A Framework for Making Better Decisions
The key idea: a good process is 6x more valuable that a good analysis.
The problem: too often we decide first and then use analysis to rationalize our decision. Professors Dan Lovallo and Olivier Sibony illustrate the problem of poor process with an analogy to our legal system:
Imagine walking into a courtroom where the trial consists of a prosecutor presenting PowerPoint slides. In 20 pretty compelling charts, he demonstrates why the defendant is guilty. The judge then challenges some of the facts of the presentation, but the prosecutor has a good answer to every objection. So the judge decides, and the accused man is sentenced. That wouldn’t be due process, right? So if you would find this process shocking in a courtroom, why is it acceptable when you make an investment decision?
The solution: adopt a good decision framework. In Decisive, Dan and Chip Heath recommend we WRAP our decisions by: