Today we will learn about “How To Make Better Decisions” By: Dr. Stephen Kraus
1. Don’t weigh “extreme outcomes” too heavily in your decisions
We often exaggerate how likely “extreme outcomes” are because we frequently see vivid examples of them in the media. Extreme outcomes generate many news headlines, regardless of whether those outcomes are good (winning the lottery) or bad (a horrible death from dramatic causes like earthquakes, tornados, and terrorism). The more something is on the news, the more likely it seems. Winning the lottery seems more likely than it is because we see TV interviews with winners, but never with losers. Dying in a natural disaster or airplane crash seems more likely than it is because those events make headlines. Dying in a car crash or a swimming pool (falsely) seem much less likely than they are because they don’t generate headlines.
Bottom-line: For making better decisions, don’t assume that extreme outcomes are as likely as they first seem.
Example: Suppose you are considering whether or not to start a business. As you weigh the pros and cons, avoid placing too much psychological weight on extremely positive outcomes(your company goes public right away, making you an instant zillionaire) or extremely negative ones (you bankrupt yourself and create an Enron-like disaster). “Middle ground” options at both ends are much more likely.
2. Consider failure as well as success
For the most part, we think about success. We make plans for success. Our plans may not be great, and we may typically take insufficient action to get what we truly want, but for the most part, we are mentally focused on success. In fact, setting “approach” goals that focus on what we want to achieve is a key goal-setting principle â€“ fortunately, as I review in my book, over 80% of goals are “approach” goals rather than “avoidance” goals.
This relatively single-minded focus on success has many psychological consequences â€“ some good and some bad. Research has shown that just thinking about an outcome makes it seem more likely, because we then think about all the ways that it might happen. As a result, we plan for success, and typically make life decisions expecting success. Unfortunately, in life, failure is an all-too-common occurrence. Divorce is just as common as staying married. Losing weight is great, but it’s much less common than trying-and-failing to lose weight. Living paycheck-to-paycheck and wrestling with credit card debt is more common than great wealth. The list goes on.
Bottom-line: For making better decisions, consider possible negative outcomes in addition to positive ones, even if they don’t seem likely at first.
Example: Me. I’m a positive guy. Usually that works for me. But not always. When I recently launched a joint venture with a colleague, I knew I would work hard, and I expected success. But I didn’t consider that my partner not work hard and quickly quit, wasting a great deal of my time. I assumed success, so I didn’t see the early warning signs of failure. Had I considered that possible negative outcome from the start, I would have managed my time and that partnership much differently.
3. Get input from others
The “planning fallacy” is the tendency of people to vastly underestimate how long certain activities will take. Again, we expect success, we expect things to go well, and we expect things will come our way quickly and easily. But those around us are often better able to make judgments about how likely certain outcomes are, and how quickly/easily we can achieve them.
Bottom-line: For making better decisions, have a friend or family member review your assessment of how likely outcomes are, and how happy they would make you.
4. Beware “happily-ever-after” thinking
Strange-but-true: people aren’t always good at predicting what will make them happy. “Happily-ever-after” thinking is the belief that accomplishing goal X will lead to massive, lasting happiness. It’s common, and almost always an illusion.
Bottom-line: Learn to understand the true sources of your happiness. More often than not, happiness comes from making progress toward valued goals. It may seem odd, but actually accomplishing goals often leads to a psychological let-down and a feeling of “Is that all?”
Example: Virtually everyone. From time to time, virtually everyone falls into the trap of thinking “My life would be perfect if only I _____” (fill in the blank: meet my soulmate, get rich, get that promotion, etc.). Instead, remember the truth in the old saying: “It is good to have an end to journey toward, but it is the journey that matters in the end.” (Ursula LeGuin)
5. Get over the “fear of success”
I’ve always felt this notion was over-rated. People talk themselves into not taking action because “If I do, then one great thing after another will happen, and soon I’ll be a great success, and I just can’t handle that.” Uh, right. First, these folks are greatly over-estimating how likely success is (and how easily it will come), as well as underestimating how happy it will make them. Does this “fear” hold some people back? Yes. Should it? No. They should get over it, take action, and recognize that the much more likely “moderate” successes they will experience will make them happier than being paralyzed by fear.