Joe: I guess the first thing I was just hoping you could set the table with is why do decisions matter? Why focus on decisions of all things that we could focus on?
Annie: That's actually a really great question. I think it's a much deeper and better question than many people would realize. The way I think about it is that when we think about the outcomes of our lives, there's two influences. We can divide it broadly into two influences. One is the quality of our decisions and the other is luck.
So, when you think about the influence of luck, you can think about things like I don't have any control over when I was born and it makes a really big difference to the outcome of my life that I happened to be born when I was in the 20th century, as opposed to say in the 16th century. You can think about for me, as a woman, that's a really big difference.
Right? So for one thing, I’m not property. So things like the circumstances of where you were born, who you were born to, how tall you are. Right? You just don't have control over those things. You also don't have control in the luck category of generally things happening in the world that you've just generally don't have control over.
So the decisions of others who you don't have any influence over. And you could think about that foundationally, at the foundation of every life, but also then there's just things like if I go through an intersection and I'm following all the rules, my car is in good, working order and I go through a green light, I just don't have control over the other drivers on the road. So a driver could come through the opposite way of the intersection and hit me with their car. So there's all sorts of influences of luck. But the issue with the luck portion of things is that you actually don't have any control over that piece.
It’s definitionally part of it. I can't control when I was born. I don't control who my parents are. I can't control the other drivers on the road. I can't control what the leader of Sweden does. Right. So we can think about that generally as something that we don't have control over. Now, there's an aphorism which is you make your own luck. I have big disagreements with that. What I say is you can make decisions that change the distribution of outcomes, right? I can make decisions that increase the probability that I'll get hit by another car or decrease it. If I make a decision to go through a red light, I really increase the probability that another car is going to hit me.
“There's an aphorism which is you make your own luck. I have big disagreements with that.
What I say is you can make decisions that change the distribution of outcomes.”
If I go through a green light, I decrease it. But in both cases, there's some chance that a car will hit me and whether they hit me on that particular trip through the intersection, I actually don't have any control over, which then brings us to why decisions are so important. Because when we think about the two influences, luck and the quality of our decisions, we don't have control over luck, but we do have control over the quality of our decisions.
“When we think about the two influences, luck and the quality of our decisions,
we don't have control over luck, but we do have control over the quality of our decisions.”
So it's the one thing that we can improve and change that actually does basically determine the way that your life turns out. The other thing that determines how your life turns out, we can't do anything about, so we should be focusing on the thing that you can do something about.
Joe: Okay. Thank you, that's really helpful. So then my follow-up to that is: what makes you think that we can get better at that? That it's not just something that some people are good at? We all know how to make decisions, like we all know how to walk. Why is this a thing that you imagine has skill to it that can be improved?
Annie: There's a lot of evidence that that's true. First of all, just on the face of it, it's like anybody who's a parent teaches their children how to think about decisions. They're coaching them on how would you deal with a bully at school? We can think about decision-making with driving a car, we're teaching people how to make good decisions around that. Right. Just when we say to somebody, oh, it's a good decision to go through green lights. People generally will follow those. So we know that we can educate people just in simple ways about that. But obviously, the question is when we start to get into things that we know that humans have trouble with, for example, there's a lot of talk about cognitive bias, right? Particularly since Thinking, Fast and Slow came out by Daniel Kahneman, people are really talking about this idea of system one and system two; these more automatic decisions. The fact that we really veer from rationality in a lot of different ways. And I think that that's the more interesting piece. What would make me think that we can take that and actually improve upon that? Outside of the simple things, like you should go through green lights, which people are pretty good at, how do we actually get people to get better at thinking about what are the options that I have available to me? What are the resources that I have? How am I thinking very critically about my own knowledge? How do I think about what the outcomes are that could come, that could result from any option I make? And then compare those options. How do I think about my own values and preferences, because people actually don't always know what it is they want? And I think that we've all experienced thinking that we want one thing and then after we actually experienced it, realizing that we didn't, that that wasn't the thing that we actually wanted. I think we've all had those experiences like, oh, I'm really surprised. I thought I wanted that, but it turned out I didn't.
