Derek Sivers

Decisive - by Chip and Dan Heath

Decisive - by Chip and Dan Heath

ISBN: 0307956393
Date read: 2014-06-27
How strongly I recommend it: 8/10
(See my list of 320+ books, for more.)

Go to the Amazon page for details and reviews.

Interesting and insightful dive into the subject of how to make big decisions. Specific useful advice.

my notes

This book will address decisions that take longer than five minutes to make.

A remarkable aspect of your mental life is that you are rarely stumped. You have intuitive feelings and opinions about almost everything that comes your way.

Understanding our shortcomings is not enough to fix them. Does knowing you’re nearsighted help you see better?

Beware of “Should I do this OR that?” instead, ask yourself, “Is there a way I can do this AND that?”

The first villain of decision making, narrow framing, which is the tendency to define our choices too narrowly, to see them in binary terms.
We ask, “Should I break up with my partner or not?” instead of “What are the ways I could make this relationship better?”
We ask ourselves, “Should I buy a new car or not?” instead of “What’s the best way I could spend some money to make my family better off?”

Two research studies headlined “Data That Supports What You Think” and “Data That Contradicts What You Think.” Guess which one gets cited?

When doctors reckoned themselves “completely certain” about a diagnosis, they were wrong 40% of the time. When a group of students made estimates that they believed had only a 1% chance of being wrong, they were actually wrong 27% of the time. We have too much confidence in our own predictions.

We can’t deactivate our biases, but we can counteract them.

Intuition is only accurate in domains where it has been carefully trained. If you’re a chess grand master, you should trust your gut. If you’re a manager making a hiring decision, you shouldn’t. (You’ve probably hired only a small number of people over the years, and the feedback from those hires is delayed and often confounded by other factors.)

Decisions don’t occupy much of our time, they have a disproportionate influence on our lives. In our cars, we may spend 95% of our time going straight, but it’s the turns that determine where we end up.

Mergers and acquisitions: 83% of them did not boost shareholder value. Thinking of doing a merger? Don’t. Five times out of six you’ll be right!

How managers make decisions: only 29% considered more than one alternative.

Being exposed to even a weak hint of another alternative - you could buy something else with this money if you want - is sufficient to improve our purchasing decisions. (A) Buy this entertaining video. (B) Not buy this entertaining video. Keep the $14.99 for other purchases. Do we really need to remind people that they can use their money to buy things other than videos? The reminder almost doubled the chance that people would pass on the purchase!

That phrase “whether or not” is, as we’ve seen, a classic warning signal that you haven’t explored all your options.

When people imagine that they cannot have an option, they are forced to move their mental spotlight.

Until we are forced to dig up a new option, we’re likely to stay fixated on the ones we already have.

The name of the brush should signal lightness. He asked his network of linguists to brainstorm about metaphors.

Adding one more alternative to your decision will substantially improve your decisions.

Produce options that are meaningfully distinct.

Poll colleagues for their preferences. If there’s disagreement, that’s a great sign that you have real options. An easy consensus may be a red flag.

Common states of mind: Avoiding bad things, and pursuing good things. When we’re in one state, we tend to ignore the other. This blending of mindsets is as vital for our personal decisions as it is for organizational decisions.

To generate new options, find someone else who’s solved your problem.

Force yourself to consider prescribed questions, one at a time, to generate new options. A “canned” list of stimuli seems to spark fresh insights.

It’s generative; it stops people from overlooking an option. (Don’t forget to shine your spotlight over here …)

The average premium paid in an acquisition is 41%. The acquiring CEO is basically saying to the target CEO, “I can run your company at least 41% better than you can.”

For every favorable article written in a major publication about the CEO, the acquisition premium paid went up by 4.8%. If you’re looking to sell your company, definitely call the person on the cover of Forbes.

An antidote to hubris: disagreement. CEOs paid lower acquisition premiums when they had people around them who were more likely to challenge their thinking,

Our “bubble” is not the boardroom; it’s the brain. The confirmation bias leads us to hunt for information that flatters our existing beliefs.

Take each option, one at a time, and ask ourselves: What would have to be true for this option to be the right answer?

Imagine a set of evidence that would persuade your to change your mind.

What if our least favorite option were actually the best one? What data might convince us of that?

“What problems does it have?” That prompted 89% of the sellers to come clean.

Probing questions signal confidence and experience in the asker.

What’s the most likely way I could fail to get the right information in this situation?

Leaders always say, ‘I learned the most from my mistakes.’ Well, why leave the mistakes to serendipity? Why not take some control of the process and make mistakes that you’re most likely to learn from?”

When you’re trying to gather good information and reality-test your ideas, go talk to an expert. An expert is simply someone who has more experience than you. Be careful what you ask them. Experts are pretty bad at predictions. But they are great at assessing base rates.

In assessing our options, the best complement to the big picture is often a close-up.

Anne Mulcahy, who as CEO of Xerox announced that executives, on a rotating basis, would have to serve as the customer officer of the day. The customer officer would have to deal with every customer complaint that came into corporate headquarters that day. Mulcahy said, “It keeps us in touch with the real world.” It made the stock four times more valuable.

When we zoom out, we take the outside view, learning from the experiences of others who have made choices like the one we’re facing. When we zoom in, we take a close-up of the situation, looking for “color” that could inform our decision.

Do both.

