Decide like a Pro
Bulletproof Your Decision-Making
Aristotle is credited with coining the sage phrase, “We are what we repeatedly do.” I would take it one step further. I have been a high-stakes poker pro for over a decade, making decisions worth thousands of dollars every couple of seconds for hours on end. I’ve realized that it is not just about what we repeatedly do—our success is rooted in how we repeatedly decide.
We make hundreds of decisions every single day. With that in mind, even a small upgrade to your decision-making skills will create a staggering difference in your long-term trajectory. And yet, most people don’t bother building those skills.
Need a nudge to shift your perspective? Consider powerful leaders in the modern world. Politicians, public company CEOs, generals, and fund managers are all decision specialists. Arguably, the world values decision-making skills above all others.
Just like great leaders, great decision-makers are not born, they are built.
I’m not a virtuoso musician, pro athlete, or a great chef. I am, however, a world-class decision-maker. My ability to consistently make great decisions is my alpha, my edge, and my defensible moat. It’s how I became one of the top online poker players in the world. It’s how I help CEOs scale companies and fund managers amplify portfolio performance as their executive performance coach.
When you begin to approach your decision-making systematically, the initial changes are subtle. However, like exercise or meditation, the effects will compound. With consistent application, you will overcome your biases and separate yourself from the herd.
Five Steps to Decide like a Pro
Over the years, I’ve developed a five-step system that effectively bulletproofed my decision-making. These five steps require an examination of your Hurdles, Options, Values, Assumptions, and Predictions. You can apply this five-step system to every single decision you make, whether it’s what to have for dinner or whom to marry.
Before we begin, three ground rules:
Have a personal or professional decision in mind and think about how these five steps apply to your decision. Be a participant, not a spectator.
Download my Decision-Making Canvas and go through the five steps yourself. Knowledge has no value without application.
Capture your thinking in a journal or notepad. This will maximize your ability to think critically and holistically and catch relevant details which might be overlooked. Also, this externalization creates an objective record of your actual thought-process, as you followed it, which you can return to later for the decision post-mortem.
1. Hurdles: Know when to move forward.
Decisiveness is as important as decision quality. This means making the best decision possible with the information available.
Opportunities don't last forever. If we wait until we are certain, many opportunities will pass us by. Thus, failures to decide are still decisions. Plus, by sitting on our hands, we forgo the valuable learning that comes from experience. Since it’s always easiest to course-correct a moving ship, it’s usually best to make your best guess and move on to the next decision.
After seeing clients struggle with indecision for years, I wanted a benchmark that told me when to continue reducing my uncertainty and when to just move forward. Luckily, this challenge was already solved by investors.
Hurdle rates are used as a litmus test for making investment decisions. If a project’s expected return exceeds the hurdle, or the minimum level of return required, the investment is made. If not, the project is a pass.
Select a hurdle and commit to deciding as soon as your hurdle is hit. What is the level of confidence (1–100%) you need to move forward with this decision?
I use a 70% hurdle as my default. This means that seven out of ten times, I expect to look back and be proud of how I made the decision. For very important decisions, a 90% hurdle may be more appropriate.
After each step of your decision-making process, ask yourself: how confident am I in this decision? Putting an actual number on your confidence level is the first step to generating action items.
Let’s say you are 60% confident but you have a hurdle of 70%.
What new information would increase your confidence by 10%?
What steps could you take to obtain that information?
2. Options: Generate alternative paths.
Many executives can lapse into thinking in terms of black and white. Also known as dichotomous thinking, this bias towards extremes impedes decision-making from the start, and should generally be avoided.
A client once asked me whether he should set out to build a billion-dollar business or sell all of his possessions and pursue enlightenment in an ashram in Myanmar. Upon reflection, neither actually fulfilled the client’s true desires. After brainstorming alternative options, he decided to start a lifestyle business which gave him ample flexibility to deepen his spiritual practices in parallel.
A good rule of thumb: Before deciding between two options, force yourself to identify at least three more.
One study found that, when forced to identify at least one additional option, 20% of participants ended up choosing one of the new options. This was an option that previously had not even been considered! Additionally, this subset of participants reported significantly higher levels of satisfaction with their decision after the fact.
Don’t fall prey to black-and-white thinking. Come up with as many options as you can before you evaluate those options. Afterward, you can remove any options which are dominated by alternatives.
Between two extremes, there always lies a middle path. If you give yourself permission to consider alternatives, you will likely discover a third option that contains many of the upsides but fewer of the risks and costs.