So why do I think that we can improve that? Well, there's a lot of science that shows that we can. So whether it comes to thinking about: how do we think about the possible futures that could result from any decision that I make? How could we think about how probable those futures are? Right. So for any decision that I make, there's lots of different ways that the future could turn out and you can think about it as: the better I am at figuring that stuff out - what are the possibilities? - the better I'm going to be at making decisions, particularly if I can start to think probabilistically about that stuff. Well, the work of Phil Tetlock, for example, Phil Tetlock and Barabra Mellers and Superforecasting, which is a book that people should really read. Shows that you can actually improve that stuff. That there are ways to train people to become better in that type of decision-making. When we think about - can we improve habit? - there's evidence to show that we can do that. Can we get people to recognize their own emotional state when it comes to decision-making? The answer is yes, we can absolutely do that.
The work of the Alliance for Decision Education has actually shown that in very interesting ways where we've been able to show that when you address broadly someone's ability to think about - am I in a good state to make decisions which really matters? - that it actually ends up affecting a whole bunch of other stuff like math and english scores.
Because really, when we think about anything that has to do with that, again at the base of that is decision-making. So the idea is that there's all sorts of science at the adult level that shows that there are interventions that you can make that will improve decision-making. And the idea behind what we're doing is: let's take that and bring that down and to see if we can start to apply that to kids and start teaching them to be better decision-makers earlier.
Joe: I was going to point out that you've been studying this academically, practically, professionally for a long time and with a lot of success. But if you could think back to, what do you wish you had learned earlier, like back in high school or middle school, what do you think would have been possible and important for you to have learned then about decision-making that you'd love to see the next generation of students be given an opportunity with?
Annie: The main thing that I wish that had really been taught to me is a much greater emphasis on intellectual humility. I think it would have been incredibly valuable to me if it had really been instilled in me.
Two things. One is that you should realize that the things you believe are generally neither a hundred percent true, nor a hundred percent false that they lie somewhere in the middle. And that that's really important to know. In other words, that you need to view your own beliefs with some skepticism, recognizing that they were all formed with very little information. Just because when you compare what you know to what you don't know, what you don't know is the vast universe and what you do know is like a speck of dust. This idea that your beliefs are a work in progress. That they are neither true, nor false, but that they're evolving hopefully as new information comes in and that they will change. And that that’s fine. Because as a good decision-maker, your beliefs should be growing and evolving because as you experience life and as humanity moves forward, and that there's progress that we learn new things. So I would have liked to have that view of my own beliefs instilled in me more strongly, that kind of humility toward my own beliefs.
“You need to view your own beliefs with some skepticism, recognizing that they were all formed with very little information. Just because when you compare what you know to what you don't know,
what you don't know is the vast universe and what you do know is like a speck of dust.”
But then what kind of goes along with that is that what you realize is in order to make your beliefs more accurate, in order to create fluidity to your beliefs that moves in the right direction, you have to start to really be eager to explore the universe of stuff you don't know. And in particular, that means that you have to be open-minded to people who have different views.
I think that we think about this as a problem that younger people have, but it's actually a problem that we all have, which is that when someone disagrees with us, we're very likely to dismiss them. We're very likely to think they're bad people. That they have bad intentions. All this stuff that sort of divides us into this us versus them. That allows us when we come up against information that might correct a belief that we have that allows us to swat it away and dismiss it as opposed to really, genuinely incorporating into the way that you think about the world that two people could look at the exact same information and come to different conclusions and both people could be perfectly well-intended. That the world would be a lot better off if we allow those perfectly well-intended people who happen to disagree to be able to have a conversation in an open-minded way.
So I wish that I had been really taught a lot more humility and open-mindedness, and particularly as I think about my poker career and I, you know, I did well. I think about how much better I would have been if I could have done more of that.
“The world would be a lot better off if we allow those perfectly well-intended people,
who happen to disagree, to be able to have a conversation in an open-minded way.”
