Lots of people struggle with making good decisions. It’s an important skill to build, especially if you lead others (or aspire to), but there are many obstacles to good decision making. Writer, researcher, and thinker Jeff Annello of the popular Farnam Street website and newsletter and I talk about how to become better at making effective and efficient decisions. We discuss the role of mental models, intuition, and thinking errors and biases in decision making and how to become more aware of and fight against these biases. What specifically is important for leaders to know to make better decisions and help their teams to improve their decision quality. Finally, Jeff gives a very actionable tip that you can implement immediately to begin ratcheting up your own decision making skills. Don’t forget to subscribe and leave a rating and review on iTunes and share this episode with others who could also benefit!
What you'll learn:
- Does Halelly call Jeff a bad word? (Check out what I say I think he is, and why he is NOT that into it) (5:10)
- What is an important career lesson Jeff learned early in his career that he really lives by (which Halelly thinks is both smart and lucky to do)? (5:55)
- Why is an efficient decision-maker like a chess-player? (7:23)
- What kinds of people are more able to make quick and correct decisions? (8:05)
- What should we try to do to improve our decision making effectiveness and efficiency? (8:36)
- You don’t need to experience things directly to learn from experience – how can you train yourself to be better at decision making using other people? (8:50)
- Why some things MUST be learned directly and others are probably best NOT learned directly (hint: his examples involve heroin and sex!) (9:25)
- Mark Twain: “A man who carries a cat by the tail learns something he can learn in no other way.” (10:08)
- What is great, and what are the downsides, of following your intuition? How can we train our intuition? (10:56)
- What’s some of the best research saying about the types of decisions we make well by intuition and those that don’t? (12:12)
- What’s the “First Conclusion Bias”? How can you train yourself to overcome it in many situations? (12:39)
- What does natural selection have to do with intuition? (13:33)
- What’s the two-track analysis Jeff suggests to help you keep your intuition in check? (14:18)
- Who is a great teacher about thinking errors to avoid that Jeff suggests? (15:00)
- What’s the “Narrow Framing” thinking error and why is it a problem? (16:10)
- What do most leaders fail to stop and think about? Why are they like a boy at the bottom of the well or playing poker? (17:07)
- How can leaders help their teams make better decisions? (18:45)
- Why do leaders need to “give a voice to the voiceless”? How can they do it to improve their decision making quality? (19:12)
- Why do people avoid using the ‘oldest trick in the book’? (19:41)
- What can you learn from a Navy Captain to improve your decision making quality? (21:30)
- How can leaders understand and avoid the problems of ‘Group Think’ in decision making? (22:42)
- What’s a way to ensure that you’re getting input from all the people involved – Halelly makes a couple of suggestions for tricks you can use (24:10)
- What’s a question you must ask yourself (that is better than complaining)? (26:09)
- What’s another risk that leaders have to be careful about that is embedded in their rise to leadership and can get in their way? (What is a blog post Halelly wrote about this kind of risk?) (26:43)
- Just awareness is not enough to solve your problem – what are you going to actually do to overcome your decision making problem, which Jeff calls ‘transmission loss’ and says it’s just like learning to play golf (28:03)
- Why is Jeff against 30 Day Cleanses? (29:05)
- Why does Jeff give a cop-out answer to one of Halelly’s questions? (tsk tsk! Thankfully he also gives a ‘real’ answer! :) ) (29:33)
- What’s one new type of research that Jeff is really excited about reading and writing about? (31:05)
- How does Jeff discover new research and insights in his work at Farnam Street? (31:48)
- What’s something specific and concrete that you can do to immediately begin upgrading your decision-making skills? (32:28)
- What is “Hindsight Bias” and how can you overcome it? (33:32)
LEAVE A COMMENT: What have you experienced in terms of decision making thinking biases or great ways to overcome them? What are your reactions about this podcast episode? We’d love to know!
- Check out the Farnam Street Blog website and sign up for their Sunday newsletter, it’s one of the only newsletters I read religiously! Jeff suggests you start at ‘best articles’ tab (LOL at the graphic on there!). Then go to the ‘mental models’ tab.
