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

For any single decision, there are different ways the future could unfold—some better, some worse. When you make a decision, the decision makes certain paths possible (even if you don’t know where they lead) and others impossible. The decision you make determines which set of outcomes are possible and how likely each of those outcomes is. But it do

If a possible outcome unfolds, will your happiness increase or decrease? Will you gain or lose time? Will your social currency rise or fall? Will you gain or lose self-esteem? Will you make someone important to you happier or less happy? Anything we value can be the currency of a payoff, positive or negative.

Decisions where the cost to quit is manageable also give you an opportunity to gather information through innovation and experimentation. Amazon founder Jeff Bezos and Virgin Group founder Richard Branson include the concept of a “two-way-door” decision in their decision process. A two-way-door decision is, simply put, a decision where the cost to

When the outcome turns out poorly, it’s easy to focus on the details that suggest the decision process was poor. We think we are seeing the decision quality rationally because the bad process is obvious. But once the outcome is flipped, we discount or reinterpret the information about the decision quality because the outcome drives us to write a st

being “quitty” allows you to make better choices about when to be gritty.

Being more precise, by expressing probabilities as percentages, makes it more likely you’ll uncover information that can correct inaccuracies in your beliefs and broaden your knowledge.

When you make a decision, you can rarely guarantee a good outcome (or a bad one). Instead, the goal is to try to choose the option that will lead to the most favorable range of outcomes

Part of a good decision process includes asking yourself, “If I pick this option, what’s the cost of quitting?” The lower the cost of changing course in the future, the faster you can make your decision, since the option to quit lowers the impact by reducing opportunity cost.