Joe: Yeah, thanks. So all of this is personal because it's all about what you care about and what you've done and how you're trying to help the next generation. But even more personally, as a parent, we're all home now, I'm home with my girls, you're home with your children. How are you talking with them about both the uncertainty of all of this, the changes to decisions that they thought were coming or paths they thought they were walking down? How's this showing up in Duke world that other parents like myself who are interested in Decision Education and know it's not in schools yet that we could be thinking about maybe using in our own lives with our own children?
Annie: So the first thing that I've done with my kids that I think has actually had good results has been that I'm very, very clear about the uncertainty and I have been very clear with them that we don't know what the course of the disease is, that we have to really be looking for information and try to really vet the information that we're getting as we ourselves are trying to build better models for ourselves of kind of how the virus is going to go.
But then also to understand when experts are talking to us, how are they modeling the data, where is it coming from and that kind of thing, so that we could be making better decisions around our own behavior as it comes to the virus and within that. So I think that our urge in these kinds of situations can very often particularly with kids be to tell them that we know what's going to happen.
But I think it's really obvious that people don't know what's going to happen. And I think this is a really good opportunity to really give some lessons in scenario planning and forecasting to your children and be completely honest, assuming they're not six, by the way, just to be clear. But assuming they're of an age where this is a conversation that you can be having, to say, there's different ways that this could turn out and we need to think about those different ways. And then we need to think about if we make certain decisions, how likely is it that things for us turn out one way versus the other way, and can we tolerate those things happening?
Annie: So, for a six-year-old this would be communicated more as the reason why we're staying inside is because we don't want to get all the grandmas and grandpas sick. Okay. So that's obviously a simple way to kind of talk to them about what the consequences of your actions are in terms of the different scenarios. And to say, if we go out and we don't wear a mask and we don't do this, that's more likely to happen. But with the older kids, where some of that is that they're having to make some of their own decisions about what they want to be doing, I think it is really important to understand, what's your tolerance for risk? How are you balancing that out against other things? Here's an example. Like if you go out without a mask, it's not guaranteed that you're going to get COVID, it just increases the likelihood that you'll get COVID and then let's think about if you get COVID, what are the consequences of that? Are you willing to bear those?
So I always think honesty is really important. And part of being honest is actually teaching them to be really good decision makers, because the way that you're thinking about COVID is the way that you should really be thinking about all your decisions. It's just more obvious right now that you would want to think about them that way, because the uncertainty is more obvious. That the future could take a lot of different paths just feels more obvious right now. So I'm taking it as an opportunity to really give them a framework for thinking about scenario planning and thinking about if I choose an option, how does that change what the outcomes might look like? How do you get comfortable when you have so little information with making really good, educated guesses about what the scenarios might be, how do you keep that fluid so that you can change that? So an example would be you might have certain projections about what the course of the disease will look like when we don't know that there's asymptomatic transmission, but then when we do, now all of a sudden that changes things. And that's a conversation that I had with my kids, but my kids are older teenagers and young twenties where I could show them like that little change in information, how much did that change what your sort of model of the world is? So I think honesty in this case, and really using it as an opportunity to teach your kids how you make decisions under uncertainty. It's a great opportunity.
“That the future could take a lot of different paths just feels more obvious right now.”
I think that a lot of us as parents are having our children experience some sadness about what's going on. So I'll give you an example from my own life. I have two children and one stepchild, all three of whom are missing graduations, a senior in high school, senior in college, and graduating from law school. So those are the three all missing graduation. So So for example, if I take my senior in high school, she's missing her senior spring, which we all know is a really big deal in high school in particular and all the kind of fun and the senioritis and all that stuff. She's missing all of her relatives coming and she's not going to walk in a ceremony, so that's very hard.
But this actually brings up a really good opportunity for giving kids a tool that they can use for the rest of their lives to actually really help their decision-making, which is just mental time travel. So what I've been doing with them, and I did it very early, and this brings together the two bits.
So the first thing is be honest with them. So way back in March, I was already talking to my daughter that there was a very strong possibility she wasn't going to be walking in a ceremony. And I said, it's not sure, but let's play it out and let's look at what it looks like. And I just want you to start thinking right now so that you can start to metabolize it, that a very probable scenario is that this graduation will not happen.
