• Ozzie Paez

Decisions and mental shortcuts

THIS POST was first published in April 2012. It's been updated to include new lessons and research in the science and craft of decision-making.


People make millions of decisions in an average lifetime. We would be drained of time and energy if we had to analyze and score every situation and problem before exercising each choice and making each decision. Thankfully, evolution gifted our brains with the ability to take shortcuts that usually serve us well, i.e. heuristics or rule-of-thumb decision-making. The heuristic strategy employs non-optimal, practical methods (usually based on previous experiences) to quickly perform good-enough analyses to find good-enough solutions and make good-enough decisions – And just to make sure we don’t get mired in indecision, our brains trick us into believing that we were more thoughtful and rational than we actually were.

The brain's cognitive roadmap includes shortcuts that are indispensable to decision-making but are also susceptible to predictable inference errors that can lead to poor judgment and risky decisions.


Unfortunately, this indispensable decision-making strategy often leads us to predictable mistakes in judgement; human inference and human error go hand-in-hand.1 It’s a trade-off that neuroscientists Sandra Aamodt and Sam Wang described in Welcome to Your Brain: “Your brain lies to you a lot. We’re sorry to have to break the news to you, but it’s true… Your brain doesn’t intend to lie to you, of course. For the most part, it’s doing a great job, working hard to help you survive and accomplish your goals in a complicated world. But because you often have to react quickly to emergencies and opportunities alike, your brain usually aims to get a half-assed answer in a hurry rather than a perfect answer that takes a while to figure out… Your brain’s lies are in your best interest—most of the time—but they also lead to predictable mistakes.”2

That last sentence encapsulates our shared dilemma in making good decisions. We must rely on heuristics for most decisions but must also be aware of the risks they introduce. A key barrier in this delicate dance is our brain’s limited self-awareness, which often blinds us to our analytical and decision-making approach. Research suggests that, for the most part, we simply can’t tell what our brain is up to; or as Aamodt and Wang put it, “Even when your brain is doing essential and difficult stuff, you’re not aware of most of what’s going on.”3

We can still master decision-making despite our brain’s limited self-awareness and reliance on heuristics to save time and effort. The key is to recognize and match the best strategy to different problems and situations. Specifically, we should avoid using heuristics to make important decisions with long term implications when there is time to apply more formal methods. Similarly, in organizations suffering from analysis-paralysis, executives, managers, and staff can learn to better leverage experience and lessons learned to make faster good-enough decisions.

Improving decision-making is an on-going process, not an event. It includes improving how decision-making strategies are selected and applied. Mastery takes effort, but the returns more than justify the investment. Few initiatives can match it in delivering lasting, sustainable improvements in performance and outcomes. In this context, decision-making is a well-known and often overlooked competitive differentiator.

How are smart technologies like Artificial Intelligence affecting how we select and apply decision-making strategies? That’s the subject of my next decision-making post.


References


[1] Nisbett, Richard; Ross, Lee. Human Inference: Strategies and Shortcomings of Social Judgment. Prentice-Hall, 1980, page 3.


[2] Aamodt, Sandra; Wang, Sam. Welcome to Your Brain: Why You Lose Your Car Keys But Never Forget How to Drive and Other Puzzles of Everyday Life. Bloomsbury, 2010, Nook edition, page 6.


[3] Ibid.