- Keep in touch with Jeff Annello on Twitter ( @Mungerisms ) or via email - jeff AT farnamstreetblog DOT com
- Also be sure to follow @FarnamStreet on Twitter, operated by Shane Parish
- Halelly suggests you follow Daniel Pink – among many reasons, he’s how she discovered Farnam Street
- Jeff mentions Malcolm Gladwell’s book, Blink
- Read more about Charlie Munger’s “25 causes of human misjudgment”
- Jeff mentions the rock song: Voice of the Voiceless by Rage Against the Machine (but he notes that the song itself is irrelevant to the topic we discussed — Jeff was just using the song's title to help explain the idea)
- Jeff mentions the book It’s your ship
- Halelly’s blog post about CEO Disease
- Jeff discusses physicist Richard Feynman’s wisdom. Specifically, it’s the “fourth trick” described in this excellent Farnam Street article about mental tools from Feynman
- "Everybody is ignorant. Only on different subjects." -Will Rogers (a quote Jeff likes)
- Jeff is enjoying learning from Daniel Schacter of the Harvard Memory Lab
- Read more about the ‘blind man and elephant’ parable
- Download the 10 Mistakes Leaders Make and How to Avoid Them free tool!
- Intro/outro music for The TalentGrow Show: "Why-Y" by Esta - a great band of exquisitely talented musicians, and good friends of mine.
About Jeff Annello
Jeff Annello is the co-author of Farnam Street, a website with over 80,000 subscribers which is dedicated to helping people go to bed smarter and wiser than when they woke up. He spends his time studying and writing about the pursuit of worldly wisdom, with the goal of helping people make better decisions across all the domains in which they operate. Jeff has a background in finance and attended the University of Connecticut.
Announcer: Welcome to the TalentGrow Show, where you can get actionable results-oriented insight and advice on how to take your leadership, communication and people skills to the next level and become the kind of leader people want to follow. And now, your host and leadership development strategist, Halelly Azulay.
Halelly: Welcome back. I’m Halelly Azulay, your leadership development strategist here at the TalentGrow Show, where we focus on how to make you the kind of leader people want to follow. And this week’s guest is a great thinker, researcher and writer, Jeff Annello, who is one of the brilliant minds behind Farnam Street, which is a newsletter and website that I follow religiously to get lots and lots of very good food for thought that I then share with my network. So, you’ve probably read some of the things that I’ve shared if you follow me on social media, and something that I focus on with Jeff in this episode is decision making. This is really important to all of us, of course, no matter where you are in your career, the type of job that you have or the level that you’re at. Decision making can really make a huge difference in your ability to be successful. So Jeff talks about what he thinks makes for efficient and effective decision making, and some of the thinking errors and biases that we all have as humans, and how we can become more aware of them and more importantly, fight against them, so that our decisions become better quality decisions.
And we also talk about implications for leaders, specifically when you’re leading a team and you’re trying to make a decision, what are some of the things that might get in your way and how you can leverage this information and this insight to make better decisions for your team and to help your team make better decisions. And finally, as we do with every episode of the TalentGrow Show, Jeff leaves us with a very actionable suggestion that if you implement, can take you to the next level in terms of your decision making effectiveness. So I hope you’ll enjoy this episode and I thank you for tuning in. Without further ado, here we go, Jeff Annello on the TalentGrow Show.
Welcome back. I’m Halelly Azulay, your leadership development strategist and my guest today is Jeff Annello, who is the co-author of a website called Farnam Street. This is actually a website that I subscribe to and gain tons of value from every week because they research and write very, very smart, interesting articles about a wide variety of subjects. So Jeff is a guy who spends most of his time studying, researching and writing about wisdom, about setting goals, about making smart decisions, and I really look forward to our conversation today. Jeff, welcome to the TalentGrow Show and thank you.
Jeff: Thank you. Glad to be here.
Halelly: Excellent. I always ask for a brief description of my guest’s professional journey. How did you get to where you are today? Where have you been? Just to give us a little bit of background before we dive into the meat and potatoes of this conversation?
Jeff: I would say journey is probably a good word for me. I went to the University of Connecticut, born and raised in Connecticut. I studied business, I studied finance and accounting pretty deeply. Before I started working with Shane, who is the founder of Farnam Street and a good friend of mine and partner, I had a financial background. I spent some time managing some investments and I spent some time as a financial analyst, but I was always deeply interested in the general wisdom aspect of … one thing I really liked about when I was doing investments was there’s a lot that you need to know. It’s a very broad set of mental skills that you need to do that job, and I was always very interested in it. So Farnam Street was a natural evolution for me. Now I spend, as you said before, I spend a lot of time reading and writing about wisdom and sort of the process of making better decisions and things like that. We use the phrase mental models at Farnam Street, but a mental model is basically just a mental tool that helps you understand some particular aspect of how the world really works, and I kind of liken it to a plumber having tools. So there are some tools that are going to be needed at almost any job, like a hammer. And there are some very specialized tools that you only need for some jobs, like an eighth-inch Allen wrench or something like that. But you need all the tools and you need to know how to use them, and I think at Farnam Street that’s sort of our goal, to help people broaden and deepen their toolbox and learn how to use the tools.