This was way back at the beginning of March and that just had to do with teaching her scenario planning and what are the different ways that the pandemic could go. And I showed her that there were, there were a bunch of worlds, a bunch of scenarios where this graduation wasn't going to occur. So by the time the school actually announced it in mid-April, she was not as surprised by the world.
Annie: I think as other kids might've been, so that's the value of the scenario planning and just being really honest and talking about it with your kid.
The time-traveling piece was to help to get over the sadness of it. So, what I've tried to do is instead of having them live in this moment right now is to say, let's look at how this looks for the rest of your life. I know it's really awful right now, but for the rest of your life, you're going to get to tell people you were the Class of 2020, and everybody's going to know what that means. And first of all, it's going to be a big bonding thing for everybody who's of your age that they're going to be able to say that. It's going to be one of those things. That's like that the things that bind humanity together, like I know where I was when 9/11 happened, or I know where I was when everybody watched the moon landing together. There are these things that bind us together where, while there's a lot of sadness that comes from it, now that as you look over the course of your life and that you're going to be able to say to people, I was the class of 2020 and that's going to create this bond with humanity that let's think about that more. And let's think about what it looks like in the future. and I think that that's really helped her and my son as well. And so and I think that that particular tool as a decision- making tool, it is such a good one because we get really, really sad about things a lot, like in the moment. It seems like the worst thing that's ever happened. And we all know this from like the first breakup where it feels like you're never, ever, ever going to recover from it. Or anything that's in that category or even frankly, you go to a restaurant and you just get a really bad meal and you're just so sad and you think it's just going to ruin your day, right? But the thing is that if we can get ahead of that and sort of say, well, what does this look like in the future to me? Then it can really help us because when you say to someone, I know this breakup feels so horrible. Right. But when you're 30, do you think it will matter?
Annie: Right. Sometimes in a very positive way, right? Yes, I think it will matter, but in the reverse of the way it feels now. Sometimes the answer is no, not at all. But I think it's a way to sort of separate ourselves because one of the things I think that makes decision-making really hard, particularly in the environment that we're in now, is that we get pulled down into these emotional holes that that really kind of don't allow us to see how it fits into the broad scope. And in order to make great decisions, you have to see how things fit into the broad scope. And so this is something that I've been doing with my kids is to try to get them well into the future, which is what I was doing in early March, right, in terms of the graduations, so that they could see things a little bit more in the scope so the future was less surprising to them. And then also as that news came in, to start to get them to deal with it by doing this real mental time travel to start thinking about what does this look like when my kid is complaining about when I'm a mom and my child is complaining about something and I get to say, oh yeah, I was the class of 2020.
“In order to make great decisions, you have to see how things fit into the broad scope.”
Joe: It reminds me a lot of the time travel exercise. I've heard you described before where you ask people think about it in different time horizons too. What's it look like in a couple of days, a couple of weeks, a couple of years, and in those cases doesn't really matter that much?
Joe: That's a really helpful one, thanks. Now we've been talking a lot at work about the two questions that Decision Education addresses: “what is true?” and “what to do?”
Annie: That's so good!
Joe: Oh thanks! And so we actually are thinking about it as two loops. There's the Critical Thinking loop that schools already are trying to engage on, which is all about the, “what is true?” or the intellectual humility and that updating your beliefs is important.
And then the “what to do” one, which is a lot about scenario planning, thinking about alternatives, trying to get a handle on what's skill versus luck, and even just creating opportunities for decisions like you can just be moving down a path in life, waiting until something happens where you have a fork in the road and you've got to make a decision.
Joe: Or you can be looking at your life and thinking, okay, how do I generate a decision opportunity that gives me new paths that I could walk down? And none of that really was ever part of my formal education. And I'm assuming it wasn't really ever part of your K-12 I'm talking about,obviously when you got studying this stuff.
Annie: So I think we were taught it in a vertical way, as opposed to a horizontal way. Not that these decision principles undergird any decision that you would want to make, but in a vertical way. Let's think about “what to do?” So you're thinking about college, like you're in 10th grade. What are the decisions you might want to make now that are gonna affect that decision later?
