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Five Principles for Making Smart Decisions

Guest post by: Renita Kalhorn

Article Overview: Every day we contemplate numerous decisions. Some decisions are simple, such as deciding which gym class to attend, while are other are life altering, for instance deciding on taking an overseas promotion. Regardless of level of importance, these decisions will have an impact on our lives. Studies have shown that the more choices we have, they harder it seems to make a decision. Making decisions doesn’t have to be a daunting task; there are step we can learn to make smart decisions.

Five Principles for Making Smart Decisions

Equinox Gym has 18 locations in New York City, and I have an all-access pass, which means I can go to any of them. This means planning my workouts each week becomes a logistical puzzle/nightmare. In addition to deciding which of my eight or nine regular classes I want to take, I also factor in whether one of my favorite instructors is teaching, travel time to the gym, proximity to a business meeting -- the permutations are mind-boggling. And on days that my brain is overloaded, I have been known to waffle over the choices until I have no choice but to scramble to the last available class of the day!

This is a pretty typical example, I think, of how our options in the information age have multiplied exponentially. More choice means more decisions: Who and when to marry, when or if to have children, whether to take the overseas job promotion, rent or buy, Mac or PC, sparkling or tap - the barrage of decisions we face can be overwhelming, to the point that we can't decide at all.

Have you heard about the famous jam study? In her book, The Art of Choosing, Columbia University professor Sheena Iyengar tells about the experiment she and her research assistants carried out at a local San Francisco supermarket. Posing as reps for Wilkin & Sons, they set up a table where they presented various jams for sampling. Periodically during the day, they switched between offering 24 flavors and six flavors; everyone who stopped by the table was given a $1 coupon.

Now, this wouldn't be the ‘famous jam study' if the results had been predictable. In fact, more of the people who had seen the small assortment -- 30% -- decided to buy jam. Only 3% of those who saw the larger assortment did. Even with something as basic as jam, people were more likely to buy when there were fewer choices.

Of course, not making a choice is also a decision. But decision by default rarely produces meaningful satisfaction. So, my gym quandaries aside, I'll share with you five principles that can help you actively make decisions more quickly and confidently:

Determine what's important to YOU. Too often, we try to make a decision without first getting clear on what we actually want. You may know very little about camera technology and still find yourself standing in front of the store display comparing megapixels, optical zoom, vibration reduction and countless other features that you didn't even know existed. That's backwards. First, determine what criteria are important to you (not the manufacturer, not the salesperson), and stop evaluating the ones that aren't.

Commit fully to your decision. Olympic fencer Jason Rogers says: "Indecision weakens your skills. Better to do the wrong thing with 100 percent of your effort than the right thing with 50 percent." How often do you play it safe rather than going all out? Although you may not risk getting poked in the eye with a sabre, a habit of tentative execution will steadily gnaw away at your confidence. And vice versa, strong conviction in your decision can very well compensate for any flaws in your reasoning. As Byron Katie says: "When we try to be safe, we live our lives being very, very careful; and we wind up having no lives."

Factor in human nature. The collapse of the financial markets in recent years demonstrated, on a large scale, the human propensity to take greater risk to avoid loss than to achieve gain. Laurie Santos, a psychology professor at Yale University, was curious to see if she could trace the roots of our irrational economic behavior and created an experiment in which she taught monkeys to use money and engage in marketplace trading. Turns out, monkeys also demonstrate loss aversion, just like humans. It's in our genes!

Elsewhere, humans are consistently inaccurate in their assessment of perceived vs. actual risk. As security technologist Bruce Schneier asserts: "People exaggerate spectacular but rare risks and downplay common risks. They worry more about earthquakes than they do about slipping on the bathroom floor, even though the latter kills far more people than the former. Similarly, terrorism causes far more anxiety than common street crime, even though the latter claims many more lives.

The take-home message: Knowing how our evolutionary tendencies can trip us up, we can compensate and consciously make smarter, more rewarding choices.

Make decisions from where you want to be. Consider this: Your best thinking got you where you are now. So if you want to improve an area of your life, you need to make different decisions. To start thinking like the person you want to be, adopt a role model (or two) -- someone whose achievements or behavior you admire. When you're feeling stymied, ask yourself: "What would [my role model] do?"

Make decisions quickly. Face it, you will never have complete information before making a decision. Three facts that can make it easier to take the plunge: First, it's easier to change the direction of a boat that's already moving - the sooner you take action, the sooner you can course-correct. Second, though no one enjoys making mistakes, that is where the most valuable learning is. Third, in his TED talk on what really makes us happy, Harvard psychologist Daniel Gilbert explains how, thanks to our "psychological immune system," we overestimate the effect that events - positive or negative -- will have on us. Likewise, the consequences of our decisions won't affect us as long or as much as we think.

The hallmark of successful people? They make more decisions.

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Article Tags: control, energy, flow, motivation, optimum performance, peak performance, recovery, resilience, stress



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