Halelly: And you do such a fantastic job. I actually, I was telling you before, when we talked about aligning for this show, that I learned about Farnam Street from an author and speaker that I greatly admire, Daniel Pink, who also has lots of really good information and he seems to be able to kind of be this great curator and one of the sources that he said was always on his list of reading was Farnam Street. So that’s when I started following Farnam Street and it’s been super helpful to me. And so, it’s very interesting. You moved from being more in the applied world of investing to kind of being an intellectual, I guess you’d say? You’re a professional intellectual.
Jeff: That sounds horrible! I hope not. But yeah, I think that’s fair to say in a sense, and also, Shane and I are also running a business and we do conferences and we build workshops and we build courses and things like that. We’re also running a business and we enjoy running the business end of Farnam Street and we’re also, over time, hoping to do more and more business. In reality, I’m doing both. But I’m more on the intellectual side than I’ve ever been, and I like it that way. I like to read. I like to write. I like those things. I learned something – I’m still young – but even when I was even younger, something I’ve always held with me, which is that you want to try and build a career doing things you want to spend your time doing. Sort of that idea about the process being more important than the end goal. I don’t really, personally, I have certain goals, but I don’t really care where I get so much as that I enjoy the process of getting there. Because life is the process. It literally is the process of getting somewhere. So you know, with Farnam Street and getting to work with Shane who I love, I mean, it’s hard for me to ask for anything better.
Halelly: That’s awesome. You’re smart and lucky that you understand that, because so many people are searching for some kind of pot at the end of the rainbow, and it is so, I mean, the happiness is the journey and doing what you love is one of the best ways to be happy. So good for you! So in the course of your work and researching and writing, I know that one of the things you focus on – and I’ve been reading your work – is decision making. I’ve been really curious about decision making, lately especially, and thinking about how to share with my audience more tools to help them make better decisions. What do you think contributes to effective and efficient decision making in general?
Jeff: That’s a good question. I would say that is, of all the stuff we write about at Farnam Street, that’s probably the center thread that ties it all together, is really how does this all make it into practical reality? And I think an efficient decision maker is a lot like a chess player that has studied a lot of games, and can very quickly call to mind other moves that have been made and what the best moves are very quickly. And just as importantly – maybe even more importantly – very quickly discarding unimportant information. So a chess player can see the two or three, very quickly, the two or three moves that are going to be the best ones.
And the truth about practical decision making, outside of the world of games, is that quick and correct decisions, so fast and accurate, which is what we want … I don’t know anybody who wants to make slower decisions that are good, or fast decisions that are bad. We are really after quick and correct decisions. Those are really made by people with deep and wide experience, in some particular domain that they’re working in. Because decision-making and in the moment of the decision actually happens very quickly. I don’t know if people realize how quickly their intuition is flooding them. It’s faster than you realize, and it’s just one of those facts of life that your subconscious is acting much more quickly than your conscious brain. I’m not breaking any new ground by saying that, but I’m not sure that everyone always realizes the implications of that. There are definitely times we can slow the process down and make it more deliberate, but what we’re really trying to do, honestly, and this is my opinion, is training our intuition. And that really comes through deep and wide experience.
So the next point would be that there’s always the debate about which are the more useful experiences? Your own experiences or those of other people? And you hear people digging trenches on either side of this thing. Well, the truth is that’s a false choice, right? We all took algebra. Let’s say A is a positive number and B is a positive number. Well, A and B together must be greater than A or B alone, right? That’s just mathematical truth. So if we can agree that learning from our own experiences is pretty useful and learning from others’ experiences is pretty useful, then obviously putting them together is going to be better, right?
So the truth is that the experience that we need to make better decisions does not necessarily have to be our own. Like to give extreme examples – my extreme example here is you don’t need to get strung out on heroin to know that’s a bad idea. You’ve picked up the vicarious experience by seeing the world and studying other people. And this happens automatically – we do this, nature is pretty good in the sense that it’s given us this system where we can pick up vicarious experiences. So it is obviously true that that’s useful. But I do think you can train yourself to be better at it, just like you can train yourself to be better at golf. You’re not stuck with the swing that you were born with, and I don’t think in terms of picking up other people’s experiences you’re stuck with what you’re born with either. Which is by and large pretty good.