I think my school was okay on that. I wish they had been better, you know, in terms of teaching it in a more horizontal fashion; this is going to cut across all of your decisions. I know that one of the things I was really lacking was “what is true?” I think that one of the things that we want to sort of separate out is I think that we think about “what is true” as I'm going to teach you that a frog is an amphibian.
Joe: Yeah. Right.
Annie: Right. So those are just facts, right?
Joe: Semantics declared. Yeah.
Annie: Exactly. But first of all, facts change, right. Pluto was a planet, then it wasn't then I don't know, is it back to being a planet? I don't know. But first, a) facts change, but secondly, most of the things that we believe, most of the knowledge that we have, that informs our decisions aren't specific facts. They're the ways that we have taken those facts and created a model of the world. So the facts are like inputs more into our beliefs. And so in terms of the “what is true?” piece, I wish that's the thing that I had been told. First of all, a lot of the facts you think are probably not exactly a hundred percent correct, but even so, that doesn't mean that the way that you've modeled your facts, the way that you've taken those facts and created different models of the world that tell you kind of what you think is true of the world in general, how you think the world is operating, how it might be predictive of what will happen in the future, that that is not truth. That that is the way that you're thinking about the world and you need to have a lot of humility around those models. And that's the thing, that's the piece of the truth, the truth part of “what's true” and “what to do” that I feel like was super-duper missing for me. And I think that until you understand that, you need that in order to do the “what to do” part really well.
Joe: I would agree. I also think that trying to separate them out that way helps to remind us not to confuse ourselves by putting the whole, what are my values over in the “what is true” side.
Joe: Get them over in the “what to do” side. I'm trying to pick which possible future to pursue, or how much weight to give different criteria, that's where your value should really be showing up, but you shouldn't be using them as a filter to decide how you think the world really is or works.
Annie: Right. And I think that one of the problems that we have when we think about the “what is true” side is that that is actually the thing that becomes our identity.
So, I mean really, who are you, but what you believe? And when we start to confuse facts with beliefs, then the belief systems that we have and the models that we have of the world start to become part of that truth. And that's then part of our identity, because that's who we are. And once it's woven into our identity, then that's what can cause us to be very defensive of that fabric, right? Like you can think about like all the things you believe and all the models you have of the world and the facts that you believe to be true as well, which which then inform the models that you have of the world and inform your beliefs, those all create the fabric of your identity and nobody wants their identity torn asunder and then that now automatically changes our stance toward information as either identity-protective or as identity-threatening. And now all of a sudden, when people talk about echo chambers and people's inability to update their beliefs and all of this stuff, you can see where that's coming from. And I think it's partly from this - we're not really talking to people enough about their beliefs and what it means to have a belief and what's the difference between a fact and a model.
What's interesting about decisions is that people think, oh, if I learn this big decision processing and I learn this whole thing about forecasting and scenario planning and trying to think about all the things that the future might hold and what's the upside potential and what's the downside potential. That somehow that's going to slow your decision-making down. And I understand why you would think that it sounds like a lot, but the reality is that when you learn this way of thinking and the tools that you would apply in order to implement this kind of thinking, that the majority of the decisions that you make actually get faster. So it allows you to sort of release yourself from analysis paralysis because you actually understand when is the time for analysis valuable? When is it actually doing something for you and when it is and when is it not? As opposed to just thinking, well, I have to analyze, analyze, analyze so I can get the certainty.
Because the one thing that this way of thinking about the world does for you is it lets you realize that certainty is just an unattainable goal. So sometimes, time is more important than certainty. Actually, most times, time is more important than certainty. And so just get comfortable with, you know, this is good enough. I'm at 60%. I'm good to go. I don't need that extra bit.
“Certainty is just an unattainable goal. So sometimes, time is more important than certainty.
Actually, most times, time is more important than certainty.”
The one thing that I will leave people with is that people are really seeing the uncertainty in the decision-making right now with Coronavirus. They're seeing that information is changing on a daily basis and maybe understanding a little bit that you have to hold your beliefs a little bit more loosely than normal, because there may be data that comes in tomorrow that’s completely different.
