Level Up Your Decision-Making with Social Scientist Spencer Greenberg
Spencer Greenberg is a serial founder, mathematician, and social scientist, with a focus on improving human well-being. He is the founder of Uplift and Mind Ease, apps for helping people with anxiety and depression, as well as ClearerThinking.org which provides 40 tools and training programs to improve decision-making. He's also the founder of Spark Wave, a startup foundry that creates novel software products from scratch.
For Forcing Function Hour #8, Spencer joins Chris to discuss principles and techniques for improving our decision-making and reducing thinking biases.
See below for the video/audio recordings, resources mentioned, and conversation transcript.
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Resources and links mentioned:
The Forcing Function links:
Experiment Without Limits (peak performance workbook, free download)
Performance Assessment (quiz to reveal your greatest opportunity for growth)
To check out our previous Forcing Function Hour episodes, click here.
Topics:
(07:30) Probabilistic versus deterministic
(13:03) Prioritizing important decisions
(17:13) Prediction book and other tools for decision making
(41:41) De-risking the decision making process
(48:33) Dichotomous thinking and cognitive distortions
(54:42) Q&A
Podcast Transcript:
Note: transcript edited slightly for clarity.
Chris (00:05): Welcome to Forcing Function Hour, a conversation series exploring the boundaries of peak performance. Join me, Chris Sparks, as I interview elite performers to reveal principles, systems, and strategies for achieving a competitive edge in business. If you are an executive or investor ready to take yourself to the next level, download my workbook at experimentwithoutlimits.com. For all episodes and show notes, go to forcingfunctionhour.com.
Hello, hello, and welcome to the eighth edition of Lunch Hour. My name is Chris Sparks, I'm the founder of The Forcing Function, and I'm going to be your host and your emcee for today. For those of you guys who don't know, Lunch Hour is a conversation series where we explore the boundaries of performance. So if you are curious about reaching the next level in your performance, you have come to the right place.
So first, you might want to know, "What's Forcing Function?" At Forcing Function, we do what we call Executive Performance Training, where we teach executives and investors how to multiply their output, improve their decision-making, and perform at optimal levels. If you'd like to learn a little bit more about what we do, I'd point you to one of two places. First, we have our peak performance workbook, Experiment Without Limits. Ninety pages of my top recommendations that I use with my private clients, and how you can maximize your productivity and performance. You can download that for free at forcingfunction.com/workbook. Secondly, hey—there are so many ways that one could improve their performance. Where do I begin? Do I work on my planning, do I work on my routines, my habits? Do I try to improve my intention, my digital habits? There is generally one bottleneck that is most holding you back, and thus we created what we call the Performance Assessment, which will reveal that bottleneck for you. What is your biggest opportunity for growth? You can take that also for free at forcingfunction.com/assessment.
Now, you might be curious as well, how often do we do these Lunch Hours? We would love to have you guys return for a future one. This is a monthly event. We're considering increasing it to a bi-weekly cadence. But if you wanna stay in the know, we have a monthly newsletter where we share upcoming events, such as these Lunch Hours that bring speakers like Spencer. Previously we've had Tiago Forte, David Perell, Steve Schlafman, Khe Hy, Taylor Pearson . . . Many more to come. So you know, keep an eye on that newsletter. You can subscribe at forcingfunction.com/newsletter to stay in the know.
Now, Spencer is a very, very exciting guest for me. Spencer is a serial founder mathematician and social scientist with a focus on improving human well-being. And so a few things that Spencer has founded. First, his startup foundry Spark Wave, which creates novel software products from scratch. A couple of those software products include Uplift, which is an app that employs cognitive behavioral therapy to help people with depression, Mind Ease, an app that gives you exercises to help relieve your stress and anxiety, and finally and most relevant for today, clearthinking.org, which has forty tools and training programs that have been taken by hundreds of thousands of people to help improve their decision making.
Spencer writes pretty often on his website, spencergreenberg.com. I think he has a hundred essays by this point, which is pretty incredible, on how to think better, live a happier life. And super exciting announcement today, Spencer has just launched today, I think, his podcast "Clearer Thinking," with the initial ten episodes. So go ahead and check that out. We're going to put the links to all of those in the show notes.
Spencer and I met through a friend of ours, Kate Tolo. Shout out to Kate in New York City. We were both part of what we call the "rationality community." It's like one of these subcultures, if you remember our conversation with Taylor. Isn't the world great that there are people who come together who identify around, "How can we think better and live better lives by being more rational human beings?" Isn't it amazing?
Spencer threw outstanding events in New York which have now moved online. So if you have the opportunity to attend one of those, highly recommend it. In my view, Spencer's superpower is to translate the best findings from psychological science into actionable tools and frameworks, where we can now apply these findings and thus live better lives. And so today we have a very important topic, and thus there is no one who I would rather be having it with.
So real quick, what to expect today. The title for this conversation is, "The Sum of Your Decisions." So it seems that there are really two things that determine the course of your life. How lucky you are, and the quality of your decision making. Obviously only one of these is under your control, and thus your life trajectory is a direct sum of the decisions that you make, and thus our simple and small (reasonably small) goal is to help you transform the course of your life.
So you know, if you're listening, I would love to just pause with me. I'm gonna take a thirty-second pause to just think about a decision that you have right now, something that's pending for you, something that's top of mind, and as we talk today keeping this decision in mind. Think about, is this relevant? Is this something that can help me make a better decision? I'm just gonna give a thirty-second pause here.
Okay, good. Hopefully, you have your decision in mind. Logistical items. So the timeline for today, Spencer and I are going to be having a one-on-one conversation for about forty minutes. We're then going to hand it off to you for twenty minutes of Q&A with a wrap at 1:15 Eastern, or fifteen after the hour. So the chat is open. If you have anything you wanna share in terms of comments, ideas, resources related to our conversation, remember to change the chat to "All Attendees," so everyone can see it. We're going to be taking Q&A today via the Q&A function at the bottom of your screen. You can submit your questions through there. And I'm gonna be asking these questions on your behalf based on which questions are the most upvoted. So if you see something that sounds like an interesting question that you'd like to hear more about, upvote it so that it can get to the top.
Everyone's favorite question: "Hey, I have to leave early. Is this going to be recorded? When is it going to be sent out?" Yes. So we record all of these conversations. We also transcribe them in case you want to read them later. And we'll be sending these out to everyone who registered in an email on Monday.
So without further ado, I wanna hand things off to Spencer. Spencer, welcome. Thank you so much for being here.
Spencer (04:24): Thanks for having me. I'm really excited to be here.
Chris (04:27): Thanks, Spencer. I think a good place to start is, why should we improve our decision-making process? Why is it important, and is decision-making even something that we can improve?
Spencer (04:39): Yeah, well the way I look at it is I like to use a kind of embodied metaphor for this. Like, imagine that you're taking this long path and you're trying to get to the top of the mountain. Right? And the top of the mountain represents your goals. The decisions are all these branching points about how we're trying to get there. And you know, if you think about it from the point of view of this metaphor, obviously it's going to depend a lot on what decisions you make, whether you (A) get to the top of the mountain efficiently, or (B) whether you get there at all. Right? So we're constantly making decisions throughout our lives, and these basically determine whether we get the things we want, whether we are happy, whether we achieve our goals, and so on.