Then on the flip side, you have those cases that are reflected, like in the Mark Twain quote who says a man who carries a cat by the tail learns something he can learn in no other way. And so there are things that need to be learned directly. Like if you plan to learn how to have sex by anything other than direct experience, I wish you great luck. It’s just one of those things that has to be learned directly. So the truth is, most of reality is really a mix. We learn, for example, learning how to build successful relationships with people is absolutely a mix of studying others and observing others and learning from our own mistakes. And again, nature has been pretty good at giving us both systems. And we need both systems.
Halelly: Very interesting. So let’s talk a little more about this idea of training your intuition and you mentioned – and I completely agree and from what I’ve seen and what I’ve studied – we are often not even consciously aware that our intuition is telling us what to do, and sometimes we act on it without even that conscious awareness of any of that process. And so of course that often gets in the way of us making the best possible decisions, because we’re not using the rational part of our brain that has more capacity to take in more input and to really weigh things against each other in a more objective way. But our intuition gives us really great information like you better not drag the cat by the tail! You don’t consciously think about it, your intuition will take care of you if you just listen to it. So this dichotomy or this tension between following your gut or slowing down to make sure you consider it rationally before acting from your gut, how do you suggest people do this thing you say, train your intuition?
Jeff: For example, a book that got very popular is Malcolm Gladwell’s Blink, and that’s about those sort of quick snap decisions. But the truth is that is happening when we make any decision. You develop an automatic feel and that’s just the way the brain works is that’s happening very quickly. I think what the best sort of, some of the best research that has come out, and the best even popularizing that research too, is focusing on the fact that there are certain types of decisions we make well quickly and with our intuition and there are certain types of decisions that we don’t make well with our intuition. And I think people have to start by, A, understanding the way the intuition works, but, B, the different types of decisions that work well in either case.
Because what the brain is basically doing is it’s something that is frequently called the first conclusion bias. Which is the first and most obvious solution and idea that comes into you head tends to be the one that we think is right. So it just kind of gets in there and it’s very hard to dislodge. And I think what people have to train themselves to do is to first recognize what that first conclusion is. Like what is the first thing that came to my mind here, and why? And then give themselves a second to step back and say, “Is that actually the best decision? Is that actually the best solution?” Just because it’s the first one and the hardest one to decide does not mean it’s the right now. And I think most people will automatically go through their lives never having any second thought about the first conclusion that comes into their head. Because they’re like, “Well, my intuition is pretty good.” And sometimes it is pretty good. You’re walking down the street and you see a guy with a gun on the other side of the street, you don’t need to sit there and think, “My first conclusion …” You just run away. You get out of there. That is a case where your intuition is broadly very useful. Tends to be, honestly, a lot of physical situations like that, actually physical dangerous, our intuition is pretty damn good. And the reason why is natural selection working the way it does. People who didn’t have very good intuition were weeded out a long time ago.
Those types of things work well, but when we’re deciding how to make some larger, more deliberate decision, our intuition doesn’t always work the way it should. And what it takes is developing this, we kind of call it the two-track analysis. One, what is the best decision here? But two, what are the ways in which my brain is misleading me about one? Like what’s happening in my brain that’s probably maybe causing me to make the wrong decision? And there are a lot of things. I can’t give you one because I think the first conclusion problem is a really, really important one. But there are many other ones. It just takes the will to go figure out what they are and Farnam Street, that’s a lot of what we do, is trying to talk about those things.
Halelly: And there really are a lot of thinking errors that we have, right? So I know that you love following the work and the words, I guess, of Charlie Munger, and he mentioned like 24 in a speech that he gave, 24 thinking mistakes. So what are some of these thinking mistakes that you think that leaders and people everywhere need to become more aware of these thinking mistakes so that we can evaluate our decision making based on whether we’re following the fallacies or logic. What are the first conclusion you just mentioned – what are a couple of the other ones that you think are really big?
Jeff: So what you’re referring to is Charlie Munger had a speech called, it’s actually 25, “The 25 causes of human misjudgment,” and it’s brilliant. I recommend anybody listening to look it up. I try to read it at least once a year, but I’ve probably read it many more times than that.
Halelly: And I’ll link to it in the show notes.
