A newsletter by Anne-Laure Le Cunff​

Making Smart Decisions

Chocolate or vanilla? Trello or Jira? Atom or VS Code? Stay in or go out? Should I click on this link or not? We make thousands of choices everyday, often automatically, using mental models we have created over years of experience.

Decision-making is the process we use to identify and choose alternatives, producing a final choice, which may or may not result in an action. It can be more or less rational based on the decision maker’s values, beliefs, and (perceived) knowledge.

Because we have to make decisions everyday — at work and in our personal lives — it’s surprising that smart decision-making is not taught in school. It’s the kind of skill everyone should have in their mental toolkit.

How your brain makes decisions

Neuroscientists recorded the brain activity of participants while they were either told what to do or if they could freely decide how to act.

It turns out, our brain reacts in a different way when we can make our own decisions. The anterior cingulate cortex (ACC), orbitofrontal cortex and the ventromedial prefrontal cortex are all involved in this complex process.

What’s interesting is that these areas are not only involved in the formation of a decision, but also signal the degree of confidence associated with the decision.

The ACC in particular is involved in the management of what is called reinforcement information. This is when you do something, observe a consequence, and adapt your future behavior accordingly. Another study found that damage to the ACC made it difficult to use reinforcement information to guide decision-making.

So, to make decisions, you need to be able to leverage information to adjust your actions. But there’s another important source of data your brain uses in decision-making: your emotions.

Sure, we would love to think that all of our decisions are rational, but research suggests otherwise. For example, studies found that “fearful people made pessimistic judgments of future events whereas angry people made optimistic judgements.” In another study, participants who had been induced to feel sad were more likely to set a lower price for an item they were asked to sell.

According to the somatic marker hypothesis, our emotions strongly influence our decision-making. Whenever we are about to make our decision, “somatic markers” — which are feelings in our body that are associated with emotions, such as nausea and disgust, or rapid heartbeat and anxiety — act as guides telling us how to act.

So much for rational decision-making! Making decisions actually involves hen managing a host of biological responses happening in the background as well as mental processes that are influenced by past experiences and cognitive biases.

Our mental baggage

Poor decision-making rarely has to do with a lack of intelligence or information. Instead, we it’s often due to the ‘mental baggage’ we bring to the table when considering our options.

• Analysis paralysis. You may know this one under the term “overthinking.” You basically tend to spend so much time analysing all the possible outcomes that you never end up making a decision — which, often, is a bad decision in and of itself. Analysis paralysis is mostly driven by the fear of making a mistake, which many smart people experience, especially in high-pressure situations.

• Overconfidence. On the other hand, you may overestimate your ability to make a good decision. Studies suggest that a little bit of self-doubt is good for decision-making. Because critical thinkers tend to be skeptical of everything, including their own ability to make decisions, they end up making slower yet better decisions than otherwise intelligent people with limited critical thinking skills.

• Information overload. We usually use information at our disposal to reduce uncertainty and make what we think our sound decisions. But sometimes, there’s more information that we can actually process. This can result in the illusion of knowledge and poor decision-making.

• Lack of emotional or physical resources. Sometimes, people are just too tired or stressed to think clearly. This drives them to make decisions based on instinct or to go for the path of (seemingly) least resistance. This is common in demanding jobs.

• The “what the hell” effect. This effect has been mostly studied in the context of dieting, but applies in many areas of decision-making. You make one small bad decision, and just think “what the hell, I may as well keep going.” You eat one donut and forget about your diet. You text your ex once and think that you may as well text them twice. You smoke that one cigarette and then go buy a pack. One small bad decision ends up snowballing into a much bigger impact.

Being aware that you’re not making decisions in a vacuum is important to start making smarter decisions, but it doesn’t necessarily make it easier. That’s why it can help to use a more structured approach to make smarter decisions.

How to make smarter decisions

There are many frameworks for decision-making, but my favourite—maybe because of the simple acronym, but also because it’s grounded in common sense—is the DECIDE framework of decision-making. It was designed in 2008 by Professor Kristina Guo and it’s super simple to memorize and apply.

• Define the problem. Taking a step back to ensure you really understand the problem at hand should be the first priority when trying to make a decision.
• Establish the criteria. If you’re about to purchase a piece of software, what are the criteria? Is it price, great support, ease of use? List all the factors you want to consider before making a decision.
• Consider the alternatives. Try to spend the right amount of time on this step. Too much time spent considering all the alternatives can drive to overthinking and analysis paralysis. Just make sure you have done enough research to have a few solid alternatives.
• Identify the best alternative. Weight the list of criteria you have created in the second step, and rate each of the alternatives. Then, compute the result to see which alternative makes most sense based on your criteria.
• Develop and implement a plan of action. Time to act on that decision. Especially if you have a maximising thinking style, it’s important to force yourself to not go back to the previous steps and to move forward with the decision.
• Evaluate the solution. In order to make better decisions over time, examine the outcomes and the feedback you get.

This is just a framework. To be applied properly, you also need to create the right conditions to encourage smart decision-making.

Thinking clearly and logically takes time. Studies show that people are more likely to make risky choices under such time pressure. So if it’s an important decision you need to make, it can be worth pushing back to ensure you have enough time to consider the potential outcomes.

And remember that, ultimately, most of what we learn is through trial and error. Bad decisions can lead to good mistakes, provided that you take the time to reflect, learn, and adjust your trajectory accordingly.

👀 Tool of the Week

🤝 Brain Trust

If you enjoy the newsletter, you'll love our community of curious minds who grow together through interactive workshops and safe discussion spaces. Here is what we have planned next week:
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​• Did you miss our annual year-in-review workshop? You can watch the recording right here. I highly recommend taking one hour out of your busy schedule to complete the self-paced version using the recording. It’s an easy investment in your ambitions and well-being.​
• Want to finish your projects before the holiday break? Join one of our weekly co-working sessions. You'll have two hours of focused time to make progress on the tasks you've been putting off while enjoying the company of fellow community members.
​• Tired of new year resolutions that don't work? In January, I will host a nonlinear goal-setting session where you will learn how to replace those useless useless with personal experiments. We’ll use the scientific method and mindful productivity techniques so you can design your personal growth lab. RSVP.

All of these and future events are included in the price of the annual membership ($49), as well as access to the recordings of all our previous sessions and past cohort-based courses.

🌊 Brain Waves

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Thank you for reading, and take care!
Anne-Laure.

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