Chris (05:19): So, yeah. I mean I think it's important to start with this notion of process. So when we talk about improving decisions, we talk about improving our decision-making process. Now, I think this is particularly relevant right now. It seems to me that most people, including maybe some of these people who control our economy or run our country, seem to think that a good decision is a decision that turns out well, and a bad decision is a decision that doesn't turn out so well. I'm curious, could you share why is it important to focus on the process by which we make our decisions, rather than the outcomes of our decisions?
Spencer (05:59): Yeah. So, I'll say I think this topic is a little tricky, because the outcome of a decision does provide evidence for whether the decision was good or bad. Right? So for example, if I have a conversation and someone screams at me, the fact that they screamed at me is probably evidence that I did something wrong in that conversation. On the other hand, when we're dealing with an uncertain world where there are probabilistic outcomes, where even if we do things just right we sometimes will lose or fail—in those cases, the fact that there was a bad outcome doesn't necessarily mean that we made a bad decision. So I will just draw that distinction. It depends on how noisy the system is. So in a system where it's completely deterministic, if you have good input you get good output, then the outcome really does tell us whether we did a good job.
But much of life is not like that. Much of life is probabilistic, where even if you do everything right to the best of your ability, the outcome might not be good, and therefore when you're thinking about, "Did I make a good decision?" you have to evaluate it based on how you thought about the decision based on the information you had available, what strategies you used to make the decision. You can't just look at whether the decision turned out well.
I would just draw the distinction. In poker, for example, because poker is such a probabilistic game, my understanding is that at least some players have a rule of thumb that when you're discussing a hand, you're not even supposed to say how it turned out, whether you won or lost, because it's just a distraction from the more important thing, which is, "How did you think about making that decision?"
Chris (07:30): Yeah. That's a great way of putting it. So in the poker world, and I think in the world in general, I love the stoicism notion of you know, what's in your control, what's out of your control, that wisdom comes from knowing the difference. And in the case of discussing a strategy of a hand, for example, that because the results bias our thinking so much, it's better to just put that to the side and think about, well, what were we considering when we were making this decision? And that allows us to get to more interesting paths of inquiry as far as, well, "What was the information that was relevant? Was there anything that we might have missed?" And it just leads to much more productive modes of inquiry.
I would love to pull on this notion of probabilistic versus deterministic. So let's say that we are operating in a probabilistic world, which is most of the time, and we have a result. How do we take that result into account for future decision-making? Maybe pulling in some Bayesian notions here: is there a time that the result is more relevant than others?
Spencer (08:45): Yeah. I mean, so you can ask the question, "How likely would I be to get this outcome if my decision was the correct one versus if it wasn't?" And so if the probability of getting that outcome is only a little bit higher if your decision was bad than it is good, then that's not much evidence for your decision being bad. On the other hand, if you have a bad outcome and you consider, "Well, how likely would this bad outcome be to occur if I made a really bad decision compared to if I made a really good decision?" and it turns out there's a huge difference in that ratio, it's much, much more likely if you made a bad decision-making process, then that means that the outcome actually can tell you a lot about whether you did a good job.
And so that's kind of technical, but it's how you formalize the question of, "How much should you update your beliefs based on a bad outcome?" as opposed to, "Oh, I have a bad outcome but it doesn't really mean anything about my process." I also just wanna point out that in a lot of realistic situations, like let's say you're doing a work project or you're running a company or whatever, a lot of times it's almost impossible to be totally confident we're making the right decision. It's kind of fundamentally limited by the information we have available. And a lot of times, even shooting to be ninety-nine percent confident is not a good use of time, because it's so hard to achieve. So we might say, "Okay, for this decision I'm satisfied with being eighty percent confident," but that means I'm assuming twenty percent of the time the outcome is going to go against me. And that's fine. That actually could be optimal, because to go from eighty percent to ninety-nine percent confident might take way more time than is warranted by the importance of that decision.
Chris (10:25): Wow. That's so good. And a couple of things I want to pull on there. You know, first, I think illustrating the importance of calibrating ahead of time. This is something that I do a lot with my investor clients: "What's your conviction level on this trade?" Or even just with a morning routine. Let's say, you know, "Zero to a hundred, how confident are you that you're going to do your morning routine tomorrow?" And the cool thing is, once you've put a number on something, you know, how likely is the outcome, you can start to think about, "Well, what would change my perception of that outcome? Is there something I can do in the present to increase my likelihood, to increase my confidence?" And I think if I'm paraphrasing correctly, you're saying that, "Hey, if we think we're ninety-percent confident that something is going to go well and it goes well, that doesn't tell us all that much, but if we think at ninety percent it's going to go well and it goes really poorly, that's a much stronger indicator that we might have missed something and we wanna go back and see what we could have missed." Am I understanding that correctly?
Spencer (11:27): Yeah, yeah. And there's like a kind of more formal, technical version of that. But the gist is there are some situations where it going well or badly does not hinge that much on whether you made a good decision. For example, a good decision might mean you win sixty percent of the time, and a bad decision means you win forty percent of the time. That's not that big a difference, and so you can't learn that much from it going badly. In other situations, making a good decision you should win let's say ninety percent of the time and a bad decision you only win ten percent of the time, then the outcome actually tells you a lot about your decision-making process.
Chris (12:00): Well, and something else that you brought up that I thought was really cool is . . . You know, I think Bezos has really popularized this recently around Amazon, saying that, "Hey, if you're waiting for more than seventy percent of the information, you're waiting too long." Right? As you said, as your confidence level approaches a hundred percent, then that marginal information becomes more and more expensive, and just the concept that most decisions are pretty reversible and really don't matter all that much, that we tend to you know, make molehills out of mountains . . . Something I like to refer to as, it seems like many decisions are kind of, "Do I eat chicken for dinner or do I eat steak for dinner?" I mean, really the cost of not making a decision is more costly than you know, having one option over the other.
So, maybe, I would love to know how you think about how can we tell which decisions are important and which decisions aren't so important?
Spencer (13:03): Yeah, I think there are at least a few criteria we can look at. The one that you mentioned that's very important is reversibility. When a decision is easily reversible, we need to be much less confident that we're correct, because we can try it. If it goes badly we just reverse it. Okay. The cost is not that high. So that's one thing. The second thing is just how plausible is it that we can really get confident? So it's like, the cost of collecting information. If you're collecting information in an efficient way, you're going to first try to quickly get the information that gives you the most confidence. Then if you need more confidence you're going to try to get the next easiest information that's going to help boost your confidence, and so on. But if you're using this process of trying to get the easiest to collect information that's most useful first, you will get a diminishing marginal return. So every additional increment of confidence is going to become harder and harder to obtain.
And so for any given decision, there's going to be a tradeoff curve between like, okay, given how the difference between me making the correct decision and me making the wrong decision, and comparing that to how difficult it is to get additional information, that's going to change things a lot. And then of course there's just the factor of just how much is on the line. Right? Many decisions, there's just very little on the line. And so what I would say to people: I think a lot of people spend too much effort on decisions where there's not much on the line, but when there's a huge amount on the line, they don't put enough effort into it.
A simple example of this is that people might spend an hour deciding what movie to watch tonight, and also spend an hour deciding what mattress to buy. And if you think about that, the movie choice is going to affect two hours of your life. You know, okay, maybe you'll enjoy it somewhat more because you spent longer on it, but you're basically investing an hour to spend two hours. Right? The mattress you might have that for seven years or something, and actually, if you don't like your mattress that can be a huge pain, and maybe you're gonna sleep worse. And even if you sleep five percent worse, accumulated over many years, that's actually a pretty big deal. That's just one example to help illustrate how we sometimes get the amount of research just wildly wrong.
