The most important decisions and leadership
Everyday we make important decisions. In hindsight, everyone knows the right choice, but how can we do that ahead of time? My intent is to explain priceless mistakes that destroy companies and people, and provide decisional guidance from my experience. False confidence is worse than ignorance.
To make the best of this article, please recall your life episodes and draw your own insights.
A vs 0
The simplest decision is doing nothing. We’ll call that 0 (zero).
The next simplest decision is a single small change to a small thing, like the color of a button on a website, or to a big thing like marketing strategy, or entering a personal relationship.
When you make a simple change, indicators can confirm it was a good idea. Like sales have increased. But this increment may be unrelated: sales would have increased even more without this change.
Accepting the indicators without contestation is called confirmation bias. Are you courageous enough to challenge everything you have done, crash your own party, and accept the idea to change again? We need to be completely honest to do that. And this feels uncomfortable for most people. There’s the false consensus effect that leads us to underestimate the number of people who’ll disagree with us and call them irrational. Jakob Nielsen had T-shirts for all his employees with the motto “You != User” and is a constant reminder we should investigate to invalidate all ideas that seemed good… to us.
To defeat confirmation bias, a common technique is A/B testing. That’s releasing the new button only for a segment of the customers. So you see if both 0 and A have improved or worsened sales, and their difference. But doing a correct A/B test is hard and not always possible. There are many distortions like the novelty effect, seasonality, the law of small numbers, cultural biases, etc. Most companies think they are doing it right, when, in fact, the test is invalid. And every A/B test has an irreversible cost.
I prefer to call testing a single change “A” against doing nothing “0” as A/0 testing. Let’s call A/B testing when we test two distinct changes.
A vs B
Maybe you nailed it. With A/0, you discovered a great change that improves over the baseline 0, no discussion about it. It works. So you use it. But that could be a huge mistake.
Out there, there certainly exists another change orders of magnitude better, that in comparison makes A look like a terrible idea. For example you can help a sick person with a glass of water (unless she had kidney failure or low electrolytes!), but a proper medicine does so much more. Now, for centuries 90% of medicine consisted of 2 things: purges and bloodletting. Sometimes medics killed patients due to the lack of hygiene. There was no better knowledge. Our knowledge is always incomplete this only becomes evident after new discoveries. And all sciences keep surfacing new discoveries, so I advise to drop the conviction that because we studied something, then we know it. Knowledge evolves and discoveries often deprecate previous knowledge. Keep that in mind.
Our attempts to “do the right thing” mean we are selecting the best available decision in our mental model. If everyone in the world were aware of the limits of this heuristic, we’d have speedier progress in every area, because we would more flexibly explore different options and avoid hard criticism or resistance against innovation under the false conviction that current sciences have it right.
Also, there is the placebo effect. It’s a big deal. Some people are sick for years and placebo heals them. That’s where confirmation bias comes in. Sometimes things work, but not for the reasons we think.
So one distractor is false causality, another is confusion, that is, two or more influences factoring-in, as with the chemical effect of the medicine and the psychosomatic placebo effect. That’s why standardized double blind tests exist.
How do I accept a decision?
There are infinite steps to perfection. If you seek it, you will not make any choice. We need to accept what we have, though aware of its limits. Whatever your decision, there are always better options, but you don’t know them or they are non viable due to disorder. Fix disorder to the best of your ability, keep open minded, and question and push your limits. And then be courageous with your choice. Indecision is even worse.
With enough time, most people learn to despise the sychophant or political liar because results scream aloud. What these people do is stalemate with rhetorics and claim expertise, but bring little value. People love and support a standout honest person who tried with good intentions and courage. Employees may be scared to talk freely for fear they may get fired. But we can always find a professionally appropriate way to say everything, in a way everyone can relate to it and that doesn’t fight anyone. I always do that.
