The Art of Decision-Making: For Managers, Leaders & Product People

“The difference between an amateur and a professional is in their habits. A professional has professional habits.”

One of the key things that you do on a day-to-day basis, in both your personal and professional life is to make decisions. Whether you are building your company, thinking of accepting a job offer you just received or simply making a weekend plan, decisions are being made everywhere.

Yet, very few people have formal training in decision-making. Like it or not, biases/prejudices play a major role in decision-making and often result in bad decisions.

So how does one get better at decision-making? Is there a way you can almost always make good decisions? And did I throw the quote at the beginning of this post just like that, or does it really have anything to do with decision-making? I will try to answer these questions in this post.

Let’s first understand how habits get formed. When you study the science of habit formation, you will discover that there are three distinct elements to a habit: Cue, Routine, and Reward.

Let’s take an example. Many people have developed a habit of checking Facebook multiple times a day; even every hour. One major Cue to this behavior is boredom. Boredom when you are standing in a line, boredom when you’re not engaged in a conversation at the dinner table, etc.

The Routine is opening the Facebook app, and scrolling through the feed. The Reward is you feeling a rush of excitement or joy or any other feeling, in anticipation of something to appear on your Facebook feed, having the ability to invoke those feelings, i.e. a message from a friend, likes on your photo, etc. Dopamine is a neurochemical that controls pleasure centers of the brain. Once released, it makes you feel better instantly. So whenever you are bored, your brain picks the cue, and your hands reach your smartphone. You open the app (routine) and get a hit of dopamine (reward).

Habits are very powerful.

Aristotle said,

“We are what we repeatedly do. Excellence is not an act, but a habit.”

Be it in sports, academics, or even decision-making, this fundamental truth applies everywhere. So, whenever you are being indecisive (the Cue), most of us follow an ad-hoc decision-making process where we might miss critical elements (the Routine), and arrive at a solution. Arriving at a solution makes us feel good and relaxed (the Reward) because decision-making is a mentally exhausting process.

You may have already concluded what I am going to say next. We just need to change the Routine to arrive at a better decision-making process. A better decision-making process will substantially improve the results of your decisions. The framework I have described below should help you do this. It is based on numerous books on this topic, along with my day-to-day experiences and interacting with multiple people that I have been fortunate enough to talk to and get ideas from.

For the sake of simplicity, I have kept it brief, including examples wherever possible. There are 5 broad steps:

STEP 1 (most important)

Define Jobs-To-Be-Done (JTBD) to solve the right problem: Clayton Christensen, after studying ‘What makes products/companies succeed?’ for nearly two decades, came up with the theory of Jobs-to-be-done. The core of this theory is to literally discover the jobs to be done, and then come up with a variety of solutions.

But why is this relevant here? Because every decision involves a specific job to do. For example, some of us like going to the spa and often, just the feeling of being pampered and offered tea in a nice smelling and sanitary environment seems like the main reason we go to the spa in the first place, or it is the key job to be done. But if you think some more, the job is to actually get a massage and release tension, stress or cure sore muscles.

So, while a company specialising in creating soothing music for spa-like environments may continue doing so, we must not confuse the real job or the main reason why one would go to the spa in the first place. The real job might be solved by someone who innovates a product or service that recreates a spa massage on the go, making the need for every ancillary thing associated with current spas, redundant.

Therefore, by not thinking through and defining the key jobs-to-be-done while making a decision, you have a risk of picking a surface problem to solve.

You need to make sure that you don’t define a job narrowly. Defining the real job will help you see other alternatives to the one solution you have in mind. And in order to define the job, Professor Christensen advises on following this two-step process:

  • First, a description of JTBD shouldn’t contain adjectives or adverbs, like convenience. It should be all verbs and nouns. ‘We should aspire to be more honest’ isn’t a job really.
  • Second, if products in the same class can solve the problem, you are not uncovering the job. This is to ensure we are thinking at an optimum level of abstraction. For example, ‘finding a good place to stay’ is the right job, whereas ‘finding a good hotel to stay’ isn’t. By thinking first, you can book cheaper alternatives like AirBnB, or your friends might suggest some other good alternatives. This will save you some bucks.
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STEP 2

Evaluate your window of opportunity to make this decision: Can the decision-making be delayed? If it can be delayed for later, you can wait for more information to come in, and decide later. Do not confuse this for procrastination.


STEP 3

Size up the decision: Sizing up the decision helps you decide how much time you want to invest in researching, and exploring options.

  • 10/10/10 rule – will the decision affect you/the business by 10 days, 10 months, or 10 years? One should never spend the same amount of time to decide whether to take a home loan, versus whether they should go out for dinner.
  • Is the decision reversible? – If it is, you shouldn’t be investing a lot of time in it. Boiling the milk, versus actually making the curd, anyone?
  • What are the upside and downside? – Quantify outcomes in both cases. Make the decision on the basis of the upsides and protect the downsides. For example, should you be hosting a dinner party on the lawn, or indoors? While hosting a dinner party on the lawn might be more enjoyable (upside), a drizzle might spoil your evening (downside). In the rainy season, you should obviously host your parties indoors!

STEP 4

Research: Once you have sized up the decision, it’s time to research your options.

  • Has someone made this kind of decision before? Can we use their advice on this?
  • Find and weigh options and make a list of pros and cons. Most times, we go ahead with the first feasible option that comes to mind. Don’t make that mistake and make sure you’ve picked the best possible solution.
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 STEP 5

Write down the decision once you have been through the four steps. Since you would have a list by now, figure out the most important outcomes (1 to 3) and choose the option closest to meeting these. You can’t have a solution that meets all your needs, so don’t obsess over finding something that does!

Bonus tip: Beware of Parkinson’s law of triviality, i.e. the tendency of people to give disproportionate attention to trivial issues and details.

The example Parkinson used to illustrate his law was a committee’s discussion on using an atomic reactor compared to painting their bike shed. The reactor is expensive and can be understood by only a few people, so people assume that the decisions that need to be made about it can be made easily by those who work on it. In contrast, everyone can have an opinion on the colour of the bike shade and understands its implications. Everyone participates and wants to add their ‘expertise’ to the decision-making process. As a result, the atomic reactor is discussed for 10 minutes, and the bike shed for the rest of the 50 minutes in an hour-long meeting.

I wasn’t a natural at decision-making. Many people keep ruminating for years on the decision to stay in a job, or start a business; never quite making a decision till they reach a point of getting overwhelmed when they think about it. I’ve been there, and understand how much regret it causes sometimes. This is a humble attempt to help all those thinkers who can become doers. This is to save all those ‘if only’s’ both in the near future and long-term. These rules have helped me immensely in relationships, work and at a personal level. I hope it does the same for you. 🙂

Good luck and feel free to write-in to us or comment in the section below, in case of any questions!

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Deepak Singh
Motto: "Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."Deepak is passionate about product development & growth, behavioral economics, and building defensible businesses. He loves data and is learning to build products that change the world for the better! Deepak currently works at UpGrad.