Then you know, even more so when it comes to something like, "Is this the right partner for me?" Right? If you think about how consequential that is. So you want to basically learn to flag the really consequential decisions and make sure to really invest in them, and on the other side you want to kind of notice when you're spinning your wheels on an unimportant decision and just say, "Okay, I'm going to give myself one more minute to decide, then I'm just gonna go with whatever I think's best after one minute.”
Chris (15:36): Yeah. Two things that you said there that I really like. First, recognizing that we mess it up on both ends, that we spend too much time on inconsequential decisions and not enough time on decisions that really matter, and so knowing which is which is critically important, because we tend to just average that out. It seems like a really good way of thinking about what are the decisions that are super consequential is how long are the consequences, the benefits or cost of this decision going to compound? So you know, the mattress that you're sleeping on every night for decades or the person that you're spending potentially your life with or the person that you are founding a company with or your career . . . These sort of things really deserve the extra time, because that one change cascades into a whole decision tree, a whole path of alternate realities that all lead back to that original genesis decision.
Something else that you said is like . . . It's one of my favorite recommendations is just to set a timer, as you said. You give yourself one minute to make the decision. Or one that I find a lot of fun is, for a while I traveled around with dice in my pocket, and so I would just roll a die, because something about the finality of it—“Well, whatever comes up, that's what I'm going to do”—allows me to just pick an option and move on. Is there anything like that that you've used for these relatively routine, you know, "Make a decision and move on"-type things?
Spencer (17:13): Yeah, that's a good question. Well, you know, I started thinking about this a lot when . . . I remember the first time I was really thinking about this was I was with a friend of mine who's a high-powered lawyer, she got a gift certificate as a present or something for a bookstore, and we were in the bookstore, and she spent like an hour and a half trying to decide what to spend this on, and was like really clearly not enjoying it, like she was stressing out over it, and I was like, "Do you know you make more money than this in ten minutes?" So that really made it visceral to me.
One thing I do, if I . . . Which I find helps, I don't know if everyone would find it helpful, but I use a system called Prediction Book where I actually predict how things will turn out, and I try to log in there whenever it's an important thing. So in addition to predicting which way it'll go, I actually predict the probability in there, and then it reminds me, sends me an email when I'm supposed to know the answer. I find that nice, because it kind of gives me a sense of how good I am at making predictions about things, and it gives me more trust in my decision-making processes. It's like, "Oh, you know, I'm ninety percent confident that this is the right thing to do," and because I've made enough of these predictions, I have a decent level of trust that that means it's probably going to happen. Whereas I think if you don't trust your processes because you're not at the point where you think, "Well, if I'm pretty confident this is probably right," it can actually send you spinning your wheels a lot longer.
Chris (18:40): Yeah. There's a similar exercise in the book How To Measure Anything, where given these types of events you know, how many apples can you fit inside of a 747, how many teacups would it take to reach the top of the Empire State Building type of things, and giving your ninety-percent confidence interval. Like, "Okay, it's between a thousand and a million apples" or something like that. "What's that range that you're ninety percent confident it's within that range?" And even people who consider themselves relatively math-oriented, they'll give a ninety-percent range and it only fits within that range like forty or fifty percent. And so recognizing that our baseline is to be way overconfident. But the interesting thing is, if you do this exercise multiple times, those ranges start to become more and more close, and your confidence level starts to line up pretty closely with what the actual range is, even if it's something you know nothing about. And I think what—
Spencer (19:43): We actually made a program to help train you in that.
Chris (19:46): Oh, there we go.
Spencer (19:47): Yeah, on clearerthinking.org. It's called, "Calibrate Your Judgment." And you can . . . We literally have thousands of practice cases where you can practice estimating your probability, and then you go find out whether you're right, and it gives you a score to help train you in like, "Well, is this a eighty percent or ninety percent or seventy percent?"
Chris (20:06): Awesome. Cool. We'll put that into the show notes. Yeah, just the notion that this is something that can be trained I think is really powerful, because once you've started to develop this confidence of like, "Hey, I'm generally pretty good at making these types of decisions," it reduces this hesitation, this delay, this fear of making a poor decision because you're able to trust yourself. I think this kind of relates to the concept of decision fatigue, right? This is something that's become popular in the media, right? Silicon Valley, wear a black shirt every day, or Barack Obama, wear the same suit. You have these routine decisions that we try to eliminate because of decision fatigue, we only have so many good decisions we can make in a day, thus we need to save our limited attention for those decisions. What do you think about decision fatigue? Is it a thing? Is there something where you're trying to eliminate routine decisions in your daily life?
Spencer (21:04): Well you know, it's funny because there was all this research on decision fatigue and ego depletion, like the idea that like, oh, if you have to exert willpower over and over again, such as making a long series of decisions, you know, you tend to have more and more problems the longer you do this. Now there's been this backlash, saying, "Well, maybe this research doesn't hold up as well as we thought." And you know, replication crisis in social science, and all this stuff. So you know, looking at that data it's a little bit hard to say what's going on. That being said, it's really clear that if you've ever had to make like forty decisions in a row, you just get frustrated at least. And annoyed. Anyone who plans a wedding has probably experienced this. At first you're enthusiastic, but by the time you're trying to pick, you know, "Do you want green or blue napkin rings?" at hour seven, you're probably pretty annoyed.
So, sorry. I do think that there's something real to that, and basically I think we have to really consider what decisions do we want to be making. And there's a couple different criteria there. One is obviously we want to be making the important decisions and not just leaving them up to a default, or something like that. But the other is sometimes we enjoy making certain types of decisions, and other types we hate making. So for example, there are some people who just love being stylish. They love wearing cool or interesting clothes or being creative in the way they dress, and those people probably should be choosing their outfit every day. It sparks joy for them, right? Other people just couldn't care less. You know, I'm in this category. You know, clothes are clothes. So for me I get very little value out of choosing, and so it's better just to only have items of clothing that I basically am fine with wearing and just grab one of them and make it super easy. So I think that's something that's important.
I would also say that another reason to kind of automate a decision or make it a default is if you have to exert willpower, and you find yourself often making the wrong decision. So an example of this, one thing I find helpful is just be like, "Every day for lunch, I'm gonna eat a salad, and that's just like what I eat for lunch. I don't make a decision about lunch." And that helps me eat healthier, whereas if I actually had to make that decision everyday, sometimes I might choose the healthy choice, and sometimes I might choose the less-healthy choice. Right? So I'm trying to actually remove the decision not just because it's fatiguing, but because I'm thinking about myself in the future and being like, "Well maybe I'm gonna crave something really unhealthy." Right? So I think that could be useful, too.
Chris (23:28): Yeah. I love the metaphor of choosing what to eat. It's something I talk about with clients all the time, as far as prioritization, and the contrast I give is, how likely are you going to be to make a really good decision if you go somewhere like The Cheesecake Factory, which has you know, who knows? A twenty-page menu. Versus you go to a specialty shop where, "Hey, we've been making ramen for a hundred years," or you go to a steakhouse that has "steak" in the name. "Okay, I'll probably get the steak." The more options you give yourself to choose from, the less likely you are to choose a good option. And thus a big part of making good decisions is immediately being able to eliminate decisions that are dominated.