Don’t hate what you have due to the fact better possibilities always exist. The “best business” doesn’t exist, so the “best hire”, “best friend”, “soulmate”, etc. Don’t form a prejudice or idealize and reject good people and ideas: your standard may be an actual limit. But don’t forget to push this standard even when you think you are already good. A mediocre deal could turn out to be excellent, and a deal you deem excellent could improve even more. Even better, share these ideas with everyone so that everyone can improve and foster improvement.
Please understand no matter what you do, there’s always someone who had it easier and someone who had it much harder and it doesn’t depend on effort or merit, there’s “luck”. Be careful. Because both statements are always true, if you are inexpert — most people in my experience need this reminder — you can be manipulated using this disparity. I will explain why.
0 vs infinity
Pick an aspect of your life, like your job, your partner, etc. I could persuade you of two things:
- It’s terrible. There are people who, with less effort and skill, got better deals, partners, life. We have many examples. You got a very bad deal. If your worth is N, then N compared to infinity is zero.
- It’s awesome. There are many people who got far far less and had to make sacrifices and terrible life situations. Again, we can list examples. You are very lucky and should be grateful for what you have. Again, if your worth is N, then N compared to zero is an infinity!
So the manipulator will make examples of people doing better, trigger inadequacy or push you to want more, or alternatively make examples of people with less to make you happy with what you have, or make the deal sound better.
I could provide incendiary examples, but what’s the point? Think and gain your own insights.
What I can do, instead, is tell you a little about myself.
- When 2 years old, I was a nomad as my father travelled because of his job. I will never forget the day when our fifth wheel caught on fire and I lost my home, that was my life. We had to sleep on the floor for weeks.
- I had an incredible offer I and my family were not prepared to accept. Talent scouts offered me a scholarship for an accelerated program at MIT. Since I was 3 years old, my mother thought I wouldn’t fit in the world and rejected it. That’s one way to see it… but how many people struggle to pay college for their children? If it’s true I was intelligent as they say, with an accelerated program I could have figured how to fill the gap and integrate in the world during my free decade, maybe start more projects…
There is a Chinese saying that the best day to plant a tree was 10 years ago, and the second best day is today. It’s useless to cry over spilt milk. I had other privileges and streaks of luck, but they don’t cloud my judgement either. Let’s work with what we have, here and now.
A vs B vs 0
No decision is ever A/0 or A/B. All decisions are A/B/0. We can almost always opt to do nothing and have an infinity of choices, just not available or not yet thought. Thinking you have only A and B is called the “trap of duality”. But let’s consider A and B for simplicity.
The problem is, we can only accurately estimate 2 points, A/0 or A/B. A/B/0 testing is impossible. Usually, the third would require a parallel universe or a crystal ball. I call this “indeterminism”. There is a difference between a lab testing with repeatable static conditions and the dynamic everyday world, where people act and evolve and you only have one chance to get it right. Every experiment has a cost, even with a huge audience to test.
False confidence about what we know can result in decisions that transform one life.
Suspend judgement. Some religions speak about suspending judgement, but we can reach a similar conclusion with the rationale behind this article. Be aware of the limits, you can take a partial result well aware it is partial, and be ready to amend it when you obtain new info. Suspending judgement is hard to do. I know very few people that can do it. The mind wanders and seizes the opportunity to reach a conclusion and rest. Don’t yield to that. Learn to accept the universal uncertainty, be like the seawreck who stops swimming and floats on his back.
Insights and examples of mistakes
I knew one “Sales Executive” whose ideas were taken as gold, over good technical decisions. Nobody ever found out, but then again, because of indeterminism, I couldn’t help in a way it would be useful or usable for everyone. My advice to be careful was dispelled by the false aura of confidence that well resonated with everyone.
In UX and Design, confirmation bias results in giving a pat on the designer’s back. But Utility and Usability are kings. We should investigate, not validate.
