B (3:39)

Well, thank you for having me, Mike.

A (3:41)

So, as I said, you could get the sense from all the books about the topic that we're not very good at decision making, that we're terrible at it. Are we terrible at it?

B (3:51)

Look, if we were really terrible at making decisions, our species wouldn't exist. The issue that we have is that we have all these ways that we make decisions that work. Most of the time, they're pretty good. The problem is that there's a whole set of circumstances under which they don't work, which would be true of kind of any rule of thumb. So there are certain heuristics that we use in order to make decisions. There are biases that we have in the decisions that we make that cause us to make poor decisions under certain and predictable circumstances.

A (4:31)

So I remember hearing once, and I always thought this was interesting, that in many cases it isn't so much what you decide as your commitment to your decision, that whatever you decide, if you commit to it rather than second guess it after the fact, that. That you'll be a lot happier and content.

B (4:50)

Yeah. So it's an interesting trade off. And B, I think it depends a little bit about what arena we're talking about. I think in general, for things like marriage, which is supposed to be a lifelong commitment, getting married and then immediately starting to second guess that would be bad for your happiness. I think that's absolutely true. So you definitely don't want to second guess things too much. I think that in general, like, you know, if you go to college and you're constantly second guessing your choice of college, for example, you're going to be less happy if you take a job and you're constantly second guessing the job that you take, you're going to be less happy. That being said, there's a flip side to that which is that we don't want the second guessing to go to zero. And the reason that we don't want that to go to zero is that we, when we choose to do something. So let's say we choose to take a job, right? Remember I said every decision is a forecast. We're choosing to take the job under conditions where we don't have a lot of information. We've done some interviews, we've researched the position and the company, talked to a few people who are there, gotten some vibes, and we decide to take the job. Right. But what do we really know about what it's going to be like when we're actually working there? We don't know a whole lot. So one of the things that we want to think about when we're entering into something is that that decision should not be treated as last and final. It should be the thing that I'm doing now, but I need to think about what are the signals that would tell me that this was a choice that I would prefer to change. In other words, we don't want to live a life where the first job we take is the last job that we ever do unless we happen to get fired from the job. We need to realize that we do have the option to quit, to change and go do other jobs. So you need to get a balance between committing to the thing you're doing, but also paying attention to the signals that that job might not be for you.

A (6:56)

It seems an important element in decision making that maybe doesn't get talked a lot about is timing. That you have to make a decision about something, but you also have a time limit because if the time expires, the decision doesn't matter. Some people take a long time to make decisions, other people make them quickly. What do you think in general?

B (7:18)

I think that people decide too slow. But stepping back from that, every decision is not created equal. And we need to understand what are the types of decisions that we should be taking our time on and what are the types of decisions that we can go pretty fast on. And if we can understand that, we can actually get to a better balance. So the types of decisions that we can go really fast on are ones where it's okay to make a mistake. And why are those two things connected? Well, because the faster that you make a decision, the more likely you're going to introduce error into the decision. So when you're making decision that isn't going to matter much to your happiness in the long run, that's when you should go Fast. So an example would be, and this is something that people often take a lot of time on is ordering off a menu. So, Mike, have you ever maybe you're somebody like this or do you know people like this, where you go to a restaurant and they're looking at the menu and it just takes them forever to decide what to eat?

A (8:19)

Drives me crazy.

B (8:20)

Right. Like, it's particularly bad if you're, you know, at like the Cheesecake Factory, which I think has like a 20 page menu or something.

A (8:28)

Exactly right.

B (8:29)

But even if you're, you're at a place with a relatively small menu, people tend to really, really struggle with that decision. And I think that part of the reason that people struggle with that decision is that pretty quickly after you order, you're going to get whatever it is you ordered and it's either going to be good or bad. And when it's bad, you're going to feel like you made a mistake. So what they're trying to do is to get to the right choice to avoid that feeling of, I made a mistake because I don't like my food. But of course, we have to remember every decision being a forecast, that first of all, there's no way for you to know whether your dish is going to be great or bad in advance of getting it. So you're just having, you're making your best guess. And if it turns out the chicken is dry, it doesn't mean you made a mistake. But more importantly, the reason why we shouldn't take a lot of time on that decision is because it doesn't really matter, not in the long run. So, like, Mike, I mean, I can ask you this. Like, let's say that we go to lunch and you order something and it turns out that you don't like your lunch very much. If I catch you a year later after we've had that meal, and I say to you, you know, hey, just catching up with you after a year. The last time I saw you was at that lunch a year ago, and you didn't really like it very much. How much did that meal affect your happiness over the course of this last year? None. Now, what if I see you a month later and I say, hey, it's been a month since we had that lunch. Like, how much did that lunch affect your happiness over the last month?

A (10:03)

Yeah, not much.

B (10:03)

No, not much. And even if I see you a week later, you've had 21 meals since then. In other words, it's just a decision that makes no difference. Right. Like, we feel it really keenly in the moment, but it's actually very low impact. So what we want to think about when we're deciding, like when should we take our time versus when should we go fast? Is not this fear of getting a bad outcome and feeling like you made a mistake. It's, is it something that's going to matter? Because if it's not going to matter, it doesn't really matter if I got a bad meal. So we should be thinking about impact. So that's sort of piece number one is that most of the decisions that we make are actually pretty low impact. They don't. They're not really going to have high effect on, like, our overall happiness over the course of our lives. They're pretty low impact. So just go fast on those things, on the things that are high impact. Like, you know, the way the, the, the thing that I like to think about, are you dating or are you marrying? Right? If you have a bad date, it's not a big deal. If you have a bad marriage, it is, right? Are you hiring an intern? Are you hiring a cfo? If you hire an intern who doesn't work out very well, so what if you hire a CFO that doesn't work out very well, that's a really big deal, right? So, like, whenever you're in this sort of dating category or the intern category, just go fast, it doesn't really matter. But when you're in that CFO or marriage category, those are rarer decisions. That's when you should actually slow down.

A (11:32)

We're talking about decisions we make and why we spend a lot of time on making decisions that don't really matter much. My guest is Andy Duke and she's author of the book how to Simple Tools for Making Better Choices.

B (11:47)

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A (12:19)

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B (14:05)

Yeah. So first of all, one of the problems that we have as decision makers and it kind of goes back to that idea, you know, when I said the thing that's really hard for people when they're ordering from a menu is that they're afraid that the meal's going to be bad. One of the biases that we have is called loss aversion. And what that means is that when you're imagining the possibilities that are going to occur in the future, you tend to be more focused on the bad things that can happen than the good things. And when you get more focused on the bad things that happen, you can see how that would cause paralysis. Right. Like this very slow decision making because you're so concerned about quote unquote getting the decision. Right. So that's one piece of that imagining of the future. Look, here's the fact is that when we're making decisions at the moment that we make decisions, the decision we know very little in comparison to all there is to be known. That's just the state of being human. And there's going to be an influence of luck on the outcome. So even in the situation where we know everything we need to know, like we have a coin and we've weighed it and we know that it's going to land heads 50% of the time and tails 50% of the time on a Single flip, we still don't know what's going to land right, because that, that's just under the influence of luck. But because we know very little in comparison to all there is to be known, we actually don't even know if the coin is two sided. Right. We don't know if it's a fair coin. Maybe, maybe it's not a fair coin. Maybe it's got three sides or four sides. Right. Like we're sort of guessing at those kinds of things. So you're right. When we're imagining the different outcomes that could occur, generally depending on how much luck is involved, depending on whatever sort of our informational state is, there's going to be a range of possible outcomes that could occur and each of those outcomes is going to have some probability associated with it. But we're only ever going to observe one of those outcomes, which means that most of the outcomes that we're imagining aren't going to happen. And that's going to be more true the farther out into the future that you go. So if I'm trying to predict something that's going to happen in the next minute, I'm probably going to be pretty good at that. If I'm trying to predict something that's going to happen in a year or two years, most of the things that I'm guessing at aren't going to occur because there's such a big range of things that could occur as you get farther out into the future. But what's really important though is that doesn't mean that you shouldn't try to predict because you should. You should try to predict because you still have to make a decision that's your best guess. The important thing is I make a decision that's my best guess about all the things that might happen, say in a year. But then as I accumulate more information, then I will change my guess because eventually that thing that I was thinking about that might occur in a year is only going to be a week away, right? Like, you know, as I get out, you know, 51 weeks into the future, it will only be a week away, at which point I should be updating what my prediction was. But that's just, you know, the state of being human. But it doesn't mean that you shouldn't be trying to forecast what those outcomes are because it's still going to make you a better decision maker.

A (17:28)

But it seems that also that your temperament has something to do with what those outcomes are. That if you're a pessimist, you're going to be looking at the, you know, the worst case scenario, if you're an optimist, you're going to be that everything works out, it doesn't really matter.

B (17:44)

Oh, absolutely. So, you know, with loss aversion, people tend to focus on the downside. They tend to focus on like those bad outcomes that might occur. Obviously there's also the other problem, which is people tend to be overconfident and overly optimistic. So we, we will often estimate our chances of success as much higher. We know that that's a problem as well. So overconfidence is just a really huge problem. Both of the problems, if we're sort of in the pessimistic side where we're really just think, you know, we're really just focused on the downside outcomes that could occur, or we're, you know, overly optimistic or overconfident, or where we're really overestimating the chances that good things can happen, it's gonna mess our forecasts up. So whichever bias you're subject to, you actually wanna get a better view of what the world might hold for you. And one of the best ways to do that is to get somebody else's opinion. So we're subject to these biases where we might overestimate the chances of good stuff happening, or we might be particularly risk averse and afraid of the bad things that are happening. But those are biases that we have for and our own decisions. So one of the best things that you can do is go find yourself a mentor or someone to help you out and sort of explain what the decision is that you're facing and ask them what they think the possible outcomes are and what options they think that you should be considering because they'll generally see the world more clearly than you see yourself. There's just all sorts of evidence that shows when you look at people giving other people advice, the quality of the advice that they give to other people is much higher than the sort of what we consider the quality of the advice that you give to yourself. So we should be seeking out people to give us advice to help with the advice that we're giving ourselves.

A (19:38)

Well, I mean, that is so apparent when you look at somebody who's struggling with a decision, struggling with a problem, and to you the answer's so clear. But when you have something similar, that same kind of problem, you struggle as much as they did because it's you, it's your, it's you on the line.

B (19:59)

Yeah. And there's recent research that actually shows that when people are Struggling with a really hard decision. If you have them go give advice to somebody else who's struggling with the same decision, it helps them with their own decision. There's something about, as you just said, like giving advice to somebody else, it's not your struggle anymore and that allows you to see it so much more clearly.

A (20:22)

You know, I can think of decisions I've made and I'm sure other people have this experience that at the time you're making the decision, you think like, this is it, like there's no going back. But so many of the decisions that we make, we can undo them later if they didn't turn out right. Right.

B (20:42)

You know, once we start something, we think that stopping it is like a failure. It's a sign of being weak willed. Like, we all know that grit is a sign of character and we should stick it out and show our mettle. Right. We should be courageous and keep going. But there's so much science that shows that we don't quit things soon enough. And I think that one of the ways that I can get at that, Mike, is like, think about some big decisions that you've made where you did finally quit something. As you think about that set of decisions, would you say that for the most part after you finally quit, you think, oh, I should have done that a lot earlier, or for the most part, do you think, woo, I did that too soon?

A (21:31)

Oh, I would say, you know, wish I'd done that earlier.

B (21:35)

Right. And I think that that's true for most people is that we feel like, oh, I wish I had done that earlier. And I think the problem is that kind of, to the point of what we were talking about before, about wanting to get to that certainty before you're willing to make a decision, is that once we start things, we don't want to quit unless we're certain that we have to. Because it does feel like such a failure to us to actually walk away from something that we don't want to walk away from it unless we know that we didn't have any other choice. But if we didn't have any other choice, that's way past the point that you should have walked away. So I think that people need to get better at saying, like, look, when I make a decision to start something, I'm giving it my best guess as to whether I'm going to like this job, for example. But then after I've started the job, there's all sorts of signals that could happen that would show me that this isn't the job. For me. You know, my boss could be toxic, or the hours might not be good, or people are emailing me constantly on Sunday, and that's not really what I wanted in a job. And I didn't think that that was going to be the case. But now that I've discovered it, it's okay for me to leave.

A (22:44)

Well, as I listen to you talk, I can think of several decisions, many decisions that I've made in my life that seemed really so important at the time but have had no lasting effect on my life or my happiness or anything. And I think that's so important to keep in mind that so many of the decisions that we make that we agonize over just don't really matter that much. I've been speaking with Annie Duke. She is a speaker and consultant on the topic of decision making. She's a former professional poker player and author of the book how to Simple Tools for Making Better Choices. And there's a link to her book at Amazon in the show notes. Thanks, Annie. Appreciate you coming on.

B (23:27)

Thanks, Mike. This has been super fun. Really happy that you had me on.