It feels like to me a lot of this comes down to expected value: what are the values that we're using to make this decision? What's important to us right now? Is that something that you've thought about? How can we uncover these values that we're looking to optimize for, for a particular decision?
Spencer (24:37): Yeah. So I'm of the belief that humans have many what I'll call "intrinsic values." So these are things that we care about for their own sake, not merely as a means to an end. Just for example, most people care about their own pleasure. Right? And they also care about not suffering, for their own bodies. So I would say that's an intrinsic value, because if someone said to you, like, "Oh, sure, you got a lot of pleasure from that, but why do you care?" Right, that seems like such a weird question. "Why do I care? Because it's pleasure. That's why I care." You know, we care about pleasure for its own sake, not just because it gets us something else, right?
On the other hand, I think we have a lot of other intrinsic values that we don't necessarily think about as often but are just as important. Like for example, most people wanna believe true things and not believe false things. And they might be even willing to give up a slight amount of pleasure to like know a lot of true things about the world, or something like that. Most people care about other people's well-being as well. Like most people want their children to succeed and achieve their goals, right? Most people want people all around the world to at least be at some minimum level of well-being, and so on.
So we've tried to map out all of the different intrinsic values that people have. We ran a study where we gave people a little training module on "what is an intrinsic value," and then we had them submit their intrinsic values, and we ended up getting like three thousand submissions, and we went through them and tried to duplicate them, categorize them. We also looked at what philosophers say about the topic and psychologists and political scientists and so on. We ended up coming up with twenty-two categories of intrinsic values. You can actually find that on our website, clearerthinking.org. It's called the Intrinsic Values Test, and there's a cool infographic we made that shows the twenty-two categories.
Now, I should contrast this with what you might call instrumental values, which are things that you care about only as a means to an end, right? So for example, you might like having a chair in your house, but presumably you don't care about the chair for its own sake. You care about it because you can sit in it or because it looks nice or something like this. So most of the things that we value are actually instrumental. We don't care about them fundamentally, we just care about them because they get us something else. The intrinsic values are the things we're really trying to get deeply, right? Not merely as a means to an end.
So what I think about when it comes to decision-making is it's useful to know your own intrinsic values. Like, what do you fundamentally care about? And then your decision-making can be directed at trying to create more of the things you intrinsically value.
Chris (27:00): So, I can't help myself, I would love to know what are your intrinsic values, and how did that play into a recent decision that you made?
Spencer (27:13): Yeah, so my intrinsic values are . . . I have a bunch, I think most people have a bunch. But some of the big ones are the well-being of people all around the world, the well-being of the people I love specifically, which I treat as a different category, because like I would be willing to sacrifice the well-being of at least two other people to improve the well-being of someone I love. Right? I care about them, I love more than strangers, as almost everyone does. I care about my own well-being. So those are three well-being values. But I also have other values. So, for example, I have intrinsic values around like truth. I find it very odious to spread false information knowingly. I want to believe true things, not false things. I have some intrinsic value around equality. I would much prefer a world where there's a nice spread of well-being rather than just like one person is ridiculously . . . Has all the well-being, or something like that. A hypothetical scenario.
So, yeah. I have quite a few. When it comes to . . . I don't know if now is a good time to talk about specific decisions, good or bad decisions . . . Would you like to go into that?
Chris (28:21): Yeah, I think that would be great to illustrate.
Spencer (28:22): Okay, great. So Chris asked me to bring today one good decision I made, and one bad decision I made. I'll start with the bad decision first. And I'll also tie into intrinsic values. So I used to be involved in a company that I co-founded in the finance space, and basically I feel like I stuck with that company too long, and so I think a bad decision I made was just not leaving earlier. And when I think about my intrinsic value, it's like, "What do I really care about?" Like, one of the primary things I really care about is trying to spread well-being throughout the world, and I just don't think that in that company I was really had the ability to do that. Just based on the goal and mission of that organization, it just wasn't going to happen. And I think when I joined early on, I said things to myself like, "Well, I'm going to learn a lot. Maybe I can make money on it. Maybe I can build the connections." Like there are reasons to do it that are instrumental, but it wasn't really tapping my intrinsic values of like, "I'm actually helping to create a world that's a better world that I care about."
So I think that that . . . I don't necessarily regret being involved. I learned a ton. You know, and there were a lot of benefits to that. But on the other hand, I don't think that was a decision that I made really reflecting on my intrinsic values carefully. Especially the decision of staying longer than I could have. That was part of it. Another part of why I think that was not the best decision is I think I was suffering from the sunk cost fallacy. The sunk cost fallacy basically says that when you're trying to decide whether to stop doing a thing that you've already invested in, like invested time, money, effort, emotional energy, the funny human psychological quirk is that we can continue to feel as though we didn't waste this effort, time, money, et cetera as long as we keep doing the thing. Right? As long as you keep working on it you think, "Ah well, I haven't wasted that stuff." But as soon as you decide to give up on it, then you suddenly pay this really big psychological penalty of feeling like, "That was all a huge waste."
And what this does is it can produce an effect where even though the future of a project actually doesn't look promising, and you wouldn't pick up that project right now, if someone said, "Hey, do you wanna do this project?" you would not pick it up, you continue doing it because you don't want to take this psychological cost of like having accepted all that past stuff as a waste. However, of course if you think about it carefully, any past investment of time, money, energy, whatever, is already gone regardless of whether you keep moving forward or not. So you have to actually think of that as wasted or gone no matter what you do in the future, and then decide based on future.
So because I invested a lot of emotional energy and time and so on into this, I think I was more reluctant than I should have been to move on.
I think that a third thing that was going on there though, which is also really important, is that I was worried about letting people down and upsetting people. And I am agreeable personality. You know, I like people to be happy, I don't like people to be upset, and I think I have to be very careful because of my personality to not put myself in situations where I might do something just not to upset or let down other people if it's not like organically the thing that I think I should be doing. And so that also was something that held me back. And today, I work to be more assertive, but definitely it's something I'm still working on.
Chris (31:33): I really wanna dig into this sunk cost fallacy, because I think it underlies so many of our persisting bad decisions, where an original okay decision that becomes obvious that maybe it's not so good of a decision just keeps on persisting. And it seems like it ties into this human trait of we want to feel like we're good, and there's a huge pain of "I made a bad decision" that seems like it causes us to stay in the current context and actually look for reasons to justify why our decision was good. We see this all the time, where the research on buying a car increases after someone has already bought a car. They're looking for reasons why, "Hey, the car that I bought was a good car." You know, talking in the chat, the whole ritual of marriage is, "I've committed in front of all of my family and friends, and I've spent a large amount of money on a ring, to say hey, I am really, really committed to this person, and thus it's going to be really, really costly to back out of that." It's sort of using sunk cost as a societal mechanism to keep people committed and together.
And it also seems you know, say in the Twitter world or in the pundit world, that culturally we penalize people for changing their mind. Right? I forget who the person who said this is—"When the facts change, I change my mind. What do you do, sir?" type of thing—but that someone changing their mind is seen as a sign of weakness or that they don't actually know what's going on.
Personally, in our own decisions, how do we overcome this societal bias to commitment? How do we recognize when circumstances have changed or our own values have changed, and allow ourselves to change course? I think it's something that you've talked about, that a lot of making good decisions is just recognizing a decision point, that we have the ability to change course and make a different decision.
Spencer (33:52): Yeah. It's a really interesting one, because in theory we could be making decisions all the time, and yet our defaults are so strong, there's so many things that we've stopped making any form of decision about, we kind of forget that they even exist as decision points. Just to give you an example, and this is not something I recommend doing, if you have at least a few thousand dollars in your bank account, you could just move to Thailand tomorrow. Right? That is a thing that you could do. Well, I don't know about with COVID, but in general. So not saying you should do that, but the point is you're almost certainly not even considering that. You're almost certainly—that's not a decision point that you have awareness of. And I just want to illustrate that with almost anything in our lives, we could make more decisions about it. And so that raises the question, when should we? Like, should we think about moving to Thailand tomorrow or not?
And so when it comes to making personal life decisions, I think there's a couple criteria we can use for this. One is trying to always be aware what our biggest problem in life is. Because if something's one of your biggest problems in your life, then you should seriously consider adding more decision points around it. Right? For example, let's say you have a lot of depression. If you're experiencing a lot of depression, well, you should probably try to raise that to awareness, and say, "What are the decisions I can make around this? Should I go see a therapist? That might be a good idea. Should I download an app that might help me? Maybe that's a good idea. Should I go learn more about it? Maybe I could read a book? Maybe that's a good idea. Should I tell my friends about it that I trust and I think might be helpful?"
So the big problem in life, I think that's like one heuristic for like, "I need to go make more decisions about this thing." A second heuristic is just, "What something I've been doing for a long time that I haven't reconsidered?" You know, it's like, a fish in water. The fish doesn't notice the water is there because it's just so used to it. And this is a funny property of the human brain, that we notice contrast. If something is the same all the time, we just stop being aware of it. And you know, I've had funny experiences where like one day I'll notice there's something on the wall in my apartment, and I'm like, "How long was that there for? Was that there for a year and I just didn't notice it because I'm so used to walking by that spot that it's no longer in conscious awareness?"
So yeah, I think just trying to take these things that we just take fully for granted and just raise them every once in a while to awareness, be like, "Huh, that's interesting. I've been doing this thing for a long time. Let me think about that." The third heuristic that I think is useful here is thinking about what's going super well, and then just saying, "Hey, this thing is going really well right now. Is there a way I can double down on this or take advantage of this?" You know, it's like . . . I love, you know, for example, maybe you took up a new hobby and you're like, "Wow, that's really fun. I'm only doing it once a week, though. Maybe I should do it three times a week." You know what I mean? Just trying to find the bright spots.
Those are some things to think about. And this idea of defaults actually ties a lot into continuing projects, because you know, the sunk cost fallacy is basically not wanting to admit to ourselves or accept the loss of our past expenditure being wasted. That's just one reason we stick with a project that's not going well. There are other reasons, too. There are social reasons, which I mentioned, like we don't wanna let other people down. And to a certain extent it's good not to let other people down, but sometimes that can be a problem as well. But there's also just a default bias, where if we've been doing it for a while, we may not even think about not doing it anymore. There's a lot of things pointing in the same direction.
Chris (37:22): Yeah. Thank you for sharing that. Just a few things I want to build upon that I think are really, really apt. So first, the notion of, "Hey, there's something that is most holding you back, and if you recognize what that is, there's likely a decision point there." So I always refer to that as the bottleneck. What's the weakest link in the chain, or you know, what's something that keeps coming up that could be going better? There's likely something that you're missing. And being able to limit down the decision space helps to elevate some of those decision points. And when I get into my most guru-ey, I always say that everything reduces down to raising your awareness. Just the name, "Forcing Function," comes from the design concept of bringing to consciousness. Can you do something, just make yourself aware of the opportunity to do something different? In rationality, we refer to these as Ugh Fields, and that the more something has caused us pain in the past, the less that we want to look at them. Maybe we had an error on our taxes or a little bit past due on them, and thus anything that even makes us consider thinking about taxes, which branches off to personal finances, becomes something that we don't even want to look at or think about.
And so so much of the meta-skill of improving yourself is the ability to look at the void, to look at what's there, to reorient, to reality. You know, another thing from the rationality literature that I love is you know, in building software much of building software is fixing bugs. Things that the software is trying to do that it's not executing correctly. And another meta-skill is rewarding yourself for recognizing bugs in yourself, where if you notice that you take an action that, "Oh, that's really weird, why did I do that, that doesn't quite feel right," rather than to flinch from that, rewarding, "Oh, well everything's already going well, that's pretty cool that there's something that I could improve, this could go even better." Changing that initial reaction to, "Hey, this is something to reward. This is an opportunity for improvement," because as you said, there are so many things that we've just been doing as defaults for so long that we've cached those beliefs and we don't even look at them, and thus there's a decision debt that has accumulated, like this old code that we haven't looked at for a while, and thus it's full of bugs that we don't want to recognize.
But hey, like, our values shift over time. We learn more about ourselves and the world, and likely these are things that we might want to reexamine. And I think a lot of this, as you said, reduces down to double-down or stop. Something that's not going well, "All right, let's pause, take a hard look at it and see if there's a different course." Or the one that, as you said, is really ignored, is something is going really, really well. Well, that's a really amazing opportunity to double-down and see if there's anything more that can come out of that.
I'm curious. It seems a lot of this is at least subverted, or you reduce the length of time before looking at these areas of your life, by having a regular review process. Is this something that you believe in, that you do, where you sit down kind of regularly and look at different areas of your life?
Spencer (40:51): Yeah, it's super valuable to just have a periodic review, whether it's quarterly or even just once a year, and you look at the different domains, like relationships, work, finances, and just think about what's going well, what's going badly, what do I want to try to improve? And of course you know, realistically you're not going to be able to do everything on the list, you're going to have to triage it at the end of the day. But then maybe picking a few areas to work on to try to shoot for improvements on over the next quarter.
Chris (41:24): From a recent review that you did, was there something that comes to mind that came out of that that you recognized the decision point, you decided to do something differently?
Spencer (41:35): Yeah, that's a good question. I have to admit, I haven't been doing mine recently. So I wanna get back into it—
Chris (41:40): Well done for accountability.
Spencer (41:41): I have fallen off the wagon, I'm gonna cop there. But so one thing that I think about . . . Okay. So I think the ideal process, if we could do it, is actually to be reflecting on these important things much more often, but in smaller doses. So rather than wait to do a once-quarterly review, I think the optimal would be like . . . I have in my mind these important things, and I'm kind of reevaluating them in small snippets of time very often. So that is what I aspire to do. But the quarterly review is super valuable, especially as a bridge to eventually getting to the point where you're in a more constant review. So for me I try to always be on top of like, what are my few biggest problems in life, and then what are the opportunities that I'm seeing in front of me and I'm excited to pursue?
And actually, that may be a good segue into just talking about a decision that I think went well for me, where by that—
Chris (42:39): Yeah, absolutely.
Spencer (42:40): —I mean I made a good decision-making process. So recently I launched a podcast, as Chris mentioned previously. And I think that was a really good decision-making process. I actually don't know how it's going to go in terms of outcomes, because I just launched it literally yesterday, but I am very happy with it, and actually even if the outcome is not . . . Like, it becomes popular, I think I'm still gonna be happy with it. And so I just wanted to walk a little bit through why and what I think I did well.