3. Values: Know what you are optimizing for most.
All decisions are forced tradeoffs between conflicting values. In my experience, most decision-making roadblocks are failures to resolve which value takes precedence. Moving forward requires a willingness to sacrifice the values we want in order to achieve the value we want most.
Let’s say you’re making a decision about where to live next. City 1 offers an increase in savings with a higher salary and/or a lower cost of living. City 2 offers more desirable cultural events and increased personal and professional networking opportunities. Which should you choose?
That depends. What do you value the most?
Financial freedom? City 1 is the clear choice. Fun and relationships? City 2 is your pick.
Before facing any decision, ask yourself: “What value am I optimizing for most?”. Once you decide what value is most important, every decision becomes a litmus test.
Put this principle into action with our Expected Value Calculator, the tool I use to clarify which value I am optimizing for most when making a critical decision.
Not sure what values are most important to you? Use our Top Values Worksheet to discover them for yourself.
4. Assumptions: Always be validating.
Every decision rests upon assumptions, our (typically unquestioned) beliefs about the current state of reality. This is dangerous. If these assumptions turn out to be false, the entire foundation of our decision-making is built on sand. As the saying goes: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
Here’s the key: There is one “crux” for every decision, the most critical assumption that, if changed, would alter the entire basis of the decision. This is the place where learning has the highest value. Any new information related to your crux has the highest chance of changing your decision.
First, identify the crux of your decision. Then, find the most efficient way to reduce your uncertainty around the crux to ensure your key assumption is valid and prevent yourself from making decisions on shaky ground.
For example, before you ask for a raise at Facebook, come armed to the conversation with comparables from Google or Amazon. Before surprising your new significant other on their birthday, check with their best friend to make sure they like surprises.
Many supporting assumptions turn out to be unfounded upon deeper examination. When you first develop this awareness, you will be surprised by just how often you try to fool yourself. (Surprise is just evolution’s way of rewarding us for noticing our own stupidity!) These moments of surprise are the breadcrumbs on the road from ignorance to wisdom. Embrace them.
5. Predictions: Prevent potential negative scenarios.
Humans are hard-wired to continually simulate and predict what is coming next. This ability for mental time travel is a source of untapped potential. Prospective hindsight, generating an explanation for a future event as if it had already happened, was shown to improve the identification of the cause of a future outcome by over 30%.
Take prospective hindsight one step further with a technique I call Murphy-Jitsu. Named after Murphy’s Law (“anything that can go wrong will go wrong”), Murphy-Jitsu visualizes future scenarios where my decision turns out poorly. By visualizing negative scenarios in the future, I can take steps in the present to prevent those scenarios from ever occurring.
How Murphy-Jitsu Works:
Visualize yourself in the future reflecting on your past decision and its outcome.
Write out three scenarios in story form, as detailed as possible, where your decision went horribly wrong.
For each negative scenario, brainstorm three potential causes of the failure.
Identify at least one way that each negative scenario could have been prevented or mitigated. Take those steps now.
How does taking those steps affect your simulation? Repeat steps 1–4 as necessary.
You know more about the future than you think you do. Murphy-Jitsu allows you to make mistakes in simulation rather than reality, saving yourself an incredible amount of time, headaches, and regret.
Conduct a Decision Post-Mortem
Decisions are like bodies. You can only perform a post-mortem after the fact, but it's best done while everything is still fresh.
Return to your original analysis (aren’t you glad you externalized it?) seven to thirty days after the decision to allow enough time for results to play out.
Conducting a Post-Mortem:
Hurdles
Were you overconfident? Underconfident?
How important was this decision? More/less than you expected?
Did you delay too long before deciding?
Options
Did you generate and fully consider alternative options?
For the options you didn’t choose, was there anything you missed?
Did you inflate potential upsides? Exaggerate potential downsides?
Values
What value did you optimize for most?
Is this value still is the most important to you?
Were there any factors that you overlooked?
Assumptions
What was the crux of your decision? Has your impression of the crux changed?
What steps did you take to validate this key assumption?
Have any assumptions been validated or invalidated since the decision was made?
Predictions
Did you overlook any possible negative scenarios?
Did any prevention steps taken affect the final outcome?
Could you have done anything else to ensure a positive outcome?
The post-mortem is how you ensure each outcome boils down to an actionable lesson.
Knowing what you know now, what are you going to do differently next time?
What went well with this decision? How can you replicate that?
What could have gone better? What could you do differently?
What lessons are you taking forward? How will you put them into practice?
Want to decide like a pro?
Regularly reflect on how you can become more rational, prescient, and self-aware. Then apply those lessons the next time around. Make mistakes, learn from them, try not to repeat them.