You're seeing that the projections and forecasts about infections and fatalities are changing, as new information comes in, you're definitely seeing, in a really in your face way, the way that those models are driving decision-making. Sometimes for the best, sometimes for the worst, and sometimes for the in-between.
And so I think that this environment that like there's a lot of luck and that knowledge is imperfect which means that we're making decisions under uncertainty is really, really obvious right now. And the one thing that I'd really like to communicate to people is it's really not that different. It's more amplified right now. Certainly, our ability to get the feedback about the sort of imperfection of our knowledge today, as new stuff comes in tomorrow, that that loop is faster. But, one of the biggest problems that we have as decision-makers is that we underplay the uncertainty, generally. In general, we think we have much more control over the way that the future is going to turn out. I think in general, we believe that the facts that we think we know, the things that we believe that our models of the world are truer than they actually are and are much more certain than they actually are. In other words, we just think that our knowledge is in a much healthier state than it normally is.
And I think that we think that the chances of things happening, when we think about a decision, we tend to think about, I think this thing will occur from it. When you hear pundits on TV, they'll declare, you know, this is what will happen if someone makes this decision. Even a lot of leaders are encouraged to say with certainty that this option is going to be the best option and it's going to turn out the best way.
So when we're outside of this COVID environment, I think one of the big problems is we tend to overfit certainty as kind of a model of the world. Right? And that's kind of what's happening. So one of the things that I would love for people to take out of what's been happening with coronavirus is that the way that you're thinking about this, the uncertainty that you're feeling, bring that into your everyday decision-making because even for something as simple as, choosing a route to work, you're doing the same thing. You're trying to figure out which option is going to get me there faster. And then we all know sometimes you get on the road and there's an accident on that road that you couldn't control or there's new information that pops up or whatever. And so even something like that is very uncertain. If the route you're choosing to go to work on is filled with uncertainty, think about things like, what job should I choose or what employees should I hire or even which diet I'm looking at keto and South Beach and Atkins and vegan and whatever, like which one is going to get me the best results for my health. All of these kinds of decisions that we're making are fraught with uncertainty. And one of the ways to become a better decision maker is to accept that and to learn how to make good decisions. Not to sort of close our eyes and pretend it doesn't exist and say, oh no, but I can be sure if I just whatever, I can be sure, but to actually just embrace it and say, okay.
“All of these kinds of decisions that we're making are fraught with uncertainty. And one of the ways
to become a better decision maker is to accept that and to learn how to make good decisions.”
So then what I really need to do is think about my own beliefs with humility. Understand that the way that I'm thinking about the world is a model and that model can change depending on new information. That I need to be a really good scenario planner. I need to understand probability. I need to understand what my emotional state is and how that affects the way that I make decisions and so on and so forth so that you can get better sort of at that whole ecosystem, start to finish, of making a decision.
So I think that that is so obvious right now to people. But what I hear people saying is it is they're talking about it as if it is unusual. And it is true, a global pandemic itself is very unusual. That is true. How in your face it is that there's a lot of stuff we don't know. That is unusual. But the framework within which you would make decisions, the uncertainty. Everyday decisions are closer in the amount of uncertainty to COVID by a lot than we actually think that they are.
And the more you could nudge yourself closer to believing that the amount of uncertainty in your everyday decision looks a lot more like the decision-making environment that we're in right now, I think the better off people would be. I don't know if you agree or not.
Joe: I tend to agree. I also think if people hear that they have to think the way they're thinking about uncertainty now about most of their life, that's gonna seem exhausting.
Annie: Oh, that's such a good, that's such a good thing! Because here's the other thing: for most of your decisions, you don't have to think too hard about them.
Joe: Ok, tell us why.