So, first of all, there were a bunch of parts to starting a podcast that I had uncertainty around, and also a kind of Ugh Field of like, "Eh, I'm not really going to enjoy doing this. This is going to be a slog for me." And those are things around editing the audio, doing general like producer-type stuff . . . You know, like for example making a website for it, all that kind of stuff. And that went swimmingly, because I was able to collaborate with someone else on my team who was excited about doing that side of it, Josh Castle, who's my producer and editor. And so suddenly all the stuff that was nasty to me about doing a podcast, Josh was like, "Yeah, I'll do that, great." That division of labor, suddenly we were both happy doing our different parts. Already I like removed a bunch of the negatives right off the bat of doing the decision.
Before that, before I found Josh, I wasn't even sure that I was gonna start a podcast. It was just an idea. Okay. So then . . . I'm like, okay. Good, this is worth a try. But what does it mean to try? Like, how do I experiment in a way where I can get quick feedback? And so the first thing I did is I recorded three episodes. I didn't even buy a nice mic or anything at that point. I just recorded three episodes with friends. It was really easy and low-key. And I came up with an idea of what I thought I wanted the podcast to be, but it was really an experiment. After I recorded three episodes, I used . . . We actually make a platform called Positly, for recruiting people for studies and for feedback. So we then uploaded the three episodes and actually paid people small amounts of money to listen. We got seventy people to listen to the three episodes. And then we had them fill out a feedback form critiquing the podcast and saying what they didn't like about it, what they did like, how we could make it better, et cetera.
So now I had done three episodes, got seventy people's pieces of feedback. I'm like, "Oh, okay. Well, first of all, I see there's a bunch of room for improvement, and I have a pretty good idea of what that is." Second, I saw, you know what? Even in this rough form, people actually like this quite a lot. So I was like, "Okay, that's enough to move to stage two." So then I recorded six more episodes. So now I had nine episodes. I tried to improve based on the feedback. And then I got forty beta testers to listen to one or more of those nine episodes and do a second feedback round. And that helped me see am I getting better? What else do I not know? And also just having a more diverse set of episodes.
Okay. Now I had a hundred and ten people give me feedback. I was like, "Okay, this is really promising. I'm definitely gonna try this out. Okay. Now what?" Well, I started thinking, well, launching with my first episode ever recorded was probably not a great idea, because I had no idea what I was doing, I had never been a podcast host. So I actually wanted to record a bunch more episodes to find really strong ones that I could launch with.Then I went to pursue that. That worked really well, this like rapid feedback iterative cycle.
The last thing I think that went well with that whole process was that I wanted the podcast to feel fun and not like eating your vegetables. I wanted it to feel like dessert. So I purposefully chose a format at the intersection of what I thought people would want to hear and what I would have a lot of fun doing. Basically I modeled it on my favorite type of conversation, which is just a fun intellectual conversation with a really smart person where we discuss a bunch of different ideas. So each episode we do four or five ideas. For me, I was having a good time, and that also just changes it completely, because even if my podcast bombs and nobody listens to it, it will be like, "Wow, I just had thirty really fun and interesting conversations with interesting people." That's still a win.
So, trying to—basically de-risking it. That's the process I went through, and I felt quite good about that.
Chris (46:33): Yeah, thank you so much for sharing. I think it illustrates quite a bit where . . . If you wouldn't mind, maybe I can try to unpack a little bit of that.
Spencer (46:41): Yeah, sure.
Chris (46:42): So first, I love that you identify, "Hey, what's the crux, what's preventing me from taking action here?" It allowed you to identify this key assumption that you have, that creating a podcast is a big slog and something that I'm not going to enjoy. And that led to being able to run some cheap experiments on, "Hey, this is something that people are interested in," but also that there's someone who complements me who can take some of the aspects that I don't enjoy or don't particularly excel at off my plate, and thus it becomes less of a slog, and so you're saying, "Well, what could change that would change my opinion about starting a podcast, could make it more fun?" And so that was reflected in the format and the collaboration that you did, and the testing and the questions that you had, all geared towards changing this implicit belief driving the decision of, "Podcasts aren't fun," to, "Hey, podcasts are fun and I don't need to worry about how many people listen to it or what's going on, but I'm getting to have conversations that I enjoy with people that I enjoy talking to. And thus there really is no risk."
And what I think is really cool about that is that a lot of times with decision-making, at least for me, that fear acts as my compass. That there's something that I'm kind of interested in doing but I'm really afraid. Right? Am I going to like this? Is anyone going to show up? To try to see if I can defang or de-risk those fears, because in and of itself there's something that I'm interested in doing but really scares me, that is a really good indicator maybe that's a direction that I should explore more.
Spencer (48:30): Absolutely.
Chris (48:33): Cool. One more question for you Spencer, and then I have a couple in the Q&A. I wanna give other people the opportunity to hop in. Just a reminder, for those of you guys who are there, if you'd like to ask Spencer a question, you can use the Q&A function at the bottom, or upvote the other questions. My last question for you . . . I mean, I have so many, I could . . . Before we hand it off to the group, would be this notion of dichotomous thinking. So it's something that I've noticed when I talk to clients about making decisions that particularly . . . Maybe it's the type of clients that come to me. You know, you have these cognitive distortions of startup founders or investors where you need to be both contrarian and right. And so this tends to attract the kind of people who see the world in very black and white ways. You know, Steve Jobs famously was like, "This is either the greatest person that I've ever worked with or this guy sucks."
A recent example, a client I was talking to the other day, he was presenting to me: "Hey, I'm stuck between these two paths in my life. Should I try to build the unicorn, like a billion-dollar startup, or you know, I'm thinking about just selling all my possessions and going in a monastery and working on my meditation for a while." You have these complete opposite decision points, and it really reminds me of Buddhism, right? We talk about walking the middle path, that there's a way that transcends and reconciles this natural duality that we fall into, that everything is either black or white. And I know this is something that you've talked about before. I'm curious, how do we identify this middle path, this option that we weren't considering?
Spencer (50:20): Yeah. So it's funny, we actually ran a study related to this. We built a tool called Decision Advisor, which you can find on clearerthinking.org, that helps walk you through big life decisions. And in the process of building that tool, we ran some studies on it, and one study what we did is we randomized participants to either get a little thing saying, "Hey, often people don't generate enough options for their decision. Why don't you come up with some more options?" But we didn't make them do it. We just kind of suggested it. And I think if I remember correctly, none of them actually did it. Even though we suggested it to them. Now this is a small study, so take it with a grain of salt, but I think . . . Now, the other group we just said, "We're not going to let you move forward in this study until you generate at least one other option you haven't thought of." And every one of them did it, they all generated another option. And then when we looked at the end, after they'd gone through the whole Decision Adviser tool where they considered a decision from many different angles and they pick an option, about twenty percent of the group that we forced to generate another option actually ended up choosing the new option that they hadn't thought of before.
So that was super interesting, and you know, okay. It's a small study. But I think the general principle holds that very often there are more than two options, and yet very often we anchor on two. And so what I would say is for a small decision, no problem. Just stick with two. You know, "Do I watch this movie or that movie? Do I get carrots or mushrooms?" Whatever, fine. For a big life decision that a lot hangs in the balance, two is just not enough. Like you should really sit down and force yourself to generate more. And I recommend that when you generate them, don't evaluate them during the process of generating them, just come up with as many options as you can, then come back and then get rid of the junky ones after. But if you mix the kind of critiquing the options with the generation process, it tends to hold back your thinking.
So one of the classic ones that I've seen a lot is people are like, "Should I quit my job or should I stay with my job?" And it's possible that those are the only two options. But it's also possible that you could talk to your boss and say, "Hey, you know, I'm really interested in this topic, is it possible my role could change somewhat?" Or maybe there's a lateral transfer at your company. Or maybe your company offers moving down to part-time, and then you can do another job on top of it, or whatever.
