How to Decide

We all have those people in our lives who say “I told you so”—whether they told us so or not.

When you make a decision, there is stuff you know and stuff you don’t know.

One of the things you definitely don’t know is which of all the possible outcomes that could happen will be the one that actually happens.

The tendency to believe an event, after it occurs, was predictable or inevitable. It’s also been referred to as “knew-it-all-along” thinking or

HINDSIGHT BIAS The tendency to believe an event, after it occurs, was predictable or inevitable. It’s also been referred to as “knew-it-all-along” thinking

MEMORY CREEP When what you know after the fact creeps into your memory of what you knew before the fact.

Hindsight bias makes you feel like the outcome was much more predictable than it was.

the more you identify hindsight bias, especially by being mindful of the verbal and mental cues that accompany it, the better off you will be.

Hindsight bias is the tendency to believe that an outcome, after it occurs, was predictable or inevitable.

Once you know how a decision turns out, you can experience memory creep, where the stuff that reveals itself after the fact creeps into your memory of what you knew or was knowable before the decision.

The decision is what determines the set of possibilities, the paths that are possible.

Exploring those what-ifs is a reminder that you don’t have any control over when or where you were born, things that define the set of possibilities for your life.

It might feel good in the moment to accept your success without qualification or examination, but you’re going to lose out on so many learning opportunities by doing so. You’ll miss seeing the ways the outcome could have been even better. You’ll miss exploring whether a different decision might have increased the chances of the outcome you got.

The paradox of experience: Experience is necessary for learning, but individual experiences often interfere with learning. This is partly because of the biases that cause us to overfit outcomes and decision quality. Viewing the outcome that occurred in the context of other potential outcomes at the time of the decision can help to resolve this paradox.

The thing about the past is that you can’t change it. What you can do is apply what you learn from the past to all the new decisions you have yet to make by developing a repeatable process for better decision-making.

For past decisions, you’re reconstructing the decision while navigating your way through distortion-inducing biases. For new decisions, you’re looking into the future, which is inherently uncertain.

It is not that an outcome is never informative. It is that it is informative only when the outcome is unexpected, when you didn’t anticipate the result in the set of possibilities.

your decisions will only be as good as your ability to anticipate how they might turn out.

SIX STEPS TO BETTER DECISION-MAKING Step 1—Identify the reasonable set of possible outcomes. Step 2—Identify your preference using the payoff for each outcome—to what degree do you like or dislike each outcome, given your values? Step 3—Estimate the likelihood of each outcome unfolding. Step 4—Assess the relative likelihood of outcomes you like and dislike for the option under consideration. Step 5—Repeat Steps 1–4 for other options under consideration. Step 6—Compare the options to one another.

Advice can be an excellent decision tool as long as you are explicit about your goals and values when you are seeking that advice. Otherwise, you run the risk that the person whose advice you are seeking will assume you share their preferences and will answer accordingly.