Jeff: Yeah, we’ll link to it. It’s amazing, incredible. It’s a great synthesis of the way people make thinking errors, as you called them. So the first conclusion bias is a huge one. Another one I’ll hit on is something that we would call narrow framing. So the way that you frame a decision basically determines the way you’re going to make that decision. When you make a decision, you’re making it, you’re maximizing for some parameter of it. Let’s say sit down for lunch and I decide to order a plate of French fries instead of a grilled chicken salad which I know is better for me. In that moment, I’m maximizing for taste and I’m maximizing for those immediate good feelings and that feedback I get from eating French fries. I’m not maximizing for my long-term health, clearly. I mean, we know enough about the research and so on about nutrition and health, can be very contradictory and is not easy, but I’m confident that a grilled chicken salad is probably going to be better for me than a plate of French fries. And I don’t think anybody listening to this is going to disagree with that. So in that decision, in that moment, I’ve certainly maximized for something other than my health. That’s how I framed that decision.
If you think about leaders, I think that most leaders don’t really stop and think about what their decisions are maximizing for. They are implicitly maximizing for something, but they haven’t really thought about what it is. They’re kind of like the boy at the bottom of the well who can only see the walls of the well and maybe the sky. The frame around them is limiting them. Their direct and vicarious experience that I talked about before, it isn’t wide enough. And if it is wide enough, it’s not being called to mind at the time that they need it to make a better decision. So when you make a decision too narrowly, frequently you get hit with consequences that you didn’t see and it’s almost like you made the decision with a blindfold on. And you kind of did. If you’re the boy at the bottom of the well, you can’t make very good worldly decisions because you just can’t see the world around you. It’s kind of like playing poker by thinking only about your own hand and not about the hands the other people have at the table, which is just as important. So that narrow framing problem, in addition to the first conclusion problem, those are two big ones you see a lot, especially by leaders and maybe as we go on we’ll talk a little bit more about those kinds of things.
Halelly: All right, good. Thank you. So if we’re thinking about the listeners, many of them are already in a leadership role within an organization. They’ve got teams that they’re responsible for. They’re often not at the top of the organization so they don’t really call all the shots. They’re kind of sandwiched in between and trying to make good decisions, sometimes with limited options. So what do you think based on the research that you’ve done, what are some of the ways we can help these leaders help their teams reach the best possible decisions?
Jeff: So again, there’s a lot there. So I’ll try to address the problem that I just brought up, so I’ll try to solve my own problem, which is narrow framing. We’ll talk about two things, maybe one conceptual and one specific tool. So from a conceptual standpoint, there’s a rock song, called Voice of the Voiceless. I like that term because I think what a lot of leaders need to do and they need to do this with themselves, but they also need to help their groups do it, which is figure out how to give a voice to the voiceless and honor it. And what I mean by that is a lot of times we make decisions, all the decisions we make affect other people. But the problem is we don’t really think about the people that are being affected by the decision.
And the specific tool is basically think about, before you make a decision that impacts other people, is to actually sit there and in your head say, “How would I feel or what would I think if I was in the shoes of the person or people that would be affected by the decision?” That’s probably the oldest reframing – we’re talking about narrow framing – that’s probably the oldest reframing trick in the book. But the problem is that nobody uses it. The reason people don’t use it is because it makes them very uncomfortable. Because they start, because when you really ask yourself that question, “How will the people who will be affected by the decision feel about it?” you start to realize that you would, if you took it seriously, you would make a lot of decisions in a different way.
Let’s just say you’re the CEO of a company, for example, and you think that you’re entitled to a huge, gigantic stock option package. Now, you may think that you’re entitled to that, but if you actually sit there and think, again, who are the people affected by this decision? Well, all the people below you are affected by your massive compensation package. How will they feel about that? And how will that affect the company? If you actually sat there and thought about it, I have to doubt that a lot of people would still want to take that same level, the same amount of stock options. A lot of them do and I think that it’s because they’re more concerned with what they’re entitled to than reframing the problem the way I’m talking. So that’s my point when I say it’s uncomfortable. It changes the way that you think about a lot of things.
The truth is that, reality, we always like to say reality isn’t the way you want it to be just because you want it to be like that. It doesn’t accede to what you want. It just is what it is. So the reality of a decision like that is going to affect a lot of people and it’s going to affect the way the organization runs. Even if you want to put blinders on, that’s what’s happening. There’s this book called It’s Your Ship, and It’s Your Ship is a book about a Navy captain who takes over a horribly performing ship and makes it the most productive in the whole fleet. And in his own words, what he tried to do was tried to see the world through the eyes of his crew, rather than being a captain dictating on from high. He tried to see the world through the eyes of his crew. It’s like learning how to play poker by finally understanding what other people’s hands are, rather than just your own hand.