A student, Steve, has decided to go to pharmacy school. Work in a pharmacy for a few weeks. Sounds obvious. Yet every year hordes of students enroll in graduate schools without ever having run an experiment like that: law students who’ve never spent a day in a law office and med students who’ve never spent time in a hospital or clinic.

Ooching is a diagnostic, then, a way to reality-test your perceptions. Try it first.

That diva-ish, “I just know in my gut” attitude is inside all of us. We won’t want to bother with ooching, because we think we know how things will unfold.

Even the best forecasters did worse than a simple computation that takes the base rates and assumes that the trends from the past few years will continue.

Experts with two decades of experience did no better than newbies.

Experts who made more media appearances tended to be worse predictors.

Experts with impeccable credentials underperform a dumb algorithm that merely assumes that what happened last year will happen again this year.

Get out of the business of prediction altogether.

One similarity among many entrepreneurs, she said, was an aversion to prediction. “If you give entrepreneurs data that has to do with the future, they just dismiss it.”

60% of Inc. 500 CEOs had not even written business plans before launching their companies.

”I don’t believe in market research. Somebody once told me that the only thing you need is a customer. Instead of asking all the questions, I’d try and make some sales.”

Bill Gross: Had an idea for selling cars online. He hired a CEO for 90 days and gave him a mission: Sell one car.

This preference for testing, rather than planning, was one of the most striking differences between entrepreneurs and corporate executives.

Ooching has one big flaw: It’s lousy for situations that require commitment.

Ooching, in short, should be used as a way to speed up the collection of trustworthy information, not as a way to slow down a decision that deserves our full commitment.

Interviews are less predictive of job performance than work samples, job-knowledge tests, and peer ratings of past job performance.

Why predict something we can test? Why guess when we can know?

Committed to stick with his criteria, he started calling up car dealerships within a 20-mile radius. He’d beaten the high-pressure sales game by avoiding it altogether.

Attain Distance Before Deciding.

Think about our decisions on three different time frames: How will we feel about it 10 minutes from now? How about 10 months from now? How about 10 years from now?

Short-term emotion isn’t always the enemy.

How will you feel about this decision 10 minutes from now?
How will you feel about this decision 10 months from now?
How will you feel about this decision 10 years from now?

A 10/10/10 analysis simply ensures that short-term emotion isn’t the only voice at the table.

The choice was clearer when students thought about their best friends than when they thought about themselves. Distance yielded clarity.

When we’re giving advice, we find it easier to focus on the most important factors. But when we think about ourselves, we let complexity intrude.

The advice we give others, then, has two big advantages: It naturally prioritizes the most important factors in the decision, and it downplays short-term emotions.

What would I tell my best friend to do in this situation?

She realized why she was stuck: It wasn’t just a job decision; it was a values decision.

When you strip away all the rational mechanics of decision making - the generation of options, the weighing of information - what’s left at the core is emotion. What drives you? What kind of person do you aspire to be?

They enshrined that priority, making it known to everyone in the organization, so that it could influence dozens or even hundreds of future decisions. It helped employees navigate decisions between two good options. (Is allowing medical residents on trips best for the patient? No, because they distract the visiting physicians.)

Enshrine core priorities. If a customer drops a corn dog, should he offer a free replacement? (Is his top duty to ensure that the customer is satisfied or that the owner is profitable?)

People rarely establish their priorities until they’re forced to.

A more egotistical CEO might have simply said, “Here’s what I’ve decided.”

Create a “stop-doing list.”

List A contained the mission-critical tasks, and List B contained the things that were important but not core, “the dreary, repetitive stuff, such as chipping and painting.” After compiling the two lists, Captain Abrashoff declared war on List B.

Set a timer that goes off once every hour, and when it beeps, we should ask ourselves, “Am I doing what I most need to be doing right now?”

“Bookending,” which involves estimating two different scenarios: a dire scenario (the lower bookend), and a rosy scenario (the upper bookend).

“The future is uncertain, so my investments can’t hinge on knowing the future. I look for situations where the bookends suggest that I can invest wisely without knowing exactly what the future holds.”

Imagine the future “death” of a project and ask, “What killed it?”

Once all the threats have been surfaced, the project team can Prepare to Be Wrong by adapting its plans to forestall as many of the negative scenarios as possible.

Realistic job previews have been shown to reduce turnover even when they are given after the employee is hired.

They’re helping all people cope better when they confront the inevitable difficulties of the role.

Tripwires encourage risk taking by letting us carve out a “safe space” for experimentation.
Let’s give the topiary-sculpture business a shot, but can we agree that we won’t invest more than $10,000 of our savings.
Go for it, but if you don’t have a paying customer within three months...

Signs of opportunity: a similar tripwire for “unexpected success”

Coach her employees, “If you see people using our product in a way we haven’t anticipated, let’s talk about it.”

Compromise can be valuable in itself, because it demonstrates that you’ve made use of diverse opinions, which is a way of limiting risk.

Bargainers come to the table with different options, which helps the group dodge a narrow frame.

Also, bargainers tend to act as devil’s advocates for each other, asking the disconfirming questions that people don’t always ask themselves.

It might be watered-down only in the sense that the parts that were least likely to work have been removed.

When you can articulate someone’s point of view better than they can, it’s de facto proof that you are really listening.

Procedural justice is critical in determining how people feel about a decision.

Court cases: Losers who perceive procedural justice are almost as happy as winners who don’t.