4 Key Decision-Making Practices

According to some sources, the average person makes an incredible 35,000 choices per day.  Optimistically, let’s assume we get 8 hours of sleep each night. This statistic suggests we make an average of nearly 2200 decisions each hour we’re awake!  Whether or not we believe this figure, there is no doubt that our modern world constantly presents us with many choices.  Thankfully most of these choices are made without much effort.  But what about life’s bigger decisions?  What are some key decision-making practices that can help us make better decisions in our personal life?

This isn’t a call to overly complicate our lives by over processing decision making.  Maybe only a dozen or so of the decisions we make in a year might benefit from some additional intentionality.  The other 99.9999% are going to be ok without any more assistance.  When deciding between wheat and sourdough bread for our turkey, green chili and cheese sandwich is probably best left to our gut (by the way, sourdough is the right choice).  Let’s examine these key decision-making practices, some of which are borrowed from the world of business. 

1. Involve only the right people
2. Structure the decision
3. Research and leverage data where it makes sense
4. Create time and space

1. Involve only the right people

There’s a saying that suggests opinions are like a certain part of the human anatomy – we all have them.  Opinions from others can be helpful.  They can also cause confusion, emotional responses and bad decision making.  A business decision might be mapped using a model known as RACI (Responsible-Accountable-Consulted-Informed) in order to be clear on the roles of those involved in a particular decision.  This may seem like overkill for all but the biggest of the decisions we make in life.  However, clearly aligning with those people who will be impacted most by a big life decision can be useful. 

As an example, let’s say we are considering moving our family.  No one would argue that this doesn’t represent an important, life-changing decision.  We may be tempted to solicit the opinion of a great many people including extended family, friends, co-workers, neighbors, etc.  Or we may be tempted to tell no one until the decision is made.  The important thing is to align with our co-decision maker(s) on our approach; and the roles people important to us will play in making that decision. 

What if our spouse/partner believes that their parents should be consulted throughout the decision-making process, their opinions helping to guide our choice? But, we believe that they should only be informed at key points along the way?  What role(s) do we expect our children to play and are we all aligned on those roles?  Are we even clear that both spouses/partners share the accountability for making the decision in the first place?  Communicating our thoughts and writing down our agreements up front can spare us pain later.  Of all the decision-making practices posed here, this one may make us the most uncomfortable to put into practice.     

2. Structure the decision

Many of our big life decisions come down to one or two options.  Move to another city or don’t.  Adopt a child or stay with the current family composition.  Retire now or delay retirement and keep working.  For big, binary choices like these, most of us complete at least a mental accounting of the “pros and cons” as criteria to help us make the decision.  It is a good idea to get these thoughts down on paper, especially if we share accountability and responsibility for making a big decision. We likely have different ideas on what criteria should be used.  Even if some of the criteria are similar, we will almost certainly assign different importance to the individual criterion.  How can we work through this challenge?

Let’s revisit the “to move or not to move” decision example. Both decision makers should list out all of the criteria important to them. For example, let’s say the first decision maker highly values being close to family and friends, having a high quality school district and being part of an engaging and welcoming community. The second decision maker is most interested in advancing their career, improving the financial situation for the family, and having a high quality school district for the children.

The decision makers compile a single list of criteria, after accounting for duplicates.  Independently, both decision makers then rank each criterion in order – assigning the most points to the highest ranked and the least to the lowest ranked. The independent lists are recombined to arrive at a single rank-ordered set of criteria.   

RACI in Practice

 Structuring a big decision in this way won’t prevent disagreement.  But it can make our respective thinking into a visible format and create the basis for more discussion, more pros and cons assessment, and finally making the decision.  At this point we’ve only framed the criteria we’ll use to make the decision – now we need to find and incorporate the right information to apply to criteria.

3. Research and leverage data where it makes sense

Today we can find information on nearly any conceivable topic.  The internet allows us to conduct research in a way that wasn’t possible twenty-five years ago.  Information sources are plentiful…maybe too plentiful.  It’s a good decision-making practice to make sure we feel comfortable with the sources we use to evaluate our decision-making criteria.  The credibility of our information sources may be even more important than the actual details of the information we find.  If we find ratings and reviews online, are there enough of them to make outlier opinions less impactful?  Do we really trust our friend’s third cousin’s wife anecdote?  Can we recognize the news outlet that wrote an article on a topic we’re researching?  

Another challenge we should recognize and mitigate for during our research is confirmation bias.  Confirmation bias is the human tendency to seek out and interpret information that supports a view we already hold or favor.  Obviously, gut instinct plays an important role in the decisions we make.  We should just be aware that our preconceived notions can influence us in ways that are not overt.

Use data…where it makes sense

Leveraging data as one of our decision-making practices can be helpful in making a big decision.  Proper data analysis can help mitigate confirmation bias and enable realistic comparisons. We should be able to survey home prices and availability in an area we are considering moving to.  We can calculate the distance and time required to visit family and friends.  Modeling can be done on our budget will look like if we move. 

With this said, not every criterion can be quantified.  What value do we place on the quality of our current social network vs the once we might be moving into?  If the climate in our prospective new home is great during Spring and Autumn but rough in the Summer and Winter, is that better or worse than our current hometown climate?  We should also resist the temptation to force data analytics where it doesn’t belong.  Some of our criteria will need to be assessed using subjective measures.

When evaluating our criteria using data analysis, we should also seek to avoid the fallacy of sunk costs.  A sunk cost is when we invest money, effort, or time into an endeavor.  The fallacy is that these past investments should be used in making a future decision.  For example, let’s say we travel to the place where we are considering moving to evaluate schools.  We decide to put down a non-refundable deposit at a school we like to ensure that our child will have a place in the next school year.  The travel, time and money required to make this deposit are sunk costs.  It would not be useful to overweight these costs in our overall decision-making process.  If the evaluation of our criteria suggests that the best decision is to abandon these sunk costs, so be it. 

4. Create time and space

How long should we take to make a life-changing decision?  A week?  A month?  Years?  Likely there is no answer that makes sense for everyone, across all decisions.  To make a big decision under duress, like moving our family, probably won’t make us or our family feel very comfortable.  It may be necessary, and the outcome may turn out to be fantastic.  But the experience is likely to feel stressful for all involved.  Likewise, taking a long time to make a decision, even a big one, can be agonizing for all stakeholders.  To the extent possible, we should create a timeline that allows space in our busy lives to make a well-considered choice, without letting the process drag out and the decision makers get stressed out.      

If we believe that the first 3 decision-making practices are beneficial, then we ought to invest enough time to set ourselves up for a successful choice.  Good and bad outcomes can result from the same decision-making process.  What we hope to be able to achieve, is that in the end we feel confident in the preparation we put into making a big decision and thus are confident in the decision.  Life won’t always deal us the perfect hand.  However, we can make the most out of the time we do have by being honest about how our choice will be made.  Regret is a pointless emotion.  It won’t help us achieve our plan.  We can’t control ALL the outcomes, but we can control how we approach big decisions we all must make on this journey.

Thank you for deciding to read this post today.  Only 34,999 more decisions to go…for today!

Written by: A. Reed Reviewed by: B. Holman