You asked what leaders can do to help their groups make better decisions? I encourage them to get the teams thinking like this. Get them to talk about the people who are not in the room. Whether it’s the customer, the supplier, the regulator, the employees below them, the bosses above them, it doesn’t really matter. Bring the people into the room who are silent, and I suspect that if you start really honoring that, then you’ll do a better job seeing the world as it is rather than as you’d like it to be.
Halelly: Cool. All right, good. Any other tools that you want to share with leaders for better decision-making?
Jeff: There’s a lot. I mean, again, there’s a lot.
Halelly: There’s so much.
Jeff: So many. Another one I can just talk about briefly is there’s always the problem of groupthink. Groups, there’s a social aspect to group decision making. So if it’s just me, Jeff, making a decision, there are a lot of problems with people making decisions on their own, but then there are a whole other set of issues that come with a group and that’s because human beings are social creatures. There’s always a social drive behind the way we make decisions as a group. I think people are generally aware of this, but what I see is they don’t act like it. They know it but they don’t act like they know it. Which is another problem in and of itself. The group think problem basically comes from some idea comes out, and frequently made by maybe the highest-paid person in the room or the most important person in the room or whatever, and then the rest of the people in the room start herding around that idea. And you lose any diversity of opinion, which a lot of times can create better decisions. I don't think I’m breaking any ground by saying that, but I think leaders have to recognize the group think problem and understand why it happens. And the way you understand how that happens is by understanding people. It’s just by understanding human nature as best you can, and understanding that people make decisions in a lot of ways other than rationale, basic economic rationality of what’s the best possible decision we could make now, dollars and cents wise. That’s not the way, sometimes it is, but more frequently it’s made other ways than like, if for example, if a leader can come to understand that the lowest paid and optically least important person in the room is probably not going to contribute their opinion, they might be able to take ... and it’s very, very deep in human reasons why that always happens. So if you actually want that person’s opinion you’re going to have to start conducting your meetings and conducting your organizations a little bit differently. So that’s my point, where a lot of it starts with trying to understand human nature and why it is that way, and learning how to act accordingly.
Halelly: Okay, great. So what I’m hearing you say is that the more you recognize and become aware of these potential biases or thinking errors, the more that you can bring them into conscious awareness and actually test against them, to sort of measure your decision that you’re leaning towards against these various metrics to say, “Am I doing this? Am I doing this? Am I doing this?” Or maybe even bake into your process mitigating activities to help overcome or avoid some of the thinking errors. So example, for group think, one of the things I suggest sometimes when I’m facilitating a group brainstorming or decision making process is if you think there are a couple of very vocal people that take the lead or cause the group to veer in a particular direction, one of the ways to overcome that that is relatively simple is to have people contribute their ideas anonymously or in a written form, so that they’re not impacted or informed in any other way by what people are saying, and that every person has a voice, whether they are more introverted or more extroverted, whether they are more dominant or more kind of held back. And then you’re working with all the ideas and from there, you can move forward with like a group discussion.
Jeff: I think that’s great. All you’re doing is just recognizing the way that social dynamics work, and then how do we design a system that’s better than that. Because what I see a lot of times is people complain and they’ll say, “I really wish that everybody in the room would speak up, or I really feel like I’m only hearing from a couple of people,” or whatever, but they haven’t stepped back to ask themselves, “What am I doing to encourage that to happen?” You can’t just complain about it. You can’t just wish – it goes back to the tough truth, which is that the world just is what it is. People are who they are, and just because you want it to be a different way doesn’t mean it will be. What are you actually doing to encourage that to be the case? And until you sort of get over yourself to a certain extent, you won’t be able to do that.
The second step to what you’re saying is, okay, I have all this feedback. Am I actually going to use it? Will I take it seriously? Or am I just going to do what I was going to do anyway? I’m a leader. You’re probably a leader because you’ve had strong opinions on things and you’ve been very successful at them in some way or another, but it’s almost like the further you get up, you have to start taking your own onions and your own thoughts a little less seriously and start pushing in the other direction to think about what other people are thinking. As it goes back to the framing thing I was talking about before, what are the other people feeling and thinking about this and how do I take that seriously? Because you want to see all the hands at the table, not just your own.
