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How to make good decisions

tutorial, general2 min read

Thinking Thinking in Public — Credits to MUTI

I'll cut straight to the point for this one. Let's talk about the 2 frameworks that I use to make good decisions (or rather, decisions that I won't regret)

Second-order thinking

When do I use this?

When you're struggling with a singular decision. For example: "Should I go to the gym today?" or "Should I quit my job and start my own business?".

Why do I need this?

Second-order thinking works by allowing you to see clearly the short and the long term effects of a particular decision.

Some decisions seem great in the short term, but a couple of years later can come back and bite you in the ass. I'm talking about that cigarette you decide to smoke because you are stressed out in the moment or the leaking roof that you decide to fix "later" because you are busy with something else.

Similarly, some other decisions can suck in the short term, but may eventually turn into great ones sometime in the future.

How it works

Start by writing down the decision you want to make on a piece of paper (some people do it all in their head, but personally I find it more comfortable writing it down), and then start asking yourself "And then what?". Below is an example of me making a decision on whether or not I should head to the gym today.

Second order thinking

And clearly the long term effects have a higher upside compared to the short term effects. Who doesn't want to have big biceps?

Decision Matrix

When do I use this?

When you're struggling with a decision that involves 2 or more options. "Should I cook, get McDonald's, or Nandos for dinner?", or "Should I use Zoom, Google Hangouts, or Skype for meetings?", and another one would be "Should I hire John, Sally, or Andrew as my Product Manager?".

Why do I need this?

There are so many factors that go into making a decision. A decision matrix helps you to lay out all the important factors clearly, and allows you to make a logical and informed decision.

How it works

Write down the decision that you want to make, and then identify the factors that you want to consider. Then draw a table which includes your different options, factors, and the weight of each factor. Let's decide between McDonald's, Nandos, and a home-cooked meal. In this particular example, the factors that are important to be are cost, speed, and taste. Decision Matrix #1

The next thing is to score them accordingly from a scale of 1-5. 1 being extremely negative, and 5 being extremely positive. If cost is a concern, and the cheaper the better, the cheapest option would have a score of 5. Decision Matrix #2

Now, not all factors carry the same weight. Some factors are more important than others. Again, let's assign a score to each factor, from 1-5. If speed is really important, then it should have a weight of 5. If the cost doesn't matter to you, then the cost will have a score of 1. Decision Matrix #3

And finally, let's tabulate everything, and see which one comes out on top. In this case, the ultimate winner is McDonald's! Guess who's having some McD for dinner tonight? Decision Matrix #3

Should I drink water? Wait let me do second-order thinking first...

Of course, you shouldn't always have to pull out one of these frameworks for every single decision, you have to make in your life. Sometimes when you have a strong intuition about something, you should trust it. And other times, it's a no-brainer decision, or a decision so insignificant that you will end up wasting valuable time doing Second-order thinking or Decision Matrix. Think of these as additional tools in your toolbox, and only pull it out when you need it.

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