I'm not saying that's available in your particular line of work, I'm just saying it might be, and it might be worth investigating. So very often there are other ways of thinking about your problem. It's probably not just two actual options.
Chris (52:46): Yeah. I thought that was really, really well put, of not mixing the generation of options with the choosing of options, or the thing about this is you don't write a first draft and try to edit that first draft at the same time. You want to brainstorm, "Hey, what are all the things that I could choose from? What's my menu of options?" And then you try to later, after you've exhausted yourself, it's generally beyond the point at which you think you can, right? So generate as many as you can, take a break, and then generate five more, that if you separate out this process and come back to it, "Okay, now that I have all the options, which one should I choose?" you'll generally make a much better decision, because you have all of the options available to you.
Spencer (53:28): Yeah. I'll just say that if you're trying to help someone else make a decision, I think there's a really key thing here as well, which is very often a friend will say, "Oh yeah, I'm trying to decide between A or B, what should I do, what do you think?" I find it super useful to step back for a sec and say, "Okay, those are potentially good options, but what are you trying to achieve? Let's talk about that first."
Chris (53:47): Yeah, yeah, yeah, yeah.
Spencer (53:49):And then once we talk about that, it becomes clear that there's actually C, and D, and E, and F, and you know, it might actually be worth including those in the conversation too.
Chris (53:59): Yeah. One question that I love there is, "Hey, imagine we're talking again in a year, and this has gone amazingly well. Describe that to me. You know, where are you? What's going on? What does that feel like?”
Spencer (54:12): That's a good one, yeah.
Chris (54:13): And just by creating those two different images where someone is now and where someone wants to be, not only are they able to kind of visualize what is that path from getting from A to B, but then also it starts to generate some of this creative tension around, well, "What are these things that I'm not doing now?" It takes it from a little bit away from this black and white and more towards, well, "What's a path towards what I want to achieve?"
Spence (54:41): Mm-hmm.
Chris (54:42): Got a question here from Julian. So Julian wants to know, how do you go about trusting your gut? So you know, there's a lot of fascination. How can we harvest our subconscious through our intuition, right? That the decision rests in this metaphorical place around your stomach. You know, so is intuition a thing? How do you know when you can trust it?
Spencer (55:10): Yeah, great question. I actually have a TEDx talk on this, so that's my complete answer, is watch my TEDx talk. But I will give you a quick recap. So first of all, the most common thing that I see is that people just think you should trust your gut. Like, if your gut tells you something, go with it. That's the most common mistake I see. The second most common mistake I see is that people ignore their gut and they think, "Ah, well your gut's not reliable, there's all these biases that are known, you should just think about this decision and make that, and your gut's just misleading you." Those are both—I just wanna make this really clear—those are both bad ways to make decisions.
The right way to make a decision, in my view, is to try to understand that (A) your guy always contains information, you should always be trying to get that information and use it in your decision-making process, and (B) try to understand when is your gut or intuition more reliable, and when is it less reliable, and trusting it different amounts. If you imagine your gut as kind of an expert, but it's not an expert in everything, right? It's an expert in some things. You'd better find out what it's an expert in, and what it sucks at, you know, in order to know whether to trust it.
So I have a simple framework that I created called the FIRE Framework. F-I-R-E. It's a quick guide to when to just go with your gut. Like when should you just say, "Okay, my gut says X, I'm gonna do X." Right? Versus when are you going to use reflective decision making. I'll talk in a moment what I mean by reflective decision making. So when should you go with your gut? When it's a Fast decision, right? It's like a car has just suddenly swerved at your car, and like you don't have time to think. You have to react. You have no choice. The second is an Irrelevant decision. You know, like, "Well, what should I get on my salad?" Doesn't matter. Just go with your gut. It's not worth thinking about. A Repetitious decision. You've made many decisions like this one in the past, but critically you also have to have gotten feedback on how they've turned out.
And I want you to use—my favorite visual metaphor for this is imagine you're doing archery, and you've got a bow and arrow and you're firing at a target. Okay? So you're firing an arrow, you see how close it is to the target, you adjust, you fire again, you adjust, you fire again. If you do that long enough, even if no one's teaching you, you'll gain some skill at archery. Right? Now imagine this same thing, but you are doing it blindfolded. You will never get good at archery. Your arrows will just go all over the place. You'll never learn to get better, because you'll never see if you had a good shot or what direction you need to adjust it, and so on.
Now, let's imagine something in between. Let's say you fire an arrow and for some reason you don't get to look for half an hour where it hit the target. Now here, hypothetically, you could learn, but think about how difficult it would be. You'd have to fire one arrow, wait half an hour, go check its position, try to remember, "What exactly was I doing with my body?", make some kind of slight tweak, right? So it's gonna slow it down a lot. The critical thing for Repetitious decisions is if you've made many decisions like this before, and you've gotten feedback on how they work, then you can trust your gut.
And the best example I know of this is like chess, right? I mean, you look at Magnus Carlsen play chess, he literally played a chess match against three pretty good players where he had about three or four seconds to make each move and they got much, much longer to make each move, and he beat all of them, and he was blindfolded during that time. It's because he's just played chess so much that his intuition is amazing.
And then, okay. The last type of decision, "E," Evolutionary. There's a small number of decision types where it's actually literally built into us: the same way a cat knows how to make certain types of decisions, we do as well. And they tend to be things that are very physical, like there's a sudden loud booming noise. Get the hell out of there. Maybe it's nothing, but you probably—it's not worth it, right? Just get out of there. Another example would be like there's some meat and it smells rancid. Don't eat it. You should not be using your reflective decision-making.
Okay. Last thing I want to say about this. What do I mean by 'reflective decision-making'? So let's say you don't go with your gut, because it's not a FIRE decision, right? Well, reflective decision-making is basically using your system-two working memory of consciousness, careful thought. But you should be using your intuition for its information. Right? It's not ignoring your intuition, it's saying, "Okay, I'm gonna really think this through and use my reflection. One of the things I'm gonna reflect on is like, what is my gut telling me, and is it . . . What information is that?"
For example, let's say you're thinking about giving a talk, and your gut's feeling really nervous about it. And then you can reflect: "Okay, why am I feeling nervous? Is it just because the idea of being in front of a bunch of people kinda spooks me? Well that, thank you, gut. I appreciate your input, but that's not a good reason not to give this talk." Right? Or maybe the gut actually has a point. Maybe there's something about this setting that actually is not a good thing for you and you should avoid it, right? So it's actually just about reflecting. What is your gut telling you, and why? All right, I'm done with that.
Chris (59:49): It's a great talk, by the way. Highly recommend it. And thanks for the executive summary. It makes me think of systems thinking. One of my favorite all-time articles, you know, “Leverage Points In A System,” or you see this illustrated in the sixties, there was this leaked document from the CIA where the CIA tried to infiltrate large corporations and sabotage them, and the best method the CIA found to sabotage corporations was to increase the delay between decisions being made and receiving feedback. So let's make committees as long as possible. Let's change numbers in the spreadsheet, or magically lose files. Anything we can do to increase the time between making a decision and receiving feedback for the decision. That's how you sabotage organizations that scale. It's something else that John Boyd has talked about with the OODA Loop, where if someone has a long delay between taking an action and receiving feedback from that action, they start to operate on an outdated map of reality, and their decision-making process becomes more and more divorced from that reality, and thus this idea you get inside this loop, that the decisions that they're making are based off of more and more incorrect information.