Annie: Well, it goes back to what you said before about when I said like a week, a month, a year or whatever. So thing number one is a lot of the decisions that we take tons and tons of time on, we take lots of time on them because we're trying to get to certainty, which is an illusion. Because we think that we can come up with the right answer. And so we're spending all of this time when actually the decision doesn't matter very much. So there's a lot of things where we think like, let's say this goes well or poorly or whatever in a year, is it going to have affected my life? So a simple example of that would be spending 15 minutes trying to order something off of a menu. We all know people like that. It's like ugh, should I get the chicken or the fish? I don't know. And then you're like quizzing the wait person and everybody at the table and trying to come up with the right answer for whether you should choose the chicken or the fish. But if I ask you like in a week, did it affect your happiness at all?
Annie: No. So that's the kind of thing, just flip a coin. Like you have to understand, there's a whole category of decisions that we think have a huge amount of impact on our lives in the long run, but they actually don't. Like what am I going to watch on Netflix tonight? Or what am I going to order? Or which outfit do I want to wear or whatever. It's just like, it's probably not going to matter very much and so don't spend so much time on it. That's number one.
Number two is one of the things that COVID tells you is that there's always a balance between time and certainty that it. You have to burn time in order to get certainty.And so you should think about when is the value of my time, much more important than the certainty I would be getting. So that's a little bit what the question about the chicken or the fish gets you. In a year, is it going to have affected my happiness? Right. I call it the happiness test, but that's getting you that well, in this particular case, the certainty isn't very valuable because even if I get a bad outcome, the chicken's dry, it's not really going to have a big effect on my happiness, so I should value the time.
But sometimes it's that waiting, that the time that you would spend trying to get you certainty is way too valuable. And there's two reasons why that could be true. One is that as time passes the outcomes get worse. So that happened with coronavirus. If you lock down really early and just make that decision fast, you end up with almost no cases like in Greece. If you lock down when you have a lot of certainty, so you're spending your time trying to get very certain about whether you need to lock down, now, all of a sudden you end up with 1.2 million confirmed cases and 70,000 people have passed and it's awful. So you can think about that. There's simple ways like if you have an employee and you think that they might be not a good cultural fit or you think they might be causing friction the longer you wait to address it, probably the worst that's going to be by the time that you address it, but we tend to wait because it's going to be an uncomfortable conversation. And so we want to be really certain before we actually do that, but we're not understanding what the value of the time is there. And we're favoring certainty because it's something that we don't want to do. So that would be an example. Of where the time becomes really valuable.
The third way that you can think about this balance between time and certainty is to think about whether the time is actually going to get you what you think is going to. So a lot of times what we're trying to do is we'll have two options and they're very, very close. So you're trying to decide between hiring two people and they're really, really, really close. You'll spend a whole bunch of time trying to parse between those two candidates, when in reality, because of uncertainty, probably the only way you could find out which was better would be to hire them.
Annie: So it's an illusion, particularly in a data-driven world that you could collect the data and actually know what the difference between the two is. So you're actually in that sense, actually wasting your time. You're trying to get certainty that you're not gonna be able to get. And in the meantime, you're using up a lot of time that you could be using for other things. So when you get into those situations, you can actually flip a coin once you've sort of figured out that they're, they're pretty close to each other. So that's another way that you can think about it.
And the last way that you can, you can think about it is can I quit? That's actually a really nice way to think about decisions. So most of the things that we decide about, we can quit. And once you look at the world through the lens of quitting, then it kind of takes the pressure off of your decisions and you can be a lot faster.
Joe: Can you give me an example?
Annie: Sure. So I'm trying to decide whether I should take piano lessons or not. Okay, well, I can just take a piano lesson and then if I don't like it, I can quit. Right.
Joe: I see, unless I start to build up in my mind a belief that I'm a piano player, now it hurts my ego when I quit.
Annie: Right, which hopefully you don't do. So there's all sorts of little things that you can do that are just really quittable and this is particularly good in terms of establishing what your preferences and values are, which is actually a really big piece of decision-making. Do I like playing the piano? Do I like playing the guitar? Do I like playing basketball? But we actually spend a lot of time as if we have to get the right answer.
Annie: Right. Like, I don't know. Should I spend my money on a piano lesson? I have to now think about that forever. It's just like, just do it, let the world give you the answer. And that's actually going to help you build your knowledge base about the kinds of things that you like or don't like. So that that's kind of in small ways where then that improves later decision-making but here are bigger examples. Renting a house is more quittable than buying a house.
