Making the Right Decision vs Making the Decision Right

What’s up, all you beautiful people? Welcome back to the podcast. I want to talk today about the, the most valuable, ultra high leverage skill in the world, which is your judgment, your ability to make a decision. And this came up because I have a prospect who wants to work with me in a coaching consulting basis. But the thing is, I am very expensive to work with. I’m expensive because I know what my time is worth and I know the results that I can help get people because I’ve done it dozens and dozens and dozens of times. So I know the value that I bring to the equation. However, I understand that when you first see the price, it’s a bit of a sticker shock. And you go, oh, I don’t know about this.

And that’s exactly what this lady experienced. She knew coming in that I was going to be expensive. And then she sees the number and she goes, oh, okay. I just need more time to make a decision. In particular, she says, I need to wait a. I’m just waiting for my gut to tell me that this is a hell yeah. And this goes back to something Derek Sieber said. He said, if it’s not a hell yeah, then it’s a hell no.

But the problem with this mindset of is it a hell yeah or a hell no? Is that many of the most important decisions that we have to make in life aren’t that cut and dry. A lot of times we make decisions with emotions that we justify with logic. And that’s actually the worst way to make decision. We want a systematic process where we’re evaluating the information at hand, we’re calculating probabilities, and then we’re trying to make the best educated decision possible. And that doesn’t result as a, as a feeling in our gut. And so if you’re running your business as a consequence of your feelings of that emotional state in your gut, you’re probably going to be making some inconsistent and bad decisions. And I see this time and time again when I’m working with somebody and they’re in a tough spot in their business, it’s like, okay, how did we get here? Why did you decide to do that? And they go, oh, I don’t know. They don’t have a systematic, calculated way to express.

Here’s why I made my decision. And so I want to share with you today a ten step process that you can follow to analyze the big decisions in your life. And you walk through this and you try to eliminate or isolate or identify the emotional state behind it. So we can remove that and we can get to the logic if does this actually make sense or not? And if it doesn’t, awesome. But we need to have a process for qualifying our decisions. And the value of this process is that you’re physically going to write it out so that you have a document that you’re going to be able to refer to in the future. Six months, nine months, twelve months from now. You can look at that document and you can put it through the filter of, okay, I did make this decision.

Here’s how it ultimately, here’s what I thought was going to happen. Here’s what ultimately did happen. And now when you move forward to make big decisions in the future, you can be aware of that bias or that good framework that you use that actually did play out. But a lot of times we think we’re better at making decisions than we truly are because we don’t have an objective measure to look back on and say, okay, what was I thinking when I made that decision? What was my thought process? So this is critical. And it’s one of the items, or one of the things that big hedge funds and big investors like Warren Buffett do before they make massive investments is they do a one page investment memo where they write out exactly the thought process they’re going through, why they think this is a good investment, what the risk factors are, and what they’re going to do to mitigate it, and where they think they’re going to be in the future. And by getting those thoughts down, you will crystallize the decision that you need to make, and you will remove the gut from the equation. So let’s dive in. Number one, the first question to ask is, what is the problem that we’re trying to solve? Getting very clear on the actual problem that you’re solving is 90% of the battle, most of the time we’re solving, we think we’re solving this problem to lead to this solution.

But the reality is it’s actually not the underlying problem. We’re solving symptoms, not root causes. And so the follow up question to this is, why is this actually a problem that needs solving? Why is this actually a problem that needs solving? Ask those two questions in conjunction. That’s one line, what’s the problem we’re trying to solve? Get as clear about this as possible, because a problem well defined is half solved. Number two. Second question that we’re going to ask is, how are you feeling in this moment as you’re writing this down in your emotional state, when you think about this problem, or you think about this potential solution. How are you feeling? What emotions does that elicit? By identifying that, we can start to see trends. When I’m feeling nervous, when I’m feeling stressed or anxious or overwhelmed or I’m feeling jubilant, I’m feeling joyful, I’m feeling abundant.