Cool. Two more, I think we got time for. So a quick rapid-fire one. I think on the Clearer Thinking site you guys must have dozens of decision biases that we must be aware of. Do you have a pet favorite decision bias that we must be particularly aware of?
Spencer (01:01:40): You know, one that's kind of close to my heart is overconfidence, 'cause I've done a bunch of studies of my own on this, and it's pretty fascinating the way that we tend to be overconfident in many things. But something that people don't realize about this is there's actually things that humans are systematically underconfident in.
So here's a fascinating one. Driving a car. This classic result that something like seventy percent of people will say they're above the median. Like, which is . . . That's mathematically impossible. It's not impossible for seventy percent of people to be above the mean, that's actually possible, but more than seventy percent think they're above the median, which is mathematically impossible. However, what if you say, "Driving a racecar"? Then a lot of people will . . . you're going to get an effect where the majority of people say they're below the median, which is fascinating. So what's going on there? It has something to do about the easiness of skills, and the subjectivity of skills. If a skill is really easy, it's one we do a lot, we tend to think we're good at it. Right? On the other hand, if a skill is more subjective . . . Like what does it mean to be good at driving? Does that mean you drive fast? Does that mean you don't break the law? There's a classic thing where sometimes men think women are bad drivers, but it turns out women get in way fewer accidents. So it's like, what is your definition of a bad driver exactly, because women actually on the objective measure are doing a lot better.
With these kind of easy subjective decisions, we tend to be more likely to think we're better than the median, but on these hard, more objective measures . . . racing a race car has a clear objective: get to the other side fastest. And then people are like, "Ah, I don't know if I can do that." So I think that's a fascinating one. With so many of these things there's a level one understanding, which is like, "Humans are overconfident." Then there's a level two understanding, which is like, "Actually, the world's complicated, and turns out we're often overconfident, but there are some exceptions, and the exceptions can be super fascinating to dig into."
Chris (01:03:37): Well, thanks. Final question for today comes in from Tom. This is one that comes up a lot with me from clients. Tom's saying, you know, right now, top of mind for me is clarifying what type of work goal that I want to set right now. Do I want to stay with my current employer? Do I want to change companies? Change roles? Do a side thing? So, how do you think broadly about these types of decisions where, "Hey, do I take a different role in another company? Do I pursue a full-time business?" I think this relates a little to the sunk cost fallacy. How should someone approach this type of major career change?
Spencer (01:04:16): Yeah. Well, there's a classic framework which is—although very classic—I think very useful, where you're trying to find work that's at the intersection of stuff you can get paid enough money for to support the kind of lifestyle you want, stuff you're good at, stuff you enjoy doing, and ideally stuff that gives you meaning. Right? And you imagine that four-way intersection of the Venn Diagram—if you can get those four things it tends to make for a really amazing career. Maybe you can only get three. Maybe you can only get two. But that's something to aspire to.
So that's one heuristic. Another heuristic that can be useful is just thinking about, "Am I learning the stuff that takes me to where I wanna eventually get?" Because I think it's very easy because of default bias and the many other factors to be in a job where we're kind of doing the same thing, and at first that's like a great learning opportunity, and then two years in we're not challenged anymore, we're not pushed to the edge of our ability, we're not learning new things. And so we're kind of stagnated. That's another heuristic. It doesn't mean you should—maybe you love that job. Maybe you want to be there the rest of your life. Fine. But if you don't wanna be there the rest of your life, and you're no longer learning, that's a bad sign. It means it might be time to think about either changing roles if you can, or maybe looking for other work that pushes you more.
Chris (01:05:33): Yeah. It's like the whole employment model is underpaying people who are underqualified, and they slowly but surely become overpaid and overqualified as they move up the learning curve. It’s a good thing to be aware of with anything that you've been persisting in: have you reached the point of diminishing returns? It’s a really good place to be aware of.
You know, Spencer, forgive me if I butcher the parameters of this experiment. One of my favorite experimental results is they had some people who were considering making a major life decision such as, "Should I change careers?" And what they had these people do was flip a coin. Heads you leave the job, tails you stay in the job. Right? Obviously completely random whether they do it or not. But what they found was that the people who got heads and left their job were far and away much more happier when they were asked afterwards if they had made the right decision. That being the key takeaway: if you are considering taking the leap, then you should almost always take the leap, and that on average you will be much happier having made the big decision to change rather than to persist in your current situation.
Spencer (01:06:53): Yeah. I think that's pretty accurate. I would just add a caveat, that these were people that were so conflicted that they literally were willing to take the bet of a coin.
Chris (01:07:02): Of course.
Spencer (01:07:03): Yeah, if you're at that point, yeah. Then it seems like you know, leaving seems to, on average, be better for people than staying. That being said, I would also say that's like a level-one model. There's better models, so I would advocate you use one of those. But for small decisions, you can flip a coin.
Chris (01:07:23): Yeah. It was one of the villains. Maybe it was Two-Face, or the guy from No Country For Old Men, where you flip the coin—not to see if it comes up heads or tails, but because when the coin is in the air, then you know which outcome you're rooting for. It's like, all of a sudden now you have something at stake. That's a kind of cool way to see, hey, which is the one that you're most inclined towards?
Spencer (01:07:44): Yeah. Flip a coin and see if you're really disappointed in which way it landed. That can give you some evidence, yeah.
Chris (01:07:50): Spencer, thank you so much for talking about decision-making today. I think it's such a critical topic, and I really respect and appreciate the work that you have done to translate these findings into things that people can do to implement into their own lives, and thus make better decisions and have better lives. Any final thoughts for today, anywhere you'd like to send people if they'd like to learn more?
Spencer (01:08:16): Well, if you're grappling with a big life decision, try our Decision Advisor tool. It walks you through the process of trying to make it somewhat easier and make it more systematic. So that would be my number one recommendation. Also on my blog, spencergreenberg.com, I wrote an article about how to make really hard decisions, and some people have found that useful. It talks about many different strategies, and so you can kind of then pick which one of those strategies seems appropriate for any particular case.
Chris (01:08:47): Thank you. Yeah. We'll make sure to link those in the show notes. For me this was Chris Sparks. Again, if you're interested in what we are doing, I encourage you to sign up for our monthly newsletter. You can also find all of the previous Lunch Hour episodes at forcingfunction.com/lunch-hour. And for all of these previous conversations we have both recording and the transcript. You can feel free to check those out. Those who are still here with us and want to check out this conversation again, we're gonna be sending an email to all of you on Monday, which will have a link to that recording and transcript. And if you have any questions for either Spencer or myself, related, you can just hit 'reply' in the email, and then make sure it gets to the right place. With that, we're going to sign off for the day. Thank you so much for being here, Spencer, and thank you guys so much for your great questions.
Spencer (01:10:23): Thank you, Chris. Great to have you out here.
Chris (01:10:54): See you all again next month.
Tasha (01:12:00): Thank you for listening to the Forcing Function Hour. At Forcing Function, we teach performance architecture. We work with a select group of twelve executives and investors to teach them how to multiply their output, perform at their peak, and design a life of freedom and purpose. Make sure to subscribe to Forcing Function Hour for more great episodes, or go to forcingfunctionhour.com to sign up for our newsletter so you can join us live.