Annie: Right. There's different jobs where when you hire someone into it, it's easier to replace them than not. So you can think about how much time you should be spending, making sure that you have the ideal candidate will be different for different jobs.
The job might have a bigger impact on your bottom line and generally with a bigger impact on your bottom line is going to come more specialized skills, so it's going to be harder to replace, so that you can think about that. If you go to college, people think about that as a permanent decision, but you can transfer. It's actually more quittable than you think.
So once you kind of recognize that what you sort of realize is that a lot of times when we're trying to find the certainty, we're trying to figure out what the right answer is beforehand. But a lot of times, because we're making decisions under uncertainty, the only way we can really find out what the right answer is, is to try it. And to let the world tell us what the right answer is.
“A lot of times, because we're making decisions under uncertainty, the only way we can really find out what the right answer is, is to try it. And to let the world tell us what the right answer is.”
Joe: I sometimes find that really frustrating that my preferences and what I think of as my second order preferences don't match. Like I don't like playing piano, I've taken lessons and I don't like it, but I want to like playing piano. I remember a reframing you did about dessert one time, how you decided to shift what the pleasure was you got around that of abstaining from dessert as opposed to partaking.
I don't know if you want to talk about that or not, but the idea that our second preferences and our first, or maybe you have a better language for that than I do, but those don't match up all the time is a really weird thing about us. We're not like a computer where we can just change the code and say, okay, now you like playing piano, like insert instruction here.
Annie: Well, that's exactly the reason why it's important to do stuff, do quittable stuff, because the things. Our predictions about even ourselves are uncertain. Right? So you can think about predicting the future, but also predicting our own preferences and what are we going to like and what aren't we going to like? That is also uncertain. And very often we don't know until we try.
Annie: So, the idea is to get this frame of like, how quittable is it? Like, how easy is it for me [to quit] if the world gives me some signal back that turns out I don't actually like playing piano as much as I would like to. You know, I would like to think of myself as someone who loves really slow moving, boring, subtitled, Scandinavian film. But when I go to it, I don't like it. So there you go. So I stopped going. But in college I kept trying, I tried, but then I discovered it wasn't for me, I'd rather watch the Terminator. It's fine. But the interesting thing is that the time becomes very valuable for you because you're spending all this time under this illusion that you can reach certainty because you think the world is much less like the coronavirus environment than it actually is. And so you can think if I just ask one more waitperson, then I'll know what to order or I just whatever. And you know, if I ask a few more people about their experience with piano lessons, I'll know whether this is the right choice for me when you can't know until you try it.
And this is true even in the broader sense of like, we spend a lot of time trying to figure out what the best marketing campaign is when actually, usually what's best is deploy it, one in Market A and one in Market B and do a classic AB test and let the market tell you the answer. This is particularly problematic in a world with so much data, because the data gives us the illusion that we're going to be able to get to certainty.
Annie: When actually a lot of times the certainty that we need is to have the world tell us back. So, for me, I make a lot of decisions really quickly, but then I think ahead and I say, okay, let me make sure that I'm making all these decisions to start to gather information and find out things about my preferences, what works and what doesn't work, so that when I do have to make a really critical decision, I have stronger beliefs, meaning stronger in terms of more accurate. Right. Beliefs that are informing those decisions. So you could think about that. If your goal is to buy a house and you're trying to decide what kind of house you want and what neighborhood you want to live in, whatnot, go rent for a year. See if you like the neighborhood. It's a lot easier to get out of a lease than it is to try to sell a house.
And we know that piece because the market changes, right. It doesn't matter what's going on, you can get out of a lease. But sometimes like the market tanks and it's very hard to sell your house. And now you're kind of stuck with that house. So you should know that you're going to like the neighborhood that you like, the two story versus a ranch that all of those things where you're not exactly sure what your preferences are, there are ways to go find those things out beforehand before you make the really big decision. The classic example is date before you marry.
Published April 21, 2021