Halelly: That’s really crucial. I wrote a blog post about the CEO disease, which was a term coined by Danielle Holman, and it’s basically the higher up people go in the chain of command, the more that they tend to be surrounded by yes men and yes women. And they don’t get fed the information that they really need in order to make sure they don’t make mistakes. Because everybody around them, instead of saying, “Have you considered this or this might not work because of that,” they’re just all sort of nodding their head and allowing this leader to potentially confidently march right off a cliff.
Jeff: And so let’s just say you’re listening to this and you say, “I think Halelly is right. I think Jeff is right. Absolutely. The yes men problem is an issue.” Okay, well then tell me what exactly are you going to solve that problem? How are you going to, just wanting it to go away won’t work. And we talk a lot about being aware of these things, but awareness doesn’t do anything. Awareness is just awareness. What are you actually going to do to solve that problem? How are you going to keep yes men from surrounding you? Are you able to get over your ego in such a way that you’ll have people around you who frequently do not agree with you and who frequently come up with opinions that you would not have come up with and you don’t always think are a good idea at first glance? First conclusion bias. So, that’s the hardest part. There’s always this thing, I call it transmission loss. It’s like you have a very powerful engine, but none of it is getting to the wheels. And solving that problem is, well, if you can solve it, you’ve made a huge leap.
Halelly: And it’s not impossible. You’re right, it’s hard, but it’s not impossible.
Jeff: It’s like learning how to play golf. You’re just not born with the perfect Tiger Woods-esque swing. You have to work at it, and all this other stuff is true. You’ve got to work at it. I’m against 30-day cleanses. I’m against quick hits, the new new thing, whatever. And the reason why is none of it works. It may work for 30 days, but it’s not about 30 days. Life is long. And what you need are very long habits that last forever.
Halelly: Excellent. Good wisdom! Well, before we give people one really specific action that they can take this week to improve their own decision-making skills, real quick, what’s new and exciting on your horizon? What’s got your attention these days?
Jeff: First I’m going to do a copout answer and then I’ll give you a real answer. My copout answer is what’s constantly exciting for me is that lifelong process of getting new tools in the toolbox. And just as importantly, which people don’t like to do and I don’t like to do but it has to be done, is throwing away old tools and getting new ones. And if a year goes by and you haven’t thrown away some old tool and upgraded it, you’re going to be like a plumber who is using the same tools he used 40 years ago when there’s much better stuff available now. You have to constantly be figuring out, “What are my tools?” The only question you’re asked, the core end of the day thing you’re asking yourself, is does the world really work this way or not? Not do I wish it worked this way. Not that it would make sense if it worked this way or whatever. Is this actually what’s happening? I got that idea from Richard (inaudible 30:17) who is a physicist, and what he said is, “People are always interested in is it possible?” They’re going after a mystical, let’s just say we’re trying to figure out mind reading, and people are always interested, “Is it possible? Richard, is it possible?” He goes, “Yes, it’s possible. But there are billions of things that are possible that are not actually happening. That’s not what we’re interested in. Not what’s possible. What has actually happened?” So I think that process of trying to figure out and wrap your head around the way the world actually works , that’s exciting to me.
Halelly: Well, I was just going to sort of paraphrase to say stay curious and keep upgrading.
Jeff: Yeah, keep upgrading. And keep realizing you’re probably deeply ignorant about something. I forget the exact quote, but Will Rogers had a quote that was something like while ignorance is about different things. And so that’s kind of my copout answer. But I guess my real answer would be that I lately have been studying the human memory a lot and that’s been very interesting. All the little quirks and failings and advantages and why the memory works the way it does, stuff like that, I find very interesting. We’ve had some stuff about it on Farnam Street and I suspect we’ll have more.
Halelly: All right. Good, I look forward to reading about it. Who is top of mind in terms of the research? What’s most impressive in terms of the memory research?
Jeff: The guy who I like the most, and I’ve been reading about a lot, his name is Daniel Schacter. He’s a psychologist at Harvard. He runs the Harvard Memory Lab, and I think he’s got a lot of great insights. And I found him through another thing. A lot of what we do at Farnam Street, people ask us a question a lot, like, “How do you guys come across this stuff?” And honestly, one thing builds on the other. So the memory thing came from studying the development of human personality, which we wrote about a bit, and she used some of his research to do her work, and that’s a lot of what it is. Pulling a thread.
Halelly: Following the breadcrumbs on the great inter webs.
Jeff: That’s it!
Halelly: So before we wrap up, what’s something really concrete, really specific, that people can do that can immediately begin to upgrade their decision-making skills?
Jeff: Sure. I strongly recommend that people start keeping what I call a decision journal. A decision journal, I think where people get a little bit in trouble with the idea and hopefully we’ll head it off on the pass here, is they want to record too much stuff. But basically, a decision journal is something where you can start writing down the parameters by which you’re making important decisions, and doing it when the information is fresh. What’s the decision I’m making, and why? And what do I think the outcome will be? Broadly speaking, what do I think is going to happen? So this allows you to do two things. The first it allows you to do is start making all those frames explicit. Just start pulling them out a little bit. You’ll start seeing the degree to which you’re only feeling, it’s like the blind man and the elephant. You need to start seeing the degree to which you’re kind of only feeling part of the elephant. And I think when you start recording your big decisions and important decisions and why you’re making them, you kind of make some of that explicit and less in the subconscious, more in the conscious, maybe. We’ll call it that.
The other thing that it allows you to do is create a document that you can revisit over time, and what this document helps you do is overcome another set of biases, one of which is hindsight bias. We’re very favorable to ourselves in hindsight, a lot of times, and it allows you to alleviate some of the transience of your memory. Memory fades over time, and it fades, it changes, and every time we pull up a memory we tend to change it slightly. Not like a computer where it’s just an exact replica that comes up. So what you’ll find with that document is as you go back to things, the decisions you’ve made in the past, you may have thought you did it for some reason or another, and you may have thought your decision was something else than it actually was. And going back and seeing those things, it’s helping you get the reps. I was talking about at the beginning, directing vicarious experience, making it wider and deeper, I think that’s one way that you can do it.
Halelly: Love it. That’s a great and very, very specific actionable tip, so thank you for that, Jeff. I appreciate it. How can people stay in touch with you, learn more about you, and learn more from you?
Jeff: Well, they can go to the site, Farnam Street. I’ll have you post a link for me. And I think that people might want to start, we have a tab that we call “best articles.” It’s got some of our best stuff. The other tab that is really good is mental models. Start digging into what those are and start filling out your toolbox a little bit. And then most importantly there’s a box at the top that allows you to subscribe to our Sunday newsletter, which I think is the way most people follow us and I think probably the best way to do it. It’s the way you can keep up with the stuff we’re writing about and we’ll recommend other articles we find interesting that week and books and things like that. So I would definitely recommend that.
Halelly: I second that recommendation. It is such a fantastic resource.
Jeff: Awesome. As far as me personally, I have a Twitter handle, it’s @mungerisms. I’ll have you post the link to that too. There’s also @FarnamStreet, Shane runs that one, and that’s probably good. And then I can probably have you post my email address if anybody wants to send me an email.
Halelly: Very good. Well, I appreciate your insights and sharing them with us, and I hope that folks will take you up on that specific action you suggested, but also just in general begin to be more active participants in their own upgrading of their decision-making. Jeff, I hope you have a really great week and thank you again for your time.
Jeff: Thank you.
Halelly: Take care.
So have you experienced any of those decision-making biases or mistakes that Jeff mentioned? I know I certainly have, and it makes decision-making so tricky, and so many times we know what we’re supposed to do and then something else happens. So hopefully this tooled you up for more awareness and more importantly more action to make better quality decisions faster. And leave me a comment about some experience you had with faulty thinking in terms of the decision making that you’ve tried to do, or where maybe you’ve experienced some great ways to overcome some of those biases. That way you can share your knowledge with others and get the conversation going. That’s over on the show notes page, at www.talentgrow.com/podcast/episode37. That’s also where you can grab that free tool that I sometimes mention. I’ve created it for you, the listeners of this podcast, and if you haven’t grabbed it yet, please go get it. It’s free. You just put in your email address and that way you will get a download of the 10 mistakes that leaders make and how to overcome them, as well as my weekly newsletter, which is always very short, upbeat, fun to receive, useful and easy to unsubscribe from if you don’t like it.
And iTunes is the place where you can leave a rating and a review and I hope you’ll take a couple of minutes to do that. It really is very quick and it helps me so much, and share this episode with a couple of other people that might also benefit from thinking about their decision making and making better decisions. My goodness, if we can get more people around this globe to make better decisions, it will be a better world. So that’s my goal, making the world better, giving people new skills that they can use, and I appreciate that you stuck around until the end. Thank you for listening to the TalentGrow Show. I’m Halelly Azulay, I’m your leadership development strategist and I’m really grateful to you. Make today great. Bye.
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