We make different decisions. We want to see those trends when we’re looking back. So we do that by documenting. How are you feeling in this moment? Next. This is number three. What are the three options you’re considering here? Because it’s never just this or not. It’s not I need to do this thing. It’s I need to do this or I need to do that.
If I don’t do this, that is also a decision. I’m considering not doing this thing right, and there’s usually a middle ground. There’s this other path that I could take. So what are the top three options that you’re considering? Bolt them out. Boom, boom, boom, boom. Next number four is you’re going to write out pros and cons. Write out five to seven pros and cons for each one of those decisions. Here’s why I think this one could be a good decision.
Boom, boom, boom, boom. Here’s the nice things I think that might happen. Here’s why I’m afraid of this one, though. It’s expensive, it’s unsure, there’s no guarantee. I don’t know, like, boom, boom, boom. Write those out for each one of those. Next number five is what is the probability that you believe of each one occurring? So, of those three decisions, you’re like, this one has the most pros, the least cons. But probability wise, I actually think it’s only, like 20% likely.

And I want you to put an actual number to it. Don’t just say, I think it’s high likelihood or low likelihood. Try to pinpoint an actual specific number. I think this is like 20% likelihood. This one, I think, is 32% likelihood, and this one is 72% likelihood. Now, are those numbers accurate? Are they born in any kind of objective metric? No. But by making yourself put a number there, we aim small, we miss small. And by getting as clear and, like, putting a stake in the ground, you’re going to come up with probably a more accurate number than if you were just ballparking.

A range like 50% to 80%. Once you get clear, 62%. Okay, next number six. What’s your number one option? What? Of these three options that you’re considering, the pros to cons, probabilities, which one is your top option, which one do you lean towards? And it might not be the highest probability one of success. Sometimes we make decisions knowing that it’s a low probability of success, but the pros outweigh the cons by so much that we are taking that asymmetric bet. Number seven, what do you think will happen if you choose that top option? Write this out. What do you think will happen? Not just what are the pros, what are the cons, but what do you actually think will happen? Because we write the cons but those might not happen. Or we write the pros, but those might not happen.

What do you think in six, nine months from now will happen if you choose that option? And then the follow up question to this is, number eight, what’s the worst case scenario? What’s the worst case scenario? A lot of times we magnify these decisions, make them much bigger in our minds, and then when you look at what’s the worst case scenario? We realize, oh, could you live with that? Is that really that bad? It could be. I spent $10,000 on this program. I didn’t get what I thought I was going to get out of it, but I learned a valuable lesson. I learned this one nugget. I learned how I need to be more diligent about vetting in the future or whatever it is. Like, is that the worst case scenario? Okay, that’s not so bad. Or is it? This is going to put my family in the big house and we’re going to be on the streets. Like, okay, maybe that’s a worst case scenario that we do not want to experience.

But a lot of times the worst case scenario is not as bad as we think it is. So identify it here and then ask yourself, can that be undone? Is it a worst case scenario that leads to death or imprisonment or, like, for forever exile? If not, then can it be undone? Okay, that de risks it quite a lot. Number nine, what information are you currently lacking that would make this decision easier? Is there any information that you don’t have yet that would just make this easier? Write that out and you can ask yourself, is this information that I could get, is it possible to go out and get the answers to this? Like, I want to guarantee that this is going to work? Okay, maybe the information that you need is to go talk to the other students. You need to see the data of, like, how many students have actually succeeded in this program? I don’t know what it is, but what information would make this easier? And you bracket it into two things. Information that you could have or imperfect information that you can never have, because you’re never going to make a decision. In a, an environment of perfect information, there will always be things that you’re lacking. But we want to identify that if there is information that would make the decision easier, that we can get, that we go and get it. And last but not least, when will you make this decision? When will you make this decision? You need to put a line in the sand.

Otherwise, decisions have a way of not getting made, and that in itself is a way of making a decision. And I guarantee you, not making decisions and just letting the universe happen is the worst way to make a decision. So follow this framework, follow this process, get a journal, start writing these out for the big decisions in your life. Whenever that comes up, whenever you’re feeling any kind of anxiety or you realize this is a pivotal decision, I need to get right. Take a moment, take a couple hours if you need to, and go through this process. I promise it will crystallize your thinking. It will make you a better decision maker, I promise. So take this and run with it.

If you got value from this, let me know. Share this. Share these ten questions with people in your network and your world. Bring them a little bit of value. Help them become a better decision maker as well. So take a picture of the podcast here. Share it on social media. Tag me in it.

I will give you all the love in the world because I appreciate all the support and I appreciate you being here. And I will catch you tomorrow here, bright and early or late. Whenever you listen to this, I don’t care. But until then, stay hyper focused, my friend.