Single episodes can destroy lifetime friendships, or relationships. Warren Buffet said if you tail a man driving for 500 miles, he will probably take a speed ticket. The police should consider that if a man keeps talking, he will contradict himself. This is natural. If we overthink, there is an interpretation of all “bad details” that suddenly seem to form a common thread, and will frame him as guilty. Or as a false friend, or a spy, etc. One day I ousted a great person from my life. It took a great deal of humility for me to realize this principle and apologize. I wouldn’t have blamed her if she rejected my apologies. She accepted them. I recommend always reaching out to people, clarify, and be on good terms, with all direct confrontation as needed. Just put extra caution not to be passive aggressive, even by mistake: when people believe they are hurt or believe they were treated unfairly, it’s a good time to get irrational and make things worse.
Always listen. Intelligence is the ability to obtain and use information. This applies to a person or to an entire nation (e.g. military intelligence). When one manager or Chief of Staff listens, he or she understands and can act. When he cuts people off and talks 90% of the time, how can he obtain information?
The Nobel laureate Daniel Kahneman calls managers who check metrics too often as incompetent, and backs this up with data. In my early career, I joined a Company that instructed newcomers to completely ignore a product for its first 3 months and only then check usage metrics. However, everyone forgot their own advice and checked everyday. At least, they knew. Or I bought $100k of stocks that went +10%, then -34%, and they are still floating. I don’t care. I will check every quarter and the only thing that matters is the price I bought them, and the price I will sell them, NOT what happened inbetween. If it was a wrong buy, there is a lesson to learn. If there is none, I realize and stop gambling. Everyone will agree, but when you are skin in the game, you will tend to forget all your rationale and critical thinking. You can agree with this, but this article, believe me, is not enough. You should deliberately train yourself. Buy some stocks, learn to live with the losses and discipline yourself not to care about daily or tiny variations.
Low numbers are prone to statistical outliers. Daniel Kahneman also explained how Bill and Melinda Gates lost $1.5 billion in an experiment to fund small schools because of this principle. If a school is small, sheer luck could bring its metrics very high, or very low. Big numbers regress to average.
If a transition is going on, wait for people and processes to realign, before making evaluations and decisions. Don’t fire or promote people during transitions, we don’t really understand what’s going on and why. As Brian Kilinc said, we shouldn’t take any decision in any emergency situation. That’s when bad decisions are usually made. If this is truly an emergency, go with the most conservative option. Yes, so when people sneak something on a deal at the last minute and force you to take it or leave it, then you should leave it. If marketing people push you to take action because the discount is valid only for a time, reject it. Paying a higher price later is perfectly fine if you can make a true decision. Unless, of course, you can make a full decision completely regardless of the emergency and still take the discount.
I will write another article on how to deal with emergency situations.
On gossip: Generally, people don’t trust one another. So if you hear something that you were not supposed to hear, then you may think it must be truer than direct communication. For example someone speaks badly about you when you are absent. Are you sure what you learn by hearsay, eavesdropping or spying is better intel than direct dialog? You may be surprised. Maybe it was all a mistake, even though it appears not. People may have reasons for talking differently when you are not present, or then again, maybe it’s just immaturity. But direct and open speech is truer.
My advice is to mind the limits in decisional confidence. Don’t to jump to conclusions and ascertain any cause-effect repeatable relation. Always confront people directly, when you hear bad things, and seek a clarification. The only exception is danger (you hear someone is going to hurt you), and even then, you should do the right thing.
The notion you need to be a shark to succeed in business is false. If you are intelligent, you will obtain information, triangulate it in A/B/0 fashion, and look for options. There certainly is a better one without any violence, dominance, or abuse. People are resources and the root cause for competition is scarcity. With more resources, scarcity decreases and then people become invaluable allies. Intelligence facilitates progress, that increases the resources available. Ultimately, mankind will realize the Sun is a near infinite source of energy and matter, and we can learn to exploit more of its gifts. This will remove all scarcity and fulfil all our dreams.
Cultivate your A/B/0 thinking, suspend judgement and find more options that get out of fake battles nobody ever forced you to fight. If you feel forced to decide among A and B, tomorrow you can find a way to achieve both, and even more. I am not saying finding these possibilities and making them viable is easy… that’s the challenge of life! Getting people to brainstorm and implement these possibilities in